Let's make a deal

Corporate media set sights on African-American market

It's slowly sinking in, both inside and outside cable channel Black Entertainment Television, that something has changed.

On BET talk shows, hosts are making quips about having deeper pockets thanks to new owner Viacom, whose other properties include CBS, UPN, MTV, Country Music Television, and since three weeks ago, the all-black network.

Though country singer Faith Hill hasn't shown up among BET's music videos yet, the transfer of power concerns some in the African-American community, who wonder if it will become "Beige Entertainment Television." But for others, the $3 billion deal for 20-year-old BET represents a significant step forward.

"The day a lot of us knew was coming is here: We knew there would be a time when corporate America could not ignore African-Americans anymore," says Ken Smikle, who tracks black media and marketing. "We're the last piece of [corporate] earth that any of them can hope to yield any crops from."

At a time when the amount of media aimed at African-American and urban markets is growing, so are deals between black and mainstream media outlets.

In the past five years, these alliances have increased - offering black media access to resources and US and global distribution. In return, mainstream companies gain access to a growing population - with $490 billion worth of buying power - that consumes more media than the population as a whole.

"We think the African-American market is a very important one and a key one," says Peter Costiglio, spokesman for Time Inc., which formed a 49 percent partnership this summer with Essence Communications, publisher of Essence magazine. In recent months, Time Warner, Time Inc.'s parent company, grabbed, one of the projects of Harvard professor Henry Louis Gates Jr.

Though it remains to be seen what effect such deals will have on content and future ownership of black media, observers say marriages are often necessary in today's competitive market.

"If you're starting out new in this environment, it's almost impossible to do without some type of major media partner who can really finance [you] ... until you get to the point where you build some credibility," says Alfred Edmond, editor in chief of business magazine Black Enterprise.

Even for veterans, there are benefits. Once the BET deal - which includes other BET networks and its Web site - clears regulators, Viacom has said it will not dictate programming, but will offer resources to help with marketing, for example, and possibly increase the number of homes (currently about 62 million) that have access to BET.

BET founder Robert Johnson, who will remain in charge for the next five years, says that black-owned companies are now operating in a different climate - one where segregation no longer rules and the African-American market isn't automatically left to them.

"Because of this new economic paradigm ... the only way for black businesses to better serve their market is to align themselves with major white corporations that are going after that market with or without these black businesses," he says in an interview from BET headquarters in Washington. "You shouldn't think of yourself as a black owner so much as you are a black person who can create value. Oprah is a perfect example of that."

He and others point to the buying power of blacks, who make up slightly more than 12 percent of the US population. In 1999, black households brought in $490 billion in earnings, up from $441 billion in 1998, an 11 percent gain, according to Target Market News.

"The opportunity that African-American consumers represent is certainly as large or larger than most global or emerging markets," says Mr. Smikle, president of the Chicago marketing firm, adding that blacks are easier to target than Hispanics because there is no language barrier.

Media aimed at African-Americans, while still modest, has increased in the past decade. Magazine racks are crowded with publications that go beyond mainstays like Ebony and Jet, and more are on the way. On TV, while traditional networks are criticized for lack of diversity, at least three minority-owned groups are creating cable channels (see story, below).

Smikle says a key impact of recent deals may be to bring parity to ad rates in black media - the lowest in the business - as companies will likely insist advertisers pay the same across all their products. Viacom in particular has said it plans to put its weight behind this issue.

Elsewhere, some unions are already proving their value. Five years ago, Rodney Reynolds, head of RJR Communications, took his idea for a national magazine about African-American culture and history to Forbes Inc., after exhausting efforts to raise capital in Cleveland.

Today, American Legacy, a quarterly publication distributed largely through black churches, has a circulation of 506,000, including about 82,000 paid subscribers.

Mr. Reynolds calls the venture history-making because the two organizations are so culturally different. "It was very crucial at the time when Forbes got involved," he says. "They brought a lot of resources to the table, both human and financial. Combining our efforts, we were able to produce a ... vehicle that advertisers have come to support."

But in the case of BET, not everyone is sold yet. "We lost in that deal, simply because we no longer have final authority for what goes on BET," says George Curry, former editor of Emerge, the recently shuttered current-affairs magazine for blacks, and president of the American Society of Magazine Editors.

Even though the network has been criticized for its raw music videos and limited variety, Mr. Curry says, "When you get beyond all the rump-shaking, there are still more [black] public-affairs shows [on BET] than on all the other networks combined."

He adds that Johnson shut down BET's corporate offices the day of the Million Man March in 1995. "I'm not so sure the president of Viacom would close down any of its units for the Million Man March," he says.

Johnson says that his mission remains the same. "We're just as committed to covering the black community and serving the black community with entertainment information as we were when Viacom invested in it," he says.

Black Enterprise's Mr. Edmond asks: "Who could have competed - African-American - with Viacom to buy that business? The long-term solution is that we have to have more Bob Johnsons.... Now, Bob Johnson as a billionaire is in a position to acquire other businesses."

(c) Copyright 2000. The Christian Science Publishing Society

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