GustoTV

Bell enters the food TV space with Gusto

Media giant to debut food-centric specialty service this year

Gusto Worldwide Media president and CEO Chris Knight jokes that his business career to date has been characterized by five words: “How hard can it be?” It is a phrase that has led to some great decisions, and also “got me in some trouble” he admits.

Knight says his most recent business venture, the food TV channel Gusto, is solidly in the former, particularly after striking a deal with Bell Media that gives it Canadian rights to the nearly three-year-old venture.

“This agreement massively accelerates our plan,” says Knight, who launched Gusto in December of 2013. “I didn’t think I’d be having this conversation with anyone for another three, four or five years. It’s obviously in great hands with Bell, the biggest and the best at what they do.” Terms of the deal were not disclosed.

Bell plans to launch its first-ever food-centric TV channel later this year. It is one of the few major content verticals in which Bell – which operates a group of high-profile specialty TV services including TSN, Comedy and Discovery – does not currently have a property.

The move brings Bell into direct competition with the granddaddy of TV food programming, Food Network Canada, for viewers and advertisers. Corus Entertainment-owned Food Network had revenues of $69.1 million (including $52.7 million in national advertising revenue) in 2014, according to the most recent CRTC data, though its subscribers did slip to 6.2 million from a high of 7.5 million in 2013.

The deal began as a discussion about a possible content partnership, with Knight looking to create programming that would fulfill the growing content needs of broadcasters and over-the-top streaming services such as Netflix.

Bell has also entered into a multi-year production agreement with Ottawa-based Gusto Worldwide Media to produce exclusive 4K programming for the channel. Gusto will retain program rights in all markets outside of Canada.

Gusto sold programming in more than 20 countries around the world last year, with Knight saying the deal will “significantly” increase its inventory for global sales. Knight also plans to launch Gusto as an over-the-top service in markets outside of Canada by early 2017.

Knight says the plan is to create “hundreds of hours” of food and lifestyle-related programming in partnership with Bell. He did not disclose a programming investment for the partners, but called it a “significant and sizeable investment by any Canadian standards.”

Bell will eventually assume the day-to-day operations of Gusto, with Knight focusing on production and distribution.

“Content creation has always been my first love, and food is my personal passion, so I feel I’ve been given the keys to the kingdom,” says Knight, who has been nominated for several James Beard Awards for his shows Cook Like a Chef and The Great Canadian Food Show. “I get to make really great shows and launch Gusto as a channel into new markets all over the world.”

Gusto is one of the few remaining independent TV services in Canada’s highly consolidated media landscape.

Knight says the independent channel’s programming is more closely aligned with the early days of food programming, rather than contest shows like Top Chef and entertainment-focused shows featuring “guys with big hair eating hamburgers the size of their heads.”

He says Food Network, which pioneered the concept of a 24-hour food channel, has been operating “financially unmolested” for a long time, but has “abandoned” the type of programming (ie: food shows, cooking shows and travel shows) that defined the genre and made it popular.

“Our programming sensibility is more closely aligned with that sort of programming than it would be with the stuff you see on Food Network,” says Knight. “That was a conscious programming decision because they’re big and successful, and what’s the point of going to all the trouble of launching a channel just to do what those guys are already doing really well.”

Gusto is currently distributed in approximately 3.5 million Canadian homes through deals with BDUs including Bell, Telus, MTS and Eastlink. Knight says the company was in discussions with other BDUs prior to the Bell Media deal. “It’s been doing wonderfully well – better than anyone’s expectations – since we launched,” says Knight.

He dismisses suggestions that Gusto might have faced revenue challenges in the new pick-and-pay era stemming from the CRTC’s “Let’s Talk TV” hearings. “We feel very well-positioned in the new pick-and-pay world, and we think Gusto is going to thrive,” he said.

Gusto skews nearly 70% female, with nearly 38% of its audience under 40. “If anybody’s wondering what the millennials are watching, they’re watching Gusto,” he said.

The network’s top shows achieved 2+ average minute audiences in the 50,000 to 60,000 range, with Gusto reaching approximately 1 million viewers a month. It had an average primetime AMA of 10,000 in April.

My Kitchen Rules is consistently Gusto’s top-rated program while other popular series include Paul Hollywood’s Pies and Puds; My Fair Wedding with David Tutera; License to Grill; One World Kitchen; Real Girl’s Kitchen and The Mind of a Chef.

Knight says Gusto was on its way to his initial goal of achieving profitability in its third year when the deal was struck. Gusto’s revenues were $1.1 million in 2014, according to the most recent CRTC financial data (it did not disclose advertising or subscription revenue).

He says while the traditional “dots and spots” approach is still the basis of its advertising business, Gusto has also done product integration deals and “stunts and gags.” Adding Bell’s sales and marketing acumen, he says, is sure to produce a “massive upside” for advertisers and agencies.

 

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