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OBN Holdings, Inc. (OBNH.OB) |
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CEOCFO
Interview Index |
This is a printer friendly page! OBN
Holdings, through its subsidiaries, provides a wide variety of entertainment,
entertainment-related and marketing-related services to both consumers and businesses BIO: Mr. Smith also has more than ten years of experience
in the entertainment industry. His entertainment experience includes working with
American and Japanese companies in the areas of music, film and video. While working
for Taylor Smith, Inc., he was responsible for working with film writers and producers,
and musicians in the development of film and television packages. He also
coordinated recording projects, and functioned as an intermediary between record
companies, promoters and producers. For more than seventeen years, Mr. Smith worked
for AT&T in Detroit, Chicago and Los Angeles. While at AT&T, his
responsibilities included functioning as an Internal Consultant in the company’s
finance department. Since 1986, he has taught classes in business and ethics at
various universities, including UCLA, California State University in Fullerton, California
State University in Los Angeles, and Santa Monica College. TV broadcasting operations also include the All
Sports Television Network, which is the only nationally sports television network on
broadcast television, and Products On Demand Channel (POD), which airs paid programming
from independent producers, small television networks and other entities seeking to have
their content aired throughout the nation. POD, which began broadcasting in February 2003,
now reaches approximately 30 million households through a combination of broadcast and
cable affiliate television stations. Feature film and television production is offered
through Eclectic Entertainment (Eclectic). Eclectic is currently developing five
television series for airing on the Omni Broadcasting Network. Eclectic is also in the
process of entering into agreements with television program distributors. Eclectic's film
production activities focus on creating feature films for theatrical distribution –
not “Made-for-TV” movies. Music production and distribution are provided through two record companies – Retro Records and Eclectic Recording Artists. Retro Records specializes in distributing and marketing new music developed by well-established recording artists. Eclectic Recording Artists (ERA) focuses on producing, distributing and marketing music from feature film and television soundtracks. Additionally, in special situations, ERA will release music from new artists. CEOCFOinterviews: Mr. Smith, will you tell us about OBN and how it developed into a holding company? Mr. Smith: “The first company that was created was Omni Broadcasting, which was the flagship company. Then we created Eclectic Entertainment to handle all the non-broadcast activities. Since Omni focuses primarily on primetime broadcasting to a general market audience, we created another network, which was the Products On Demand Channel (POD) that was handling the other types of programming. Originally, the Products On Demand Channel and Eclectic Entertainment were under Omni Broadcasting, which really did not make logical business sense looking at the different structures. So I created OBN Holdings as an entity to handle all of the different companies we had developed from the time that we first started the Omni Broadcasting Network.” CEOCFOinterviews: What makes Omni a network? Mr. Smith: “There are currently seven major broadcast networks and there are approximately 276 cable networks. Omni is a broadcast network, which means that the programming that we air during our hours of operations, which is predominantly prime time, is under the Omni Broadcasting Network name and brand. We are equivalent to NBC, ABC and CBS as opposed to TNT and USA, which are cable networks. The thing that makes us a network, as with all of the larger networks, is that we have affiliate stations around the country that pick up our programming and air it; that is essentially a network. To have a network, there are two things you need. You need content to show the affiliate stations around the country in order to air the programming and you need a delivery device to get the concept to the affiliates, which is an uplink. We send our signal to a satellite and television stations around the country pull the signal down and broadcasts it in their local areas.” CEOCFOinterviews: What kind of programming are you focusing on? Mr. Smith: “We are targeting adults ages 25 and over. It is somewhat family oriented but we are not the Family Channel and we are not PAX. We are airing programming that would be of interest to an adult audience while being family friendly. We are offering programming that parents will not have to worry about their children looking at it.” CEOCFOinterviews: How do you determine your programming and where does it come from? Mr. Smith: “Some programming we produce ourselves. We have seven shows in varying stages of development that we are creating ourselves that include three music series, a food show and a program focusing on independent films. There are certain programs that Eclectic Entertainment produces and we air on the network, and we have other material that we license from other content providers. We have programming that we are getting from Australia, Great Britain and France that we will be airing on the network. We have a variety of programming that we license from different sources. The networks, whether it is ours or anyone else’s, get their programming from producing it themselves, which we are doing, or from licensing it from different sources, which we are also doing. The FCC (Federal Communications Commission) recently made it possible for networks to produce the product that they air, which they were previously unable to do. Since the FCC changed the rules, virtually all the major broadcast networks currently have their own production entities and this has resulted in there being fewer outlets for independent production companies. This has actually helped us because prior to that ruling, the networks had to buy and license programming from other sources - now they are producing it in-house. Independent production companies do not have the same number of outlets, so they are approaching us and we are negotiating deals that we never would have been able to secure had the FCC rules still been in place.” CEOCFOinterviews: What does Omni Broadcasting do differently from other networks that may put you at an advantage? Mr. Smith: “There used to be a time when a network would take a show, and air it and give it a chance to find its audience. A perfect example is “Seinfeld” when it first came out. The ratings were not good at all and based on today’s model, it would have gone away after thirteen weeks, but because someone decided to let it find its audience, it became extremely popular. Now, because a lot of the networks are pre-selling sponsors and are committing to ratings, if the program that they put on the air does not get the ratings they expect, it gets dropped. The difference with us is that we are trying to target an older audience because we feel that there is a market for us. Many of the programs on other networks are geared toward a younger audience. We feel there is a need for something that is different and we are offering an alternative to programming that is out there and we are in the position where we can give a program time to find its legs; in other words, find its audience. We are not going to immediately put a series on the air, and drop it if it does not immediately work. Another thing that makes us different is our programming philosophy. American Idol became an extremely popular show that went over big. Now, how many shows do you see like American Idol? Many of the initial reality shows such as Survivor went over big, and now you have other survivor like programs. People tend to follow a trend for the various shows; they see something that works and then they try to create a similar program. We do not do that. We try to look at ways to offer people an alternative. If it does not work, at least we will give it a chance. It is like someone taking a class in Karate and if they do not become a black belt in a month’s time, they decide to drop it. We are going to offer different types of programming and give the program a chance to work.” CEOCFOinterviews: Is there a mix between licensing and production that you would like to achieve in terms of revenue? Mr. Smith: “It does not make a difference. If someone comes up with an idea, and if it is something that makes sense, then we will try it. Initially, a much higher percentage will be programming that we license because we are looking at getting content on an international scale. I think there is a lot of great programming in other parts of the world that will never see the light of day in the U.S. This is for a couple of reasons. First, you only have a limited number of outlets that are available and second, the networks prefer to actually produce their own programming so that they own all rights. They can control the licenses, license it and it is an asset on the books. If we are presented with a program that we like, if it makes sense, then I have no problem whatsoever in trying to structure a deal to bring it to the U.S. public.” CEOCFOinterviews: How do you pick up new affiliates and is there much competition out there? Mr. Smith: “The FCC has issued over 4,000 broadcast licenses. Of that number, if you discount the approximately 1,200 PBS stations, there is still around 3000 commercial stations. Some of them are full power stations and some are low power stations. There are only seven television networks, and we are the eighth. If you do the numbers, most of those stations cannot be affiliated with a television network. Many of them are airing syndicated programs or public domain programs. It is beneficial for a station to have a network affiliation because a local station covering a hundred thousand or two hundred thousand homes cannot afford to produce much of their own programming because it is costly, and the advertising rates that they can get for a 30 second spot would not pay off the cost for producing the program. The only alternative is to try to license programs from other sources. By having a network and offering quality programming and structuring deals with the various stations, then we are offering them the ability to get quality programming that possibly has never been seen in the U.S. As a result, I do not see a problem with acquiring affiliates.” CEOCFOinterviews: How do you get your story across? Mr. Smith: “Many people are not aware of it. People don’t fully understand the concept of a broadcast network. The best way to get our story across is by continually being in the public eye with things that are different and new. Another situation is that we have All Sports Television Network, which is somewhat unique in that it is the only national broadcast sports network. The sports networks that most know about are ESPN and Fox Sports, which are both Cable networks. All Sport Television Network is actually a television network that will be available on broadcast television where you can see it both on Cable and over the air. The types of programming that we are going to be airing on that are both traditional and non-traditional sports, and we will probably be airing extreme sports as well. Typically, people think of baseball, football, basketball, hockey and golf as being the major sports. In addition to traditional sports, we will be airing sports like canoeing, tennis, and Australian Rules football. We will also be offering sports things like cricket, SUMO wrestling, and other events that people have heard of but have not seen. When I talk to people about Australian football, they think of soccer and rugby but it is an entirely different game. It is an alternative programming and we believe that if people are aware of this, there will be an audience. I am not talking about the same type of audience as the NBA or NFL, but based on our business model, we do not need a huge audience in order for the company to be profitable.” CEOCFOinterviews: Are you going away from infomercials with your Products On Demand? Mr. Smith: “What I have found in looking for programming for Omni is that there is a lot of content out there and there is not enough hours for us to show all of it. Much of the content is not right for our target market. It might not be right because of the content or just the wrong fit for our particular demographics, but for whatever reason, it is just not right for Omni. In addition to airing infomercials, what we are looking at doing is offering producers the ability to get their shows broadcast to a national audience, which is being done by the major networks all the time. If you have the money, it is possible to buy time on CBS, NBC or any of the other major networks.” CEOCFOinterviews: Will you tell us about the financial condition of the company and do you have what you need to develop your strategy? Mr. Smith: “Being a new company, it is always somewhat of a challenge from a financial standpoint. That type of a situation is starting to function better for us because more people are aware of what we are doing. We have a number of shows in the wings, and the costs that we incur for production of a show is considerably less than what other broadcast networks would end up experiencing. I believe that by the end of the year we will be profitable, and it is based on various things that are coming up in the pipeline, which I cannot discuss yet. In July we recently completed producing a television special called ‘From the Heart,” which is a 50th year anniversary and celebration of the Four Tops singing group. Eclectic Entertainment is producing the concert and the television special. In addition to the television special, which is going to premiere on Omni Broadcasting Network, we are will be offering it to other networks that have already expressed an interest in the special. We will also be selling it to television broadcasters in foreign markets, which we already have interest from to acquire the rights to that particular show. In addition to that, we will be producing a DVD and a CD that we are going to be releasing on Retro Records, another OBN Holdings subsidiary. Many of the things we produce ourselves are not just a function of producing it and airing it on the network but of producing it, airing it on the network, selling it overseas, and licensing it to other U.S. television networks and stations. Whenever there is a musical element or a video element, we also have the capability of distributing the product by DVD and home video and CDs. We cover all facets of entertainment. I see OBN as being comparable to Disney or Viacom. We have television and film production, music production, distribution and all the elements for taking any project and being able to exploit all the different facets of that particular project.” CEOCFOinterviews: In closing, why should investors be interested and is there anything that they should know that perhaps does not come through when they look at the company? Mr. Smith: “I think the thing that is important for the investors to look at is the team that we have put together. We have a very strong team of people who have been in the industry for many years, and they have the expertise to carry out the various projects with the quality that is important to us. I think that another thing that is important is looking at the way that we are running the business. Our major objective is to do it as efficiently and as low a cost as possible. A perfect example is if you look at any television show now, count the number of executive producers, producers, co-executive producers, etc.. Each one of those people adds additional cost to a production but does not increase the quality of the production; those are called “above the line” costs. The money that we put into any production actually goes into producing the product, and not to cover the costs of paying a lot of executives. Another key thing is that, by targeting a more mature audience, I feel we are filling a niche that is not being addressed. If you look at many of the programs today, they geared for 17-25 year-olds. As a result, the needs of a more mature audience are not being addressed. We are addressing those needs in both television and music. Retro Records is focusing and reintroducing artists who have had gold and platinum records previously, but do not currently have a new release out on another record label. Our major objective is to provide quality products and services that are not currently available. I liken us to the Southwest Airlines and the Jet Blues of the world because the bottom-line is those are the companies that are making money as opposed to the traditional older companies with huge overhead. We are an upstart company doing the same thing, only differently. We are going to ultimately be extremely successful.” disclaimers |
"In July we recently completed producing a television special called ‘From the Heart,” which is a 50th year anniversary and celebration of the Four Tops singing group. Eclectic Entertainment is producing the concert and the television special. In addition to the television special, which is going to premiere on Omni Broadcasting Network, we are will be offering it to other networks that have already expressed an interest in the special. We will also be selling it to television broadcasters in foreign markets, which we already have interest from to acquire the rights to that particular show. In addition to that, we will be producing a DVD and a CD that we are going to be releasing on Retro Records, another OBN Holdings subsidiary." - Roger Neal Smith |
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