I drove to LA yesterday to meet CJ Olivares, the general manager of FuelTV to find out what’s going on with the 24-hour action sports cable channel that reaches 25 million households.
The big focus this year for the Fox-owned unit is pushing into international markets and pushing content onto additional platforms, CJ said.
Fuel can focus on new projects because so far, the slowing economy hasn’t impacted its revenues. Fuel is just wrapping up its fiscal year – revenues are expected to be up 10 percent and profits were 50 percent ahead of plan.
International: CJ said the international division is starting to pick up steam. Currently, FuelTV is available in Australia and at the end of next week, it will launch in Portugal. South Africa is next. After that, CJ will work on deals for continental Europe and then Asia.
Because Fuel is owned by Fox, it can work with Fox’s infrastructure on the technical side to create an international feed and tap into relationships that Fox has in those markets with cable operators or other companies expanding into digital cable.
Content will be somewhat tailored to different markets. In South Africa, for example, content will focus on surfing and skateboarding with less snowboarding since there’s not a lot of snow in South Africa. In Europe, kite boarding is popular so that sport may get more exposure on the channel.
New platforms: Fuel is working on getting its content onto different platforms its audience uses. In addition to its Website, Fuel also has a big presence on iTunes. Fuel sells entire shows on iTunes and also offers shorter, free podcasts. In the past five months, 3.5 million podcasts have been downloaded, CJ said.
CJ said Fuel’s advantage is offering podcasts with good-quality video with a beginning, middle and end. Fuel puts 15 to 20 new clips on iTunes every week.
Advertising is just starting to be added to the podcasts with 10 to 15 second prerolls. Nike is one of the first advertisers.
Advertisers outside the action sports industry began pushing Fuel about two years ago to think about putting more content on different platforms, CJ said.
More on advertising: The first advertisers on Fuel were not action sports companies, CJ said. When the channel started five years ago, CJ’s strategy was to build a quality product first and build a working content relationship before asking for advertising dollars. In the beginning, CJ licensed a lot of content from action sports brands, using their in-house films showcasing their professional athletes on the channel.
About two years ago, CJ started talking to the companies about spending advertising dollars with Fuel, saying “I think we’ve done a good job of representing the industry in a good way, would you consider spending with us,” CJ said.
Now, about 20 action sports brands advertise on Fuel, including Quiksilver, Volcom, Sole Technology, Reef and Globe.
Action sports companies account for only 10 percent of total advertisers, however. The rest are companies that want to reach Fuel’s audience – males 12 to 24 – including Toyota, Boost Mobile, Mountain Dew, Snickers, gaming companies and movie studios.
Increasingly, Fuel is working with advertisers to integrate their products into programming to “safeguard against getting Tivo zapped” during traditional commercials. “If you do it correctly, everybody wins,” CJ said. “If there is some value to the consumer, everybody wins.”
Fuel’s revenue stream breaks down this way: 75 percent from cable fees, 25 percent from advertising and international combined.
“We had a great year,” CJ said. ” A lot of that is attributable to what we put on the air. …We’ve hit a nice awareness point. Now when I walk in (to a potential advertiser) and say FuelTV, they’ve heard of us. Or they say, ‘My kid is addicted.’ I love hearing that.”
