TELECOM Digest OnLine - Sorted: AOL's Steve Case Finds Lime Twist in Wisdom

AOL's Steve Case Finds Lime Twist in Wisdom

Andrew Wallenstein (
Mon, 25 Jul 2005 19:10:07 -0500

By Andrew Wallenstein

The man who packaged the Internet to the masses is trying his hand at
television, but for a more discriminating audience.

In April, America Online co-founder Steve Case rose from the ashes of
his company's ill-fated merger with Time Warner by declaring his
intent to build a new empire based in the health care industry.

His private holding company, Revolution, has been on a buying binge
funded in part by $500 million of his own fortune. Among the companies
acquired was Wisdom Media Group, a small, family-run cable venture
based in Bluefield, W.Va., not too far from AOL's Dulles, Va.,

At this past weekend's Cable & Telecommunications Association for
Marketing convention in Philadelphia, Revolution announced plans to
rebrand and relaunch the Wisdom cable channel as the keystone of a
multiplatform media play including radio, Internet, wireless and DVD.

In line with Case's ambitions in the health care business, his media
strategy is aimed at a loosely defined market segment interested in
healthy, eco-friendly goods and services ranging from Whole Foods
groceries to Toyota Prius hybrid vehicles. Known to market researchers
by the acronym LOHAS, or lifestyles of health and sustainability, the
group has a spending power pegged at more than $230 billion.

But Case will have his work cut out for him, notwithstanding the
difficulties independent cable ventures have had amassing significant
distribution. The tens of millions of Americans that comprise the
LOHAS market have proved to be notoriously resistant to television
itself, which falls somewhere between the Twinkie and the Humvee on
their list of favorite inventions.

"If you are used to doing mass-market TV, you are going to run into
trouble," said Paul H. Ray, a leading market researcher studying LOHAS
who wrote the defining text on them in 2001, "The Cultural Creatives."
"Their allergy to hype is huge, and that is the big problem with
conventional TV. It is built around hype."

But Revolution believes they are preparing a more sophisticated
approach appropriate for an audience that has grown too large to
dismiss. "This category has moved out of the subculture and into the
mainstream," said the channel's CEO, C.J. Kettler, who was president
of sales and marketing at the Oxygen network.

Case could not be reached for comment.

By the fourth quarter of the year, Wisdom will be rechristened Lime --
"healthy living with a twist" is the tagline. Complete with
wedge-shaped logo, the brand alludes to the color of the titular
citrus, green being synonymous with ecological concerns. But Lime
connotes a "lite" green, as Kettler puts it, befitting a hipper
sensibility the brand aspires to in hopes of deflating stereotypes
associated with such new-age totems as granola or healing crystals.

"What would be best for us is to take a more unexpected approach to
the category, something with a sense of humor," Kettler said. "The
category has been so serious. We're a media brand, we want to appeal
on emotional level."

True to form as an ecologically conscious venture, Revolution is
recycling a used channel to create its own, crafting Lime out of
pieces of Wisdom (mainly its distribution deals), a pact with Sirius
Satellite Radio and 1,000 hours of such library programming as "Yoga
Zone" and "Lectures With Deepak Chopra." Kettler plans to add original
programming as well as acquired comedy and drama series or films that
have eco-friendly themes.

Another environmentally aware cable magnate, Al Gore, adopted a
similar strategy, acquiring NewsWorld International from Vivendi
Universal to be remade into Current, a youth-targeted network that
launches Aug. 1.

With cable operators no longer interested in adding linear channels to
crowded digital lineups, "rebranding an existing channel is a smarter
way of getting distribution than starting from scratch," said Debra
Sharon Davis, a media strategist who also attempted to acquire Wisdom
for a consortium of clients.

Launched in 1998, Wisdom has largely been in a vegetative state since
the death of its founder, cable pioneer Bill Turner, in
2002. Revolution will harvest carriage agreements with distributors
including Comcast and EchoStar, which will put Lime in 6.5 million

Sources indicate it is Wisdom's deal with Comcast, inherited from the
operator's acquisition of AT&T Broadband, that will enable Case to
turn this cable-industry lemon into Lime. The channel has a place on
select Comcast systems until at least 2009. Comcast and EchoStar
declined comment.

Lime is aiming for a breakthrough this category has yet to sustain;
bit players come and go, and such existing channels as Oxygen and
Lifetime have dabbled here. Los Angeles-based Oasis TV is primarily
broadband, but the outfit recently secured video-on-demand deals with
Time Warner and Akimbo.

The problem might lie with the nature of the medium. Both programers
and advertisers tend to rely on the glitz and glibness that the
Birkenstock crowd detest, Ray argues. He believes they favor more
plain-spoken information available via print or Web that rarely
translates to TV. "They've turned to the Internet because they are
tired of shlocky programing," Ray said.

But the timing of Lime could be to its benefit. Corporate America is
waking up to a slice of the population willing to pay a premium for
such products as hybrid vehicles (Toyota, Ford) and energy-efficient
appliances (General Electric) with targeted marketing efforts. Giant
food companies like General Mills quietly are backing boutique gourmet

"Lots of sectors are transforming, and the media has an huge
opportunity to transform as well," Kettler said.

What remains to be seen is as how Lime fits together with the rest of
Case's holdings, which include controlling shares in real estate
properties like Miraval, an Arizona-based wellness resort. A chain of
private health clinics is rumored to be his next project.

"It's still early in the game, but if there's synergies to be had,
they will happen," Kettler said. "Steve is very involved from a
strategic perspective."

Reuters/Hollywood Reporter

Copyright 2005 Reuters Limited.

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