When Robert L. Johnson, a young lobbyist for the National Cable Television Assn., was trying to start a cable channel aimed at black viewers in 1979, most potential investors wouldn't give him the time of day. They felt he had no experience as a television programmer. John C. Malone saw it differently, however. The head of Denver-based Tele-Communications Inc., the nation's largest cable operator, was so intrigued by Johnson's idea that TCI coughed up $500,000 to help him launch Black Entertainment Television Inc.
Headquartered in the tony Georgetown section of Washington, BET has been on a roll ever since. By feeding a steady diet of music videos, news, and infomercials to black audiences, BET has sailed through a recession that has devastated other media companies. How come? BET is the only programmer primarily serving black viewers, a lucrative ad market. In the fiscal year ending July 31, analysts expect BET's revenues to grow 10%, to $68 million, while profits could rise about 18%, to $14 million.
Not that BET hasn't hit the occasional rough patch. Last October, its chief financial officer and comptroller were fired for allegedly embezzling $700,000. The company won't comment on the episode, which is being investigated by the U.S. Attorney in Washington. The two executives weren't available for comment. Another potential setback: the new cable-TV regulations adopted by Congress in April, which will force cable operators to roll back the rates they charge households by about 10%. Analysts fear that operators might cut back the amount they spend on programming provided by BET. Roughly half of BET's revenues come from such operator fees.
RADIO PLAN. Still, Johnson, now 46, is undaunted. He hopes to transform BET into a media conglomerate. In addition to its cable-TV network, which reaches 36 million households, BET has also pushed into print. Johnson launched Young Sisters & Brothers, a monthly magazine aimed at black teenagers, in 1991. YSB is one of the hottest new properties in the industry: Its circulation is already at 80,000, and it was a finalist in two categories in this year's National Magazine Awards. Later this year, Johnson plans to launch BET Radio Network, which will supply music and news to urban stations.
And the quest for new business doesn't stop there. Earlier this year, Johnson began BET Direct to market BET's own products, such as a skin-care line for black women. Pay-per-view concerts or movies aimed at black audiences may follow. "I'd like BET to have the same perception in the black community that Disney has in the general community," says Johnson. Judging by his accomplishments, BET's boss may someday get his wish.