Corus revamps lineup to also cater to men at women's channel W Network

New data are giving the specialty channel operator a better idea of how Canadians are watching television - and who isn't watching - Corus (TSX:CJR.B) president and chief executive officer John Cassaday told analysts Wednesday

The Toronto-based company found it was not hooking male viewers into the W Network, who were turning the channel off more than new viewers were turning it on

"We had a schedule that was largely based on transformation shows - beauty shows where the protagonist was transformed through the course of the show," Cassaday said in an earnings call

"Quite frankly, men just weren't willing to sit through that and watch with their wives whereas in the case of other lifestyle genres, such as home improvement, there was a greater willingness to do that."

Chalk it up to the portable people meter, a device introduced last year intended to more accurately track how Canadians are watching television and listening to the radio, by literally strapping a pager-like device to a select number of people and monitoring their viewing habits

The project was designed to help advertisers gauge who is really watching what shows and channels, so they can target their campaigns more accurately

At W, what it revealed has been less than favourable and Cassaday said it has caused the company's "ranked position" amongst other specialty cable channels to decline, though he didn't provide any specific numbers

If you're scratching your head over why Corus would want to entice more men to a decidedly female channel - literally represented by a capital "W" for "women" - then you need to understand how selling advertisements works

In the ad world, the more eyeballs that see the marketing campaigns, the better. That means advertisers are hunting for shows with its target demographics represented, while other viewers are considered a bonus

"If you have the men and the women there, you've got the potential for more people you can sell the advertising to," said David Shore, an analysts at Research Capital Corp

However, chances are a lot of men won't want to watch a women's channel that runs mostly ads for feminine hygiene products, perfumes and makeup. But pair female-angled spots with some advertisements for major car companies as well as household cleaning supplies and maintenance, and suddenly male audiences feel a little more comfortable tuning in

"You need to have stuff that's going to appeal to the male because they are going to be in the room anyway," he said

If the men keep watching alongside the women then viewership numbers go up, and the advertisers turn to the channel - in this case the W Network - when they want to buy airtime

It's a plan that Corus hopes will work and the company has tweaked its W Network schedule in hopes that the men will return and help the company reverse its eroding viewership at the channel

Cassaday hinted that further programming changes could be afoot at CMT, the country music video television channel it operates, because "video flow just doesn't perform as well" under the new ratings tracking system

Corus made similar moves last year at youth-oriented YTV, where it added more shows targeted at both children and their parents during prime time, a plan it said has successfully attracted more advertisers

"Our co-viewing ad strategy has delivered double-digit ad growth in the first half of this year and we expect the strong trend to continue in the back half," Cassaday said

"These are evolutionary issues that we've got to deal with that resulted in moving from one rating methodology to another," Cassaday said

"I think that we've demonstrated for quite some time now our ability to respond effectively and quickly to changes in the marketplace."

Specialty channels, are the mostly niche-targeted channels on the cable box that subscribers pay extra to have access to each month, and are a highly lucrative market in Canada

Corus has bulked up its business with high-profile branded specialty channels, and sometimes revamps underperforming ones like Discovery Kids in favour of household names like Nickelodeon, or Drive-In Classics for W Movies

On Wednesday, Corus presented a mixed financial report with revenue beating expectations on the strength of improved television advertising but profit falling short of estimates due to one-time items

The company's revenues increased last quarter to nearly $192.7 million, up six per cent from a year earlier and above the consensus estimate by analysts. Analysts had expected $189 million in revenue

However, Corus' second-quarter net income missed expectations - falling to $14.6 million, or 18 cents per diluted share - down about 50 per cent from $29 million or 36 cents per share a year earlier

The quarter included a $14.3-million debt-refinancing loss, while the year-earlier period included a $7.2-million gain from the sale of a residential audio service. Excluding those items, adjusted earnings would have been 30 cents per share - compared with 31 cents per share a year earlier

Eight analysts who track the company had been expecting Corus net income would be 30 to 34 cents per share, with consensus of 32 cents, according to figures compiled by Thomson Reuters

Company shares were down 20 cents to $19.66 at the Toronto Stock Exchange late Wednesday morning

Corus Entertainment Inc. also operates Treehouse, VIVA, Movie Central, HBO Canada, Nelvana, Kids Can Press and radio stations including CKNW, CKOI and Q107

Most of the revenue improvement came from the company's television operations, while overall radio sales declined slightly

TV generated nearly $137 million in revenue, up from $123.4 million a year earlier, helped by stronger viewership numbers at channels like Teletoon and CosmoTV

"This is a business where revenue follows ratings," Cassaday said

"There's no period of forgiveness, you pay for it right away and you benefit from it right away... we see that particularly in our radio business where it almost turns on a dime."

Radio's overall contribution dropped to $55.7 million from $57.9 million - although there were some bright spots. Revenues increased four per cent in Ontario, but decreased 12 per cent in the West and two per cent in Quebec and other areas. Need more information regarding hygiene for kids ?

The company noted that the radio division, which was slammed by the economic downturn and weakened spending by advertisers, is starting to "trend in a more positive direction."

"One of the big three automotive companies returned to radio (advertising) spending in the second quarter," Cassaday said

"The sector in Ontario, in our view, is poised to see further growth."