Plum TV President Tells Us Why He Wants The $100K Customer

After co-founding LXTV, longtime TV executive Morgan Hertzan acquired, and is now co-president of, Plum TV — a lifestyle network reaching more than 5 million of the most affluent viewers in the country.

Among cable channels, its reach is tiny — but that's the point. Plum is targeted at a niche, upscale audience, and it's not for everybody.

Plum TV is currently distributed on broadcast and cable TV in Los Angeles, Boston, Philadelphia, the Hamptons, Colorado, at PlumTV.com, and on Plum TV's video on demand iPhone app.

We talked to Hertzan, who tells Business Insider he is going after the "$100K customer not the $500K customer," to discuss the importance of multi-platform content for a focused, upper-middle class audience.

Business Insider: What makes Plum TV different from other TV networks?

Morgan Hertzan: The thing that makes us unique is that we decided to pursue a strategy of over-the-air broadcast for distribution. It is a very challenging environment for independent networks with cable providers these days and I think that if you are one of the small guys, the way that you can thrive is by having your content in as many places as possible and that includes your content being on things like YouTube and Hulu.

But I also believe being on linear television — I think you can't be on one place or the other. You need to be everywhere and I think as independent as possible. If you aren't doing deals directly with cable operators it's very difficult to get your content in as many places as you need if you're small, so what we decided to do is work with over-the-air broadcasters. It allows us — because of 'must carry,' you know FCC 'must carry' rules — it allows us to get our contact on cable and also in lots of other places too. On YouTube, on Hulu, on over-the-air, basically anywhere that we want.

BI: Why do you feel it's so important to put all content online? Is that taking away from people needing to tune into Plum or another network if you have the content online already?

MH: If people see something in one place and like it, they're more likely to consume it in a lot of other places. So if you see something online and say, 'gosh I really like this show' and you also know it's on TV you're more likely to then watch the TV show. So online is, in addition to being its own revenue stream and its own destination, it's also a great place to generate sampling so people who may not be watching Plum on TV are able to watch it online.

I think there's such overwhelming evidence in our business that each helps the other. I don't believe that one cannibalizes the other, I think that each helps the other. If you look at all the trends, media consumption is rising, people are watching more online, but they are also watching more TV than ever and I think those two things are related because people are watching stuff online and saying 'I love it online and I love it on television and I'm going to watch it more and more and more.'

BI: With Plum, do you see that more people are going to the website or watching it on TV; what do your numbers say?

MH: It's difficult for us to get into those kind of metrics. [Hertzan declined to elaborate on ratings and numbers.] If you want an example you can look at something like "Downton Abbey" that premiered on television, had a lot of interest, then went off the air and people downloaded it and watched it on iTunes and consumed it tremendously digitally and then when it came back on TV it had gangbuster ratings. I don't think "Downton" could have a premiere like it did without all of the digital viewing that it's had when it went off television for six months or whatever it been. There's lots of examples like that, where shows are on TV, then go off TV then the audience consumes them and samples them and when they come back on TV the numbers are bigger.

[Sidenote: Plum TV is producing a new show titled "Weekend Aristocrats" — the first reality spin on "Downton Abbey" set to premiere on air February 17 and on Hulu the following day. The show goes inside the struggle of Lords and Ladies to keep their ancestral homes by doing the once unthinkable to earn some extra cash — inviting in American tourists as overnight guests.]

BI: Plum appeals to a different, often wealthier, audience. What is the advantage of audience targeting?

MH: What you're seeing in the media landscape right now are two things that are doing very well. Very big, broad services like ABC or TNT — things that are very, very appealing to everyone — there's still a place for things like the Olympics and the Golden Globes and the Oscars.

But then you have the other side where you're seeing success is in much more targeted programming, and I think that it's difficult to be in the middle, you either want to be the big guy that appeals to everyone or you want to be a kind of great specialty product that has a very loyal and dedicated audience.

I think what we decided to do with Plum is say we are a network that is really focusing in on this idea of living the good life. We're not super upscale, we're not for super-duper wealthy folks but what we really are for is people that enjoy great food, great trips, taking care of themselves, spending time with their families.

I think that's a little bit of a different brand position than there is in the market place. So we're really pursuing this multitask strategy.

We think that in this space there's a place for premium content — original content — and we think that appeals to an audience that appeals to advertisers.

BI: Do you think that it's more important to have a wealthy audience than a large audience?

MH: I wouldn't say that it's important to have a wealthy audience, I think that it's important to have either a very cohesive target audience or a large audience. The most valuable thing in media is a huge audience, right under that is a very targeted audience. What you don't want to have is a kind of a medium-sized audience that doesn't make sense.

In other words, you don't want to have an audience you can't sell against or market against. You want to have an audience that you can say, 'these are who our viewers are, this is what our brand is and this is what our identity is.' A very clear proposition to both your consumers and also your advertisers and partners as to what that is.

BI: What do you think is the future for programming and original content on independent stations?

MH: When I think of what we, everybody in the industry, is seeing is that the content is becoming more platform agnostic, but the number one driver continues to be high quality content. So I think that what we'll see as a trend is a continued investment in premium content regardless to what the platform is. I think that's what people have seen that's been a change over the last couple of years. People used to think "well people will watch anything on any platform." Well, that's not really true. What we've seen is that people will watch anything good on any platform. Not just anything on any platform.

BI: What do you predict, or what are your goals for the next five to ten years with Plum TV?

MH: I only know our goals for the next 12 months.

BI: What are your goals for the next year?

MH: I think our goals for Plum for the next year or two are to increase distribution. We're really focusing on increasing our lineal distribution right now.

BI: How do you plan to go grow distribution?

MH: By having a great product. The number one way to grow distribution is to have a great product that people want. Especially in a world with so much media and so many content creators and where you know everybody has a web camera and can create content and upload it online and you know just an explosion of product. The best way to expand is to grow distribution, is to have a great product.