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Will NewsmaxTV Be the QVC of News?

NewsmaxTVChris Ruddy is taking a business built on magazine subscriptions, newsletters, self-help books, and vitamin supplements and adding a cable channel to the mix.

Ruddy, the conservative (but registered Independent) co-founder of Newsmax, talks with BusinessWeek about his latest venture, NewsmaxTV, which, starting in June, will broadcast 9 hours a day from new studios in Boca Raton, FL. “Our goal is to be a little more boomer-oriented, more information-based rather than being vituperative and polarizing,” he says. As for the business, Ruddy says he’s prepared to pay cable systems to carry the channel, and can make money in other ways, including selling Newsmax’s consumer products on TV.

Every viewer is a potential customer for his newsletters and vitamins. He’s also exploring partnerships with other conservative media entrepreneurs, including Glenn Beck and David Smith, CEO of Sinclair Broadcast Group (SBGI), which in 2013 bought Washington, D.C.’s ABC affiliate WJLA-TV from Allbritton Communications. “Cable channels are getting between $2 and $8 per subscriber per month in advertising. My view is I need to make 60¢ per subscriber to break even … if I’m paying about 25¢ per subscriber in programming and 35¢ to the distributor. I already have the infrastructure to easily do this.”

The network will remain free on the Web and hopes to be in about 50 million homes through Dish Network, DirecTV and several cable systems. It will be years before NewsmaxTV will be truly competitive with other cable news networks, especially the one it will emulate most, Fox News which has been the most-watched cable news channel for 12 years.  But Ruddy will still try: “If we take 10 to 15 percent of the Fox audience and they are making $1 billion a year, then we are going to be hugely profitable.”

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