Cable World: ONLINE EXTRA: Q&A With TVG's Ryan O'Hara

An extended version of the interview that appeared in the print issue of CableWORLD.

By Mavis Scanlon

When he was studying for an MBA at Harvard, Ryan O'Hara never imagined he'd end up running a horse-racing network. Yet the experience he gained overseeing interactive TV strategy and development at BSkyB and as SVP of business development at Gemstar-TV Guide has prepared him well for his current role as president of Gemstar's horse-racing and wagering network TVG. The recent deal TVG cut with EchoStar's Dish Network allows viewers to place bets with their remotes--an option O'Hara hopes can be replicated with the network's cable distribution partners.

CableWORLD: What's been your mandate since you were named president of TVG last June?

Ryan O'Hara: My mandate has been twofold: to grow the network quickly both from a revenue standpoint and a distribution standpoint, and to make the brand synonymous with the sport of horse racing.

CW: What will drive TVG's cable distribution up from its current 14 million-plus homes?

O'Hara: A little over two years ago we were in 8 million homes and now we're approaching 15 million. So we're looking to sustain that growth. The reception of TVG so far has been pretty good. And we're having good discussions with a couple of other operators to grow our distribution. Our remaining holdout is Time Warner Cable, and we've been in discussions with them about TVG.

CW: Who or what company is exerting the most influence in the United States in terms of interactivity?

O'Hara: You're going to get me in trouble. Can I name three? I would say Scott Higgins, who runs Dish Interactive. He has aggressively pushed Dish into the lead in total systemwide interactive products. And then Comcast and DirecTV seem to have big plans as well.

CW: What have you brought to TVG from your years at BSkyB?

O'Hara: In 2004 BSkyB did $556 million in interactive revenues, of which $330 million was gaming related. Launching a large number of interactive applications did three things for Sky. One, it provided buzz for the platform so people of all ages would be talking about the cool things Sky was doing. Two, it reduced churn because cable or other providers didn't have the same suite of offerings. And three, it drove revenue, which helped pay for the expense of interactivity.

So from a Sky perspective when I was there we looked at it as a subscriber acquisition tool, a churn reducer and a revenue driver. Having learned there how successful interactivity was an in particular gaming, what I've brought to TVG is a focus on taking the brand and the power of horse racing and the unique regulatory stature of horse racing to extend interactivity through the remote.

CW: How big a driver will gambling be for interactivity in the United States?

O'Hara: Well, Britain has more liberal laws so I think it was in larger portion there. In the U.S. it'll be a broader mix of interactivity. But I do think that horse-racing gaming will be an important part of any portfolio of interactivity.

CW: So what's the revenue potential in this form of interactive gambling for your distribution partners?

O'Hara: We just started to market the product with Dish. And the early usage looks exciting but it's far too early to comment on that.

CW: What new interactive applications will Dish subscribers receive as part of the recent launch?

O'Hara: Those viewers watching TVG have a gray trigger in the upper corner of the remote, and when they press the select button, the screen goes into quarter screen, and you can get statistics, information, data from the application. And you also can wager, if you're a customer.

CW: Last year revenue at TVG grew about 37%, to almost $39 million. How will you continue converting viewers into wagering subscribers in order to keep that pace of growth?

O'Hara: There are a couple of ways. We use our network to communicate with subscribers to get them to both sign up for the service and then to frequently participate. And then we also grow the reach of our network through working with affiliates to get the network into more homes.

CW: What aspect of your job do you spend the most time on?

O'Hara: The biggest aspect of my job is two pieces. One is programming. We're live 14 hours a day, so it's an all-consuming task. And then second is direct marketing to consumers to get them to be subscribers for TVG. In a lot of ways we're like QVC--we're trying to get people to watch our network or stumble upon it to understand what we offer and start to interact with us. So getting subscribers to sign up, and then secondly once they sign up, to get them to frequent our network every week or every day and wager and interact with us more and more often and enjoy the product in a more intensive way.

CW: So what's actually more popular on TVG, the races themselves or the race-related features and programming?

O'Hara: For some people, the sport of horse racing and the associated pageantry is what they enjoy. There's another large segment that drives the majority of our revenue, which is more about the gaming aspect of horse racing. And so we program to both.

CW: TVG just lost its director of broadcast operations, Dan Noel, to its much smaller rival, HorseRacing TV. What's the significance of his move?

O'Hara: He had departed the network several weeks before, so it has no impact.

CW: Did he leave voluntarily?

O'Hara: Yes.

CW: HorseRacing TV, owned by racing industry heavyweight Magna Entertainment, accepts wagers from residents in significantly more states than TVG, which accepts wagers in 12 states. Why the disparity?

O'Hara: TVG takes a very conservative approach. From a company standpoint we're very, very conservative. Magna has decided to take on a different risk profile.

CW: Is there room for any more networks that cover horse racing?

O'Hara: No. I believe long term for each major sport it makes sense to have one network covering that sport.

CW: Any chances of consolidation between the two that are out there now?

O'Hara: For now I think we're both going to try to do what we do best.

CW: What tracks or races do you not cover that you'd like to?

O'Hara: Woodbine is a track that's in Canada that's interesting to us, and then some of the tracks in New Jersey we'd be interested in covering.

CW: How did you learn about the world of thoroughbred racing?

O'Hara: I attended the track as a fan with my father when I was growing up, and watched the Triple Crown and Breeders Cup over the years. Since I've been president of TVG I've been engrossed in all aspects of the sport and the business of horse racing.

CW: Did the popular book and movie Seabiscuit have any effect on the network's visibility?

O'Hara: I think both Seabiscuit and Smarty Jones' run at the Triple Crown last year widened the reach of the sport beyond the core segment of viewers to a wider segment. It helped us on the programming side--we've had segments with the producers and the creators of Seabiscuit and then also on the Smarty Jones front we were able to build upon that story and reach outside its core audience.

CW: Tell me about your lobbying efforts for increased availability of interactive gambling.

O'Hara: We have a regulatory team that works with each state and their racing commissions to advance what we call advance deposit wagering.

CW: To broaden your distribution do you need to increase the number of states that you accept wagers from?

O'Hara: No. We think that horse racing is a top 10 sport, and the interest in horse racing has shown substantial growth over the last two years so we think on its own as a sports network that's fairly priced it's a terrific complement to any package that an operator offers.

CW: Gambling can turn into a serious problem. Why should we make it easier for people to gamble?

O'Hara: We have a very stringent policy and a program called AWARE that helps people with problem gaming issues. So we feel pretty good about the way we approach it and we are conscientious of our responsibilities.

CW: Do you ride horses?

Ryan O'Hara: I don't ride horses, but I grew up attending Delmar and Hollywood Park racetracks.

CW: If you had to handicap which platform might win the race for interactivity what would you say?

O'Hara: It will be easier for satellite to push out applications systemwide, but cable will have the two-way interactive advantage.

Getting Personal With Ryan O'Hara

Hobbies: Beach volleyball, tennis and my 6-month-old twins.

Last Vacation: Tahiti, last June with my wife.

On His DVR: 24, The Apprentice and TVG's Trackside Live.

Last Book Read: DisneyWar, by James B. Stewart.