TN Marketing of Wayzata launches paid YouTube channels

When YouTube set out to offer paid video channels, it got advice from Wayzata-based TN Marketing, which has been delivering subscription-based content to golfers, quilters and other enthusiasts since the era of VHS tape.

TN Marketing, founded in 1998, once distributed videocassettes by mail, and then transitioned to DVDs. The company already had expanded into paid streaming video when YouTube officials called a year ago.

"They started telling us their vision for end-user-paid subscription-based content, and we would be finishing their sentences," said Jim Kopp, executive vice president of business development and sales for TN Marketing. "They said, 'Who are you guys again?' "

In follow-up talks, YouTube asked about TN Marketing's experience with price points, annual vs. monthly subscriptions, renewal rates and what type of content performs better, entertainment or instructional, Price said.

As a result of that connection, five channels that TN Marketing is producing were among the first 50 paid channels that YouTube launched in May. Two are for TN Marketing partner brands — Popular Photography magazine's PhotoGuide+ channel and the Professional Golf Association's PGA Digital Golf Academy.

Three channels represent affinity groups that TN Marketing has built, Woodworkers Guild of America, Fix My Hog (for Harley-Davidson enthusiasts) and Personal Defense Network.

Getting consumers to pay for content on a site known for a seemingly endless amount of free video won't happen overnight. But Kopp and Cal Franklin, TN Marketing president, CEO and co-founder, believe its high-definition, multicamera video productions with talented instructors help differentiate its programming and win subscribers.

"That's content that people aren't going to get free because it's just not there," Franklin said. "We believe and YouTube believes it's going to take some time. We're in for the long haul and so are they."

Another element of TN Marketing's streaming content strategy, Franklin said, is to make video available on mobile devices, tablets and connected TVs, wherever and whenever consumers want it — such as a golfer looking for swing tips while practicing at the range.

"We've embraced the change in technology and told ourselves let's not fight it, let's join in and learn how to embrace the digital era and figure out how we can take what we've built and enhance it with the different channels we now provide," Franklin said.

TN Marketing's goal this year is to build 10 to 12 digital platforms to distribute content for partner brands and its own brands, said Franklin, who founded the company with Boston-based entrepreneur Steve Belkin, founder of Trans National Group, which markets travel and other services to affinity groups.

Franklin said company-produced streaming sites, the first of which went live in last year, expect to have more than 20,000 subscribers by the end of 2013 and more than 100,000 in the two or three years.

The company's streaming video business will account for roughly 10 percent of its projected $30 million in revenue this year, Franklin said, a chunk of which comes from advertising on streaming sites in addition to subscriptions. It complements TN Marketing's long-standing continuity marketing programs, which have more than 200,000 direct-mail buyers.

In its early days, TN Marketing typically licensed content from cable or public TV channels, Franklin said. As the company grew, it began producing much of the content it distributes under others' brands, and now has crews taping somewhere in the country every week.

A few years ago, Kopp led an effort to build affinity group brands that the company would own and for which it could develop content. "The premise is, produce once, monetize through multiple channels many times," he said.

The expert says: Michael Porter, director of the master of business communication program at the University of St. Thomas' Opus College of Business, said companies like TN Marketing that embrace changes in technology or their markets are more likely to survive.

"It's that level of foresight and entrepreneurship that makes businesses like theirs successful," Porter said. "They don't stop what they're doing but say 'yes' to the next thing. They don't have one stream of revenue and one stream of expertise, they have every stream they can tap into and all of those feed the flow of revenue."

Todd Nelson is a freelance writer in Woodbury. His e-mail address is todd_nelson@mac.com.