But for at least one local content pioneer, the programming business has become financially draining. Ringgold Telephone Co., a telco in northeastern Georgia serving fewer than 2000 video subscribers, has been delivering local content since the launch of its IPTV service in 2003, but the company may have to scale back production if it can’t find a way to make more money by the end of the year, said Phil Erli, executive vice president of Ringgold.

Ringgold has a TV studio where it produces 10 to 12 original shows monthly, such as cooking, gardening, fitness and children’s programs. The company also broadcasts city council meetings and even some local sporting events.

Erli said the problem is that Ringgold isn’t able to offer features such as HD programming and a TiVo-like digital video recorder (DVR) over its IPTV service. (See related story on page 6.) Without those services, subscribers won’t switch to or continue using Ringgold’s video service, regardless of whether the company offers local programming, he said.

“Local content doesn’t make up for the things you’re missing like HD and DVR,” Erli said. “Our customers love our local content, but they don’t love it enough to forego HD or a decent DVR service.”

Erli is trying to come up with creative ways to pay for programming. The company was able to raise about $35,000 from local businesses to create a series of segments documenting the region’s rich Civil War history. One segment focuses on the Battle of Ringgold Gap, which served to prolong the war by stopping Maj. Gen. William Tecumseh Sherman’s March to the Sea.

The company also has considered creating commercials for local businesses and inserting them into its local programming as ETC does, but the ad-insertion equipment is expensive for a small telco.

“By the time we’d pay for the equipment, anything we would make on advertising would get eaten up in the cost,” Erli said. As an alternative, Ringgold has worked out a new deal with an unnamed reseller who will co-locate ad-insertion equipment in Ringgold’s headend, he said. That reseller then will act as a kind of hosting provider for Ringgold’s local ad-insertion business, he explained.

Ringgold also is working on a new deal with a national satellite broadcasting company that reaches 15 million homes to swap some of the telco’s own local content for advertising time on the larger company’s national programs. Erli declined to name the satellite broadcasting company. The idea is that Ringgold could go to various regional businesses in its serving area and offer them national exposure through the larger provider, Erli explained. “If I could do that, I might be able to make enough on advertising to offset the cost of local programming,” he said.

In addition to selling advertising, some telcos now are producing and selling DVDs of their own content. For example, diversiCOM used to go out and film weddings in the community and then sell the DVDs, but the company has moved away from that practice because of the amount of time involved on weekends and the videography expertise required, Mohs said.

FMCTC sells DVDs of specific high school games, and it compiles season highlight videos that may include award banquet footage or interviews with coaches and players. For videos of specific games, FMCTC typically charges $10 per DVD, Conry said. For the highlight videos, the company charges $15 but then donates all of the proceeds to the school’s booster club.

Eventually, local programming likely will include delivery via video-on-demand (VOD). ETC and Ringgold both are working toward making their libraries of content available as VOD services.

“We’re slowly moving most of our local content to VOD, and we’ll use the local channel as a barker channel to tell people what’s available,” Erli said. “That makes more sense than the TV model for this kind of content. We should let people choose what they want to watch and when.”