Al Gore's $100 Million Makeover

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Joel Hyatt, CEO of Current TV, says he and Gore set out “to democratize—small d—television first and the media industry generally.”

Former Goldman Sachs exec David Blood cofounded Generation Investment Management with Gore. The firm now has nearly $1 billion under management.

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Undaunted, Gore and Hyatt went looking to buy a cable-TV network. The effort quickly became a disaster. Meetings were taken, favors were called in, but nobody wanted them. "We were told repeatedly, 'You're not going to start a cable-television company,'" Hyatt recalls. "'There's no room in the industry for you. Period.'" The only possibility they could find was a yawner of a Canadian news network, called Newsworld International, or NWI, owned by the French company Vivendi. Yet even here, Gore and Hyatt were initially rebuffed. Gore had to tap then French president Jacques Chirac to arrange a meeting with Vivendi executives. Negotiations dragged on for months. "There were probably at least seven or eight times when [the deal] was dead and all but buried," Gore recalls. Finally, after nearly a year of nail biting and a cameo appearance by Barry Diller, who owned a part of the entities--Gore lobbied him in person--Gore and Hyatt snagged NWI in May 2004 for $70 million. (Their investment partners included former Goldman Sachs senior director Philip Murphy, who is now the Democratic finance committee chair; Richard Blum, husband of California Senator Dianne Feinstein; Sun Microsystems cofounder Bill Joy; and Bob Pittman, former chief operating officer of AOL Time Warner.)

They had the network, renamed Current TV, but they still didn't know precisely what it would air. At a meeting around Hyatt's kitchen table in the summer of 2004, the nascent management team kicked around ideas--and kicked them to the curb. One option was to give 200 talented unknowns all around the world video equipment, train them, and set them loose to tell stories. Hyatt and Gore's response: Not good enough. Gore was looking for something "transformational," recalls Current exec Joanna Drake Earl, a veteran of Paul Allen's Moxi media startup. "Transformational?" Earl remembers with a laugh. "I mean...that's hard to manage to."

As Current's August 1, 2005, launch date approached--the old Canadian news programming would end July 31--tensions ran high. "At one point," says president of programming David Neuman, who had produced sitcoms on NBC and Fox, "I got down on my hands and knees and begged for more time." Finally, the team agreed on a formula. They would hire a crew of "vanguard journalists," but work toward the goal of creating a network largely shaped by its viewers, via a Web site that functioned like a production community.

Current TV, Gore's cable channel, turned a profit in only two years.

Today, less than two years in, at least 30% of the network's content is viewer generated, called VC2. Amateur filmmakers, some in their teens, upload three- to eight-minute documentary-style nonfiction segments, called "pods," to the Current Web site. Online modules help aspiring filmmakers navigate everything from framing a shot to negotiating music rights. The online community comments on the videos and votes to "green-light" pods that they want to see on air. Makers of the pods that are aired get $500; Current gets a library of content to use in perpetuity--with no production costs.

The result is surprisingly engaging and unlike anything else on TV. The pods shuffle through everything from cutting-edge bands and dogsled races, to African villagers struggling with HIV/AIDs and dispatches from soldiers serving in Iraq.

Current has also worked with advertisers to create viewer-generated commercials, or VCAMs. To date, some 32 VCAMs have hit the air. "Once we heard the concept, we got on board early on," says Brett Dennis, director of media marketing for T-Mobile, which also runs traditional spots on the network. "It provided us with a groundbreaking way to reach customers, and to encourage them to engage with our brand." Plus, it's delightfully cheap: $1,000 for every commercial that gets on the air. (If the ad is distributed on other networks, the fee can go up to $50,000.) T-Mobile has already selected three VCAMs, and hopes to do more; other VCAM advertisers include Pop Secret, Sony, and L'Oréal. Says Dennis: "It's the best example we've seen of the convergence of a traditional network model and the user-generated Internet model."

Gore is clearly happy with Current TV's progress and optimistic about its future. "The more people who are watching, and the more people who are contributing, the higher and higher the quality goes of the pods from which we select." He adds, "One of the happy problems we've had is explaining Current TV to investors and distributors. Nobody would believe how low our production costs were, or how good the business model was." Current TV is now in 38 million U.S. homes via DirecTV, Comcast, Dish Network, AT&T U-Verse, and Time Warner Cable. Its expansion this year to the UK and Ireland on BSkyB and Virgin Media will put it in another 8.2 million homes.

"We have a belief that explicit recognition of environmental, social, governance, economic, and ethical factors affect business," says Blood.