ATLANTA — The public is probably going to have to pay for the programming on the digital services that dozens of TV stations start transmitting in the next year or so.
That analysis came out of the keynote panel on digital programming on Tuesday, the second full day of the National Cable Show at the Georgia World Congress Center here. “The economic model to support digital high definition hasn’t been figured out yet,” said one of the panelists, Leo Hindery Jr., president and chief operating officer of TCI (Tele-Communications Inc.), the second largest cable operator in the U.S. behind Time Warner Cable.
As Hindery’s boss, TCI chairman John Malone, said in an informal conversation with reporters later in the day, “There’ll be huge costs” in converting all of the current programming to high def, “but no incremental revenue” because Nielsen ratings and advertising revenues won’t shoot up for a TV program just because its picture and sound quality are markedly better than before.
But one way to bring in revenue is to charge the public for these high-def program channels. Following up on a statement he made Monday (Daily Variety, May 5), Malone suggested to reporters that the broadcasters make deals with movie-based networks like HBO, Showtime and Starz and with other services like The Discovery Channel and sports networks to transmit their programming through separate feeds in HDTV to cable systems on a 10-channel digital tier that would cost the subscribers $10 extra each month. These channels would all lend themselves to the dazzling HDTV image, and cable operators and broadcasters would divvy up the revenues from cable subscribers.
Malone suggests that these networks wouldn’t charge the broadcasters big license fees to transmit their HDTV signals because it’s the same programming these channels are sending out on their regular feeds. Similarly, time-shifting of popular broadcast-network primetime programming could also be included in the digital-HDTV 10-channel tiers, he said.
But Geraldine Laybourne, president of Disney/ABC Cable Networks, one of the participants in the programming panel, said, “We have no intention of tak-ing our cable assets and moving them over to digital tiers.”
The question that the moderator of the panel, CNN senior analyst Jeff Greenfield, kept coming back to was: Why would people pay up to $10,000 for a high-def TV when all of the programming will still be available on current TV sets as long as the household buys the digital box?
None of the panelists had a good answer.