Cable deal extended

HBO, Cinemax go on with Comcast contract

Corrections were made to this article on Aug. 25, 2003.

HBO and its sister channel Cinemax have extended their carriage deal with Comcast in a contract that includes video-on-demand and high definition for both networks.

For Comcast, the biggest cable operator in the U.S. by far, with more than 21 million subscribers, the HBO/Cinemax deal follows recent cable-network signings with, among others, Showtime, ESPN and Court TV.

The deals are crucial to Comcast’s strategy of driving subscribers to buy its digital boxes and start using services on digital such as video-on-demand and high definition.

As the monthly cost of basic-cable channels such as ESPN, TNT and regional sports networks keeps inflating the expenses of cable operators, Comcast is looking to harvest more revenues from the add-on services that come with digital boxes.

VOD lure

Comcast’s goal is to entice its digital subscribers into navigating through video on demand by not charging an extra monthly fee for the privilege.

The hope is once people get accustomed to the convenience of calling up an episode of hit HBO series like “The Sopranos” or “Sex & the City” savoring full DVD capability (pause, fast forward, rewind), they’ll be less likely to cancel their digital boxes or drop cable altogether in favor of a satellite dish.

And there’s no separate pay-per-view charge for all of the programming HBO makes available in its video-on-demand windows.

The reason Comcast can offer HBO on Demand without an extra fee is that the service is folded under the retail price of HBO, which can go as high as $19.99 a month. But for that price, the subscriber gets not only the free on-demand service but all of the HBO multiplex channels, including the HBO cloned network that transmits the programming in high definition.

Comcast will start slotting HBO on Demand and Cinemax on Demand within systems in Philadelphia, Baltimore and parts of New England and New Jersey.

Comcast will start distributing HBO’s high-definition channel this fall. Called HBO HD, the service offers about 75% of the network’s programming in high def.