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In Demand goes beyond Pay-per-view

'Howard TV' a hot sell for changing co.

Not many companies go from humdrum to jazzed-up without breaking a sweat.

In Demand was the definition of humdrum a few years ago, chugging away as little more than a transmission belt funneling pay-per-view movies and events to cable systems around the country. It even operated under a different name: Viewer’s Choice.

Fast-forward to 2006, and guess which company records Howard Stern’s Sirius radio show for five hours every weekday morning and spends the next 36 hours editing it down into a 60-minutes-or-so subscription video-on-demand program for digital-TV customers.

Yup, it’s In Demand, and the daily “Howard TV” is only one of a number of original shows that are pumping adrenaline into the company.

Earlier this month Rob Jacobson, prexy-CEO of In Demand Networks, put forward the biggest original-programming blowout in the company’s 20-year history, a series of nine nonfiction primetime shows under the umbrella title Mojo.

The series, which start premiering June 18, range from “Doctor Danger,” with Bob Arnott, the physician and NBC newsman, as major domo of an adventure travel show, to “Technical Difficulties,” a scavenger-hunt competition featuring tech-savvy rivals.

The filmmakers will produce these shows in high-def, targeting them to an upscale, young-male demo. In Demand then will slot them on INHD, one of the two high-def 24/7 channels the company distributes to cable systems in the U.S. and Canada. The two HD networks program movies, sports, music concerts and other events.

“The potent growth engine of this company is production,” says Jacobson.

He adds In Demand turns a profit for its three cable-operator owners: Comcast, Time Warner Cable and Cox Communications. But he declines to go into detail; the owners don’t break out In Demand’s numbers on their balance sheets.

In Demand collects fees on the movies, sports and events it distributes via PPV to 1,800 cable systems. For a new movie, In Demand pockets, on average, about 10% of every dollar ponied up by a PPV subscriber. (In general, the remaining 90% is split evenly between the major studio and the cable operator.)

But Stern is about as raunchy as In Demand gets: The network does not distribute porno movies, fearing a backlash that could turn some Washington politicos against Comcast and TW, which are delicately concluding their deal to jointly take over Adelphia Communications (with its 5.2 million subscribers).

(In Demand may not distribute them, but Comcast and TW both carry porn channels on their systems, an offering that drives more pure profit into their coffers than any other content.)

Because it’s owned by cable companies, In Demand has had to fend off its share of slings and arrows.

Last year, DirecTV, cable’s biggest competitor, banged on the door of the Federal Communications Commission, claiming In Demand was insisting on outrageous prices for its two high-def channels. By making the terms so exorbitant, In Demand is all but guaranteeing that DirecTV will have to say no to INHD and INHD2, according to the complaint. The result: The two networks remain exclusive to cable, by default.

In Demand replied that its fees are pegged to the number of digital subscribers owned by the potential buyer. On that basis, DirecTV is at a big disadvantage because all its subscribers are digital, compared to fewer than 40% of a cable system’s customers, on average.

A DirecTV spokesman says the company withdrew the FCC complaint on April 10 after In Demand agreed to negotiate a more reasonable rate.

But it all ended with a whimper: DirecTV decided not to buy INHD and INHD2, even at a lower rate.

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