Every cable network in Christendom is putting together a 24/7 high-definition clone of itself, which could be bad news for rule-breaking HD pioneer Mark Cuban.
When Cuban launched his HDNet in 2001, the high-def landscape in cable and satellite TV was barren, giving Cuban a leg up in eventually striking carriage deals with DirecTV, Time Warner Cable, EchoStar and Charter Communications, among other distributors of programming services. The deals included a second network, HDNet Movies, which began life in January 2003.
But now the world is starting to catch up with Cuban, because the biggest trend in the TV business is high definition, “and it will continue that way into the foreseeable future,” says Derek Chang, executive VP of strategy and development for DirecTV.
DirecTV is one of the companies leading the charge, pledging that it will ramp up the category big time, from about a dozen HD channels to at least 100 by the end of the year, ranging from HD versions of A&E and National Geographic to Sci Fi Channel and Food Network.
Since these HD channels will be alter egos of their standard-definition parents, most of them won’t charge any extra license fees to DirecTV. Equally, subscribers won’t pay any additional monthly fees to DirecTV for these duplicate networks, except for the cost of renting the HD digital box.
Although they’re leaving cash license fees on the table, these networks still come out ahead because they’ll get two separate dial positions on DirecTV’s lineup, which could draw more viewers and boost the value of the advertising spots.
In contrast to the free carriage of HD duplicates, Cuban charges his cable/satellite clients a stiff monthly fee of $1.37 a subscriber for HDNet and HDNet Movies, which could tempt DirecTV and his other clients to say no when the license-fee contract comes up for renewal.
The argument Cuban plans to make if his services become threatened with the guillotine is that “many of the simulcast networks don’t have any content shot in high-def formats,” he says.
Cuban calls the programming on some of these networks “faux HD,” loaded with “upconverted content” that will make HD viewers “feel like they are getting ripped off.”
But some of Cuban’s clients say HDNet is pricey for a nondescript program service that has no definable programming identity. It has news shows (led by an exclusive weekly hourlong magazine reported by Dan Rather), travel shows, live coverage of space shuttles, music concerts, and reruns of series from the broadcast networks, both relatively recent (“Smallville,” “Arrested Development”) and not-so-golden oldies (“Charlie’s Angels,” “Hogan’s Heroes”).
The theatricals on HDNet Movies may look great in high def, but a vast majority of them have played umpteen times on broadcast and cable. The titles go back as far as the 1957 “Wings of Eagles,” with John Wayne, and range through “Taxi Driver” (1976), “Starman” (1984), “Full Metal Jacket” (1989), “The Hunt for Red October” (1990) and “The Bridges of Madison County” (1995).
But Phillip Swann, president and publisher of TVPredictions.com, says Cuban may ride out the criticism and stay in business because “the industry is heading into an arms race between cable and satellite about who can offer the most HD programming.”
“I think it would be a big risk for DirecTV to drop HD Net,” Swann says. “It would look like a step back, and detract from the message DirecTV wants to deliver, which is all about adding HD channels to feed the appetite of the 30-plus-million homes with HD sets.”
And Cuban says his price is high because HDNet and HDNet Movies mostly reside on tiers that cost subscribers extra monthly fees. And Cuban’s prices are much cheaper when cable ops move his webs from a tier to HD Basic, where all subscribers with HD hookups can watch it.
The accelerating push to HD Basic will only ramp up subscriber demand for high def; Cuban is convinced that he’ll be able to carve out a lucrative niche for his two services.
The high-def arms race could also end up giving new life to the Cablevision-owned Voom series of 15 HD networks. Only EchoStar, which helps to fund Voom in exchange for a financial stake, and Cablevision carry the suite of networks; it’s an all-15-or-nothing proposition.
But new technology will make it easier for cable operators to accommodate the whole enchilada, says Greg Moyer, general manager of the Voom HD Networks.
Each of the Voom networks focuses on a specific niche, from extreme sports and exotic travel to art galleries and live auctions.
Voom even has a horror-movie channel called Monsters HD, which features everything from “Friday the 13th” and “Nightmare on Elm Street” to “Frankenstein” and “Godzilla.”
Monsters HD plans to schedule the scariest movies it can find, oblivious to the fact that a viewer who dies of fright is a lost customer.