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For Cable, High-Def Is a Question Of Time And Space - Broadcasting & Cable

For Cable, High-Def Is a Question Of Time And Space

Not to mention, spending the money to make the switch
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The Consumer Electronics Association maintains that, by the end of 2007, half of all U.S. homes will have HDTV—and cable networks are getting ready for this change. But as of now, there are still only about 13 million HD-ready households, and probably fewer than half of them are getting actual high-def.

Cable operators and HD networks are partnering with retailers to push along the deployment of the medium. Discovery Networks, for example, set up a promo along with Time Warner in 130 Circuit City stores last year, where they touted the beauty of HD.

But education is also a factor. Studies show customers wait an average of four months after buying HD sets before installing a cable or satellite set-top box that facilitates the HD picture. The cable industry wants to narrow that gap.

YES Network is doing its part. The channel will feature 70 New York Yankees games in HD this year. And other cable networks are considering spinning off networks devoted to the medium.

Nielsen Media Research does not yet measure HD networks’ audience size, so there is no HD advertising model. But operators are still hungry for the moneyed audience an HD network most assuredly attracts. Plus, advertisers know their products will look all the more alluring in high-def.

“When you consider the evolution of TV, from cable to satellite to DVD and now HD, we’re clearly on an unrelenting quest for picture quality that most closely resembles reality,” says Clint Stinchcomb, SVP/GM of Discovery HD Theater and VOD.

But a pretty picture is worth a thousand headaches, and there are significant challenges for those trying to launch an HD network: time, carriage and cost.

TIME:

“For us, it’s a matter of when we go [to HD], not if,” says National Geographic President Laureen Ong.

The network, which is rapidly building its audience base (it is currently at 53 million), is also stocking its HD library and has its Washington studio HD-ready, waiting until it gains critical mass to launch an HD network. Ong estimates that is a year or two away.

Its viewers are definitely HD-hungry: According to the 2004 Beta Research Survey of Cable Subscribers, National Geographic is the network most frequently cited as important to adults interested in HDTV.

“Anything new we commission now, we look at its HD component first,” Ong says. “In our particular category of programming, building a library makes all the sense in the world.”

The Scripps cable networks shoot nearly 20% of their programming in HD and hope to launch their own HD network in first quarter 2006. Rumors in the HD community abound that MTV and CNN are among networks ready to flip the switch.

CARRIAGE:

For some, the challenge to surmount is carriage, as they work to persuade space-strapped operators to squeeze them in when bandwidth is limited. Early players like Discovery HD Theater, which launched in June 2002—when there were just five other networks broadcasting in HD—have inked deals with most cable and satellite operators and have a secure place in the cable universe.

But as time passes and bandwidth is taken up by new digital channels, on-demand networks, broadband offerings and at least 23 national networks offering part or all of the day in HD, it is tougher to carve out a space for a new HD network.

“That’s what happens when you’re late to the party,” says Discovery’s Stinchcomb.

ESPN HD, for example, launched years ago, and ESPN2 HD premiered in January 2005. The former has deals with all the major cable companies, as well as DirecTV and Dish. The latter, however, was a little late to the party and is still in negotiations with most of the major cable companies. It has deals with Adelphia and DirecTV, but DirecTV has yet to launch the channel in many of its households.

COST:

Launching an HD channel is an expensive and arduous process. There exists no library of high-definition content to license, so networks need to hire a staff to convert standard programming or start from scratch in building libraries of their own. Stinchcomb estimates the cost of shooting in HD to be 10%-15% higher than shooting in standard-definition.

That isn’t pennies. ESPN, which relies heavily on HD for live programming, also sends anywhere from 50 to 100 people to off-site shoots for events and uses extra equipment to shoot and transmit HD coverage.

“It’s not for the faint of heart,” says Bryan Burns, VP, strategic planning and business development, at ESPN. “Getting into this business in the early stages, we still use a lot of equipment with serial number 0001 on it. Any time you start like that, you travel at your own risk. People here have embraced it, but it takes so much extra effort.”

Still, HD viewers are a vocal bunch when it comes to telling networks and operators when they want their HDTV. ESPN, for one, has responded to the call by expanding from the 100 major events each network had promised to air in HD at their launches to airing 400 events, between its two offerings, in 2005.

That is 100 more than what the company predicted in January and is in addition to the more than 2,000 HD programs shown on the two sports networks.

Increased HD event coverage will include the National Hot Rod Association every weekend on ESPN2 HD starting in June, every game of the Men’s and Women’s College World Series across the two channels, and Major League baseball most Wednesdays this summer on ESPN2 HD.

“Off the chart comes to mind,” says ESPN’s Burns, in describing consumer reaction to the HD networks. “We get a lot of letters and calls. You don’t need to go out and buy a new set when you buy premium services, but when you lay down $3,000 for an HDTV set, you’re demanding about what you want.”

The ESPN Digital Center, the network’s 120,000-square-foot Bristol, Conn., facility, is 75% outfitted to accommodate HD—including three HDTV studios. SportsCenter moved in and began shooting in HD over the summer; NFL programming joined the HD lineup in September.

The next steps in HD will be programming wraps that lead into and out of games and producing more of the network’s original entertainment series in HD. Tilt and Playmakers are already shot in HD, as was 3, the network’s latest movie.

“Every one of these things takes retraining a workforce exponentially higher and deeper,” Burns says. “But we want to get around every corner of the company to spearhead the transition from analog to take HDTV into the next 50 years.”

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