For the cable industry, adding high-definition TV is no longer just a matter of cost versus building revenue. Networks now accept the next economic plus of HD: It's a profitable public relations move.
By stepping up their HD programming, cable nets are improving their relationships with viewers who hunger for the new technology, and the operator partners who seek a leg up in the war with satellite and the telcos. All of that increases the bottom line.
“Consumers want to watch HD content, and distributors recognize that HD consumers are great consumers to have,” says Clint Stinchcomb, executive VP/general manager, Discovery Emerging Networks Group. “The entire world is transitioning to HD television, and all that's debatable is the time line. It's incumbent upon us to provide the programming.”
HD ratings remain elusive, given what is still a small HD universe. Nielsen combines viewers from the standard channels with their HD simulcasts to tally a network's numbers. But ever-increasing sales of HD sets and the quality of the programming are making for more engaged viewers.
TV companies with standalone HD networks, like Discovery Communications and Cablevision's Rainbow Media division, are increasing their hours of programming. Others like Disney-ABC and MTV Networks are launching HD simulcasts of standard-definition linear networks in the coming months.
“We've gone into high gear here,” says Bryan Burns, vice president, Strategic Business Planning and Development for ESPN. The network increased its HD event coverage from 600 to 840, from 2006 to 2007. New HD events this year ranged from the winter and summer X Games, to NASCAR's in-car camera views.
ESPN has concrete evidence that sports fans prefer HD. According to set-top research ESPN has been conducting through TNS Media Intelligence on Charter cable subscribers in Los Angeles, ratings on a total-day basis for ESPN's HD channels are 22% higher than ratings for the standard-def ESPN channels.
ESPN is hardly alone in adding content. Discovery's HD Theater recently ran the Discovery Channel's ratings-shattering Planet Earth series. MHD, MTV Networks' high-def channel, has added movies, new music franchises and more concerts to its lineup, according to VH1 chief Tom Calderone, who oversees the network.
National Geographic's NHD, a simulcast of its SD channel, ran 300 hours of original high-def programming this year, including Inside the Living Body, which featured the highest-resolution footage ever shot inside a living organism. And PBS, which plans to transition its entire schedule to HD by 2009, had 372 new HD hours last year and will add new high-def episodes of The NewsHour and Antiques Roadshow next year.
At the head of the pack in high-def breadth is Rainbow's suite of 15 Voom HD channels. The company plans 55 new series shot in 65 countries around the world in the next year, with subjects ranging from rogue simian robbers in India (Monkey Thieves) to South Pacific beauty bars (Spa Seekers).
“We're using high-definition and the intimacy, the power, the ability it has to fascinate people with the pictures and sound it can delivery by giving people this incredible window on the world,” says Voom General Manager Greg Moyer.
In addition to building out standalone HD channels with new content, TV networks are rapidly launching simulcast high-def channels of their SD feeds. It's the right move for the transition: As more viewers go HD, they get their favorite standard-definition channels offered in high-def simulcast.
“We certainly had an initiative to drive [our high-definition standalone channel] Universal HD because as a unique business it's a service out there that had economics against it, but what drives it into simulcasts was 100% the customers,” says Bridget Baker, president of NBC Universal Television Networks Distribution.
The company recently launched simulcasts of USA, Sci Fi, CNBC and Bravo. These channels join new simulcasts from Discovery, and MTV Networks planned in the coming months. At ABC Disney, ABC Family, Disney Channel and Toon Disney launch simulcast channels in March.
“What we're doing now is really getting on board in advance of what the country's going to experience,” says ESPN's Burns about broadcasting's rapidly approaching Feb. 17, 2009 digital transition deadline. “Television is not going to be a 4x3 world anymore” and the broadcast conversion should cause an industry-wide boom in HD.
Cable networks, which make money from both advertising revenue and affiliate fees, have additional incentive to help the operators build the packages they offer customers. More HD channels means they can negotiate better fees from the operators.
“There's really an arms race going on between cable, and satellite and telco providers over who's providing the most HD, and probably the only way a distributor can really differentiate itself in video today is by embracing high-definition one way or another,” says Voom's Moyer. “Satellite and cable operators can use HD to retain customers in the face of greater competition.”
Plus, HD is good business for the networks themselves; while executives say they cannot charge extra for high-definition ads, they can lure new advertisers and increase business with existing ones through the promise of delivering highly engaged viewers. And HD simulcasts also help networks build audiences to sell those advertisers.
“HD viewers are an affluent, educated demographic,” says Steven Schiffman, National Geographic's acting general manager. “They are the ones driving HD sets and HD hookups with cable operators.”