Programmers Ramp Up To Meet HD Demand
End of Standard-Resolution TV Is In Sight for Producers, Networks
By Wayne Karrfalt -- Multichannel News, 2/25/2007 7:00:00 PM
When satellite provider DirecTV announced at last month’s International Consumer Electronics Show that it would use the additional capacity provided by the planned launch of two new satellites to carry 100 national high-definition channels by the end of the year, some high-resolution light was shed on issues that had taken a back seat in recent months.
The multiplatform craze has distracted distributors and programmers from tackling real issues that remain in the HDTV space: capacity, programming and price. But DirecTV’s move has made high-definition the topic du jour once again, and could force the industry to deal with these problems sooner rather than later, analysts said.
Some skeptics said DirecTV’s announcement is premature and overstated. Many cable networks aren’t ready to launch in HD yet, and DirecTV’s current offering — seven national channels and two premium services — pales in comparison to many cable HD lineups. Time Warner Cable actually sued the satellite provider over the language in its ads, claiming DirecTV lied about offering picture quality that is superior to cable and forcing it to amend its TV spots. (“Time Warner Battles 'Future’ Ad,” Feb. 12, 2007, page 4).
FORWARD PROGRESS
Nor is the cable industry standing still. Comcast is adding more linear HD channels to its lineup this year, including National Geographic HD, A&E HD and content from its owned networks, Versus and Golf Channel. It also plans to double the amount of HD content available on its video-on-demand platform to over 200 hours this year.
But the fact remains that satellite could dominate in the HD space until cable operators figure out a way to increase network capacity. Solutions such as reclaiming analog spectrum; deploying switched digital video, in which only the channels customers are watching are passed to their set-top boxes; or migrating to boxes that use the MPEG-4 standard are at least two to three years away.
“There are two different wars being fought, the battle of product, who has the best offering; and the battle of marketing, who has the best sales pitch to the customer. DirecTV is almost certainly going to win the marketing-pitch war by being able to claim they have more HD channels than everyone else, and they’re already building awareness,” said Sanford C. Bernstein senior analyst Craig Moffett.
Meanwhile former “cable cowboy” John Malone, awaiting approval of Liberty Media’s $11 billion acquisition of DirecTV, has tipped his hat that HD will be his main focus going forward.
“This year we plan to put a lot of distance between us and the cable guys and we will primarily be able to do that with HD,” said DirecTV spokesman Robert Mercer.
Until now, high prices and a lack of compelling high-definition programming has slowed adoption in all but the richest homes. (HDTV owners have a mean household income of $89,500, according to a recent Leichtman Research survey). But the paradigm is shifting. Set prices dropped substantially over the holiday buying season. The average price for an HDTV set is expected to fall to $800 this year, according to the Consumer Electronics Association.
And research shows consumer education is also improving. Both developments have led distributors to broaden their HD offerings and cable networks to accelerate their plans to jump to HD.
DirecTV is also using sports as an HD hook. Last season it broadcast 150 National Football League games in HD as part of its “NFL Sunday Ticket” package. “NASCAR HotPass” subscribers with high-definition set-tops can pay $99 for a subscription to see 37 races this year, including multiple HD camera views on a single screen and cameras placed inside the cars of five different drivers each week.
DirecTV took cable programmers by surprise in terms of the announcement’s timing, but executives said they were already moving in this direction. Turner Broadcasting System was the first to go on record about a new HD channel, announcing that CNN HD will be ready from September, followed sometime thereafter by TBS HD and Cartoon Network HD.
Much internal debate has preceded the order of the launches, said Turner Network Sales executive vice president of sales and marketing Coleman Breland, as each channel in the Turner family makes a compelling case to be offered in HD. But given capacity constraints, the market can only support so many new channels at one time.
“The strategy for us, in terms of HD, is to launch the right network at the right time. Given its presence, position and programming, TNT made sense at first. CNN, given its competition with broadcast news, will be next. When you have a family you want everyone to be able to play in this space, but ultimately it’s a capacity issue,” said Breland.
NBC Universal is preparing to launch HD versions of Sci Fi Channel, USA Network and Bravo later this year.
“We’re already in mode,” said USA Network and Sci Fi Channel president Bonnie Hammer.
NBCU’s HD strategy has evolved from trying to launch Bravo HD Plus as a standalone in July 2003 to offering the catch-all Universal HD from December 2004, which airs programming from across the NBCU spectrum. Like most HD networks, the NBCU channels will offer a combination of originals and acquired fare shot both in HD and upconverted from film.
EXPERIMENTAL STAGE
“Much of our content is still shot in film, but we’re experimenting with [HD] more and more,” said Hammer. “We’re even trying to shoot [World Wrestling Entertainment] in HD. That’s kind of challenging. Does a punch hit or does it just go by? You see everything in HD. You’ve got to be very careful.”
However, upconverting is not ideal in terms of image quality, according to Greg Moyer, GM of Rainbow Media’s Voom HD Networks. In Moyer’s view, the next wave of HD networks about to launch will do so as “placeholders” until programmers convert all of their production apparatus to the format.
Conspicuously absent from the DirecTV announcement, and still only distributed in the U.S. via EchoStar Communications’s Dish Network, Voom is sticking to its strategy of expanding its slate of original HD programming to differentiate itself in the marketplace.
“At some point, television will be all-HD, and this is the beginning of that,” said Moyer. “Channels that commit to broadcasting in 100% HD will be a reliable place for the viewer to turn, whereas the other networks will be catch as catch can.”
Channels that have fully committed to producing and broadcasting in HD, such as Voom’s 15 networks, HDNet, Discovery HD Theater and Nat Geo HD, are hoping their head start in terms of programming libraries and consumer loyalty will pay dividends as penetration deepens.
Like DirecTV, ESPN HD is using the format to enhance its coverage of NASCAR races, which return to the network this year after a six-year hiatus. Camera crews are experimenting with multiple point-of-view cameras, robotic cameras and cameras placed inside the cars. The medium has had as much impact on the coverage of sports since the advent of color, said ESPN executive vice president of programming and production Norby Williamson.
“You can look at movies or studio presentations in HD, but the impact of HD is by far and away the greatest on sports television,” said Williamson.
The pioneer in the space, HDNet, continues to invest in original true-HD programming. The weekly investigative news show Dan Rather Reports, which premiered last October, has lent an air of credibility to the network, whose message until now was mostly about the format. HD will soon create a new digital divide in which standard-definition feeds take a back seat to high-definition channels, according to HDNet president and co-founder Mark Cuban.
“I think we will see HD vs. non-HD programming be like FM versus AM. By default, we all go to the FM band and look for music programming, and AM has become the domain for niche and talk/sports stations. Viewers now check the HD range of channels first.
“It still comes down to having great programming or movies, but being part of the 'first 15’ that viewers browse is a huge advantage for us,” Cuban wrote in an e-mail.
Discovery HD Theater is also raising the bar by investing in high-profile original HD fare, such as the ongoing $65 million series Atlas and the 11-hour epic Planet Earth, airing simultaneously in standard and HDTV on consecutive Sundays from March 25 to April 22. Despite being in only 8 million homes, the network is willing to invest in programming that takes advantage of the medium precisely because HD converts go here first, a point not lost on its distributors, said Discovery Communications executive vice president and general manager of HDTV and new-media operations Clint Stinchcomb.
“Studies have shown that once a consumer has committed to HD by buying the HD set and upgrading to an HD set-top box, they will go out of their way to watch programming in HD only,” said Stinchcomb. “And distributors realize that every time someone buys a set, it allows them to reevaluate their video distribution relationship. Therefore, a compelling HD offer is more crucial than ever.”
BACK BURNER FOR SOME
But not every programmer is bullish on HD. Networks that tend to focus more on, say, reality shows spend much less on programming in general and don’t see the benefits of conversion. The consensus is they will have to make the jump eventually, but right now it’s not a priority.
“Long-term, absolutely,” said E! Networks CEO Ted Harbert. “We already produce the [Live from the] Red Carpet show in HD and put it up on-demand. G4 and Style have a lot of programming that would look good in HD. But not right away.”
Program suppliers are also seeing increased demand for HD programming, and market forces are helping them deliver the goods. Networks that have already committed to the format, such as Discovery Channel and HGTV, ask for budgets to be delivered with both standard and high-definition bottom lines.
National Geographic Channel has mandated as far back as February 2005 that all programs must be shot in HD, despite the higher cost. The Fox Cable Networks/National Geographic Society joint venture felt the brand demanded it. The production team of the three-hour special Galápagos, premiering in March, shot some 300 hours of footage.
“Over time, people have learned not to bring us anything unless it’s in HD,” said Nat Geo executive vice president of programming John Ford.
OVERSEAS MOMENTUM
International productions and co-productions are also shifting to HD in order to be able to sell to the U.S. Discovery’s Planet Earth series, a co-production with the BBC, became the British broadcaster’s first foray into the medium when it began production five years ago. The project is as ambitious as anything ever attempted by the channel, with over 2,000 days in the field in more than 200 locations. And despite the fact the network won’t “get credit” for the viewers who tune in to watch in HD (none of the HD channels are yet rated by Nielsen), it plans many more such productions.
“Every year we should have at least one of these tent pole events. These are the kind of shows we’re embracing now more than ever, and HD is a huge impetus to this, because you’re really seeing everything like you’ve never seen it before,” said Maureen Lemire, executive producer for Discovery Channel.
While economies of scale are lowering prices on high-end cameras and new developments — such as Sony’s introduction of a new, more compact and lighter HD camcorder — are offering alternatives, the format is still expensive, tacking on at least an additional 8% to 10% to the budget. So don’t expect producers to shoot everything in HD just yet.
“Right now, we’re still in what I would call the pick-and-choose era,” said Bruce David Klein, president and executive producer of Atlas Media. “Give them 20 shows and as a cable network, they’re going to select which ones really deserve the HD treatment.”
But on the other hand, the moment when everything must be delivered in high definition is not far off, according to Ellis Entertainment president Stephen Ellis, so producers must prepare themselves.
“The real tipping point is when over 50% of homes start receiving HD signals. Then it will shift very, very quickly,” said Ellis. “We’re not there yet, but as a producer, we’re committed to it long-term. We call it future-proofing our catalogue.”
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