Cuban: Major Media Cos. Not Pushing HDTV1/27/2004 9:45 AM Eastern
Las Vegas -- HDTV is just a "loss-leader" for the major media conglomerates, which is why they are dragging their feet in terms of entering that arena, HDNet founder and chief Mark Cuban told small cable operators here Tuesday.
"You are actually seeing a lot of major media companies trying to hold back and not push forward on high-definition," Cuban said, citing factors like the high cost of converting programming to HDTV.
"I’m not expecting all of a sudden, 150 cable networks to rush to HD over the next two, three, four or even five years," he added. "If you saw the deal that Viacom [Inc.] did with Comcast [Corp.], the only mention of HD was for CBS so they could get the Super Bowl -- [MTV: Music Television], Spike TV, no mention of HD at all."
Cuban made his remarks during the Winter Educational Conference being held here by the National Cable Television Cooperative, which has a master affiliation deal for both Cuban’s HDNet and HDNet Movies.
During the session, Cuban said there are a variety of reasons why major giants with cable-programming services -- citing the example of Viacom, for one -- have a vested interest in HDTV not advancing quickly across the country.
For one, in some cases, the major media giants have programming libraries with content that is just on tape, which is not readily converted to HDTV.
"Anything and everything that is shot on tape … basically becomes worthless in a high-definition universe," Cuban said. "What that means is you can look at the library valuations of some of these major media companies and, if they immediately go to all-high-def, the value of those libraries is devalued considerably, which is one of the key reasons why -- you wonder why aren’t some of these cable networks in particular going to HD? This is one of the key reasons."
The cost of converting shows to HDTV is also high -- another barrier, Cuban said.
"For a USA Network or whomever, it adds up to millions and millions and tens of millions of dollars," he added. "For these companies that are public, [cable operators] are not paying them twice for the same content. So as a result, it’s just a loss-leader for them, and they are not ready to take on the expense, in most cases."
He also noted that in some cases, cable networks don’t have the HDTV rights to shows they are airing, which is another barrier for those programmers. For example, while USA airs Nash Bridges, it does not own the HDTV rights to that show, according to Cuban. He added that one of his companies holds the HDTV rights to Nash.
"I would sell it to [USA], but they’re going to have to pay for the conversion costs and they’re going to have to pay for the rights," Cuban said. "That’s just one show. Take that across an entire schedule, and you can see that there is an issue for a lot of cable networks."
In fact, Cuban said, the "issues" the media behemoths have regarding HDTV are the reason he saw an opportunity to launch his own 24-hour HDTV networks with original content.
In another vein, Cuban was asked what he thought about local broadcasters asking MSOs to pay them for their HDTV signals, and he said that ultimately, cable operators have the upper hand in that negotiation.
"You can wait them out," he added. "They need you as much as you need them … I think the leverage is with the MSO."
Attendance at the NCTC’s two-day conference, which ended Tuesday, was 319, up from 248 last year.