Another View: HITS Sports Tier Has Limitless Potential

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Tele-Communications Inc.'s recently announced sportspay-per-view tier may not quite measure up to DirecTV Inc.'s PPV-sports offerings, butit's a start.

The new, eight-channel Headend in the Sky platform is theclosest thing that the industry has to matching the very popular and attractivedirect-broadcast satellite multichannel lineup of National Basketball Association,National Football League, Major League Baseball and National Hockey League out-of-marketgames.

The HITS tier will offer ESPN's college football, collegebasketball and Major League Soccer PPV packages, as well as a sports barker channel totell subscribers what's coming on each channel and how much it costs.

The barker will also keep information-hungry sports fansup-to-date with a feed directly from ESPN's online site.

Of course, TCI and other cable operators are hoping thatthe tier will eventually entice the professional leagues to distribute their games tocable.

With the multichannel-digital-PPV sports tier, the leagues'argument that cable lacks a uniform PPV platform with enough channels to offer as many aseight games per day is now rendered mute.

Also, with only 1.5 million subscribers currently deployingHITS, the tier has fewer subscribers than DirecTV, and it poses little threat to nationaland local broadcast-network ratings.

But the tier's greatest revenue and competitive potentialmay not lie in its ability to challenge DBS for professional-league packages. Rather, itsability to offer exclusive and unique sports programming may prove to be the tier's mostattractive calling card for operators.

The tier will feature a stand-alone PPV channel, on whichESPN will initially offer live international events, as well as archival programming, on aPPV basis. A European soccer tournament or the X Games' greatest hits will undoubtedlydraw decent buy-rates.

But the greater opportunity may be to find new andinnovative PPV-sports programming that could be exclusive to HITS.

There's no reason why ESPN -- or an outside PPV-eventdistributor -- couldn't access those channels to create and build sports events that woulddefine digital PPV, much like the pro league out-of-market packages have helped tocharacterize DirecTV.

ESPN, for example, could offer its X Games on aTripleCast-like basis, with three or four channels covering each event live and in itsentirety to complement the network's basic-cable coverage.

Or Showtime and TVKO could generate additional PPV revenuesfor their boxing shows by offering next-day PPV replays of big Oscar De La Hoya or EvanderHolyfield fights, complete with different camera angles so that viewers can choose whichangle to view the big knockout punch from.

The revenue and image potential for PPV sports is limitlessif the industry is willing to take a few risks and experiment with different ideas.

DirecTV took full advantage of its channel capacity tobuild awareness for its PPV business, which helped to sell dishes. Now it's cable's timeto make the best of its newfound PPV and sports opportunities and to get digital boxesinto the home.

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