Profit’s No Motive for HDTV Rollouts

Author:
Publish date:

Several top MSO, programming and ad-agency officials last week said they view HDTV as a cost of doing business — not as a big potential profit center.

“Specific profitability, I think, is lost in the long term,” said Fred Dressler, Time Warner Cable’s executive vice president of programming. “Everybody in the beginning was looking for a way to profit from this thing. … There really isn’t a revenue stream.”

Dressler made his remarks during a Cable & Telecommunications Association for Marketing of New York panel titled “Leveraging HDTV: Putting Profit in the Picture.” And most of Dressler’s fellow panelists agreed with him that HDTV, while an eventual necessity likened to the transition from black and white to color TV, wasn’t a likely future gold mine for either distributors or cable networks.

Both Dressler and Mike Rahimi, senior vice president of marketing for Mediacom Communications Corp., said they’ve never actually paid a broadcaster for HDTV content. In fact, Dressler described Emmis Broadcasting Corp.’s efforts to get cash for its stations’ HDTV signals as “greed.”

He also brought up NBC’s attempts to get MSOs to foot some of the bill for offering Olympic coverage in HDTV.

“NBC came to cable operators and said, 'You want to carry the Olympics in high-def?’ ” Dressler told attendees. “We said sure, and they said, 'Pay us.’ They said, 'We can’t afford to do it if you don’t pay us.’ And we said well, we’re not going to pay for it, and they said, “OK, no high-def.’ The next thing you know, they’re doing it in high-def. And you say, wait, who’s paying for it? Not cable operators.”

Panelist Dennis Quinn, executive vice president of business development for Turner Broadcasting, told the overflow crowd of CTAM attendees that consumers expect a top cable network like Turner Network Television — which holds high-profile sports rights to program the National Association for Stock Car Auto Racing and National Basketball Association — to offer HDTV.

Turner just launched a standalone service, TNT HD. “It’s strategic real estate,” Quinn said.

He recalled that when TNT was negotiating recently with Steven Spielberg about a new miniseries, one of the director’s first questions was whether it would be shot in HDTV.

“It is the price of being a leader long-term,” Quinn said.

On the agency side, panelist Tim Hanlon, senior vice president at Starcom MediaVest Group, argued that typically, producing HDTV programming is not that much more costly than standard-definition fare.

Of HD overall, Hanlon said, “From an advertising and marketing perspective, it’s a cost of business going forward.”

Related