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Mar 16, 2004  •  Post A Comment

U.S. Digital TV Unveils Digital Subscription Channel

So-called “cable-nevers” now have a way to access some of cable’s most popular networks without compromising their stance against cable and satellite.

U.S. Digital Television Tuesday unveiled its nationwide over-the-air digital subscription cable channel service that combines local digital broadcast signals with several popular cable networks such as ESPN, TLC and Discovery Channel in a package that starts at $19.95 a month.

As part of its national launch, USDTV said it was partnering with retail giant Wal-Mart to sell USDTV set-top boxes for $98.76 each. The company also has an agreement with billionaire Warren Buffet’s consumer electronics chain RC Willey, whose stores are generally west of the Mississippi River.

With a set-top box, subscribers will be able to pick up all of the digital broadcast signals in their local market and have access to cable networks Fox News Channel, ESPN, ESPN2, Disney Channel, Toon Disney, Lifetime, Lifetime Movie Network, Discovery Channel, HGTV and Food Network. As a premium service, USDTV is also offering movie channel Starz! to subscribers willing to pay extra. Subscribers can also purchase for less than $30 a special 22-inch antenna that can be mounted to a television set and has the reception capability of a 6-foot-tall roof mounted antenna.

USDTV officials said they have a two-pronged marketing approach for the service, which they expect to roll out into 30 cities by the end of the year. First is to target “cable-nevers,” or customers who refuse to subscribe to cable or satellite services but might have an interest in some cable programming if it were offered at cheaper price. The other target is consumers who are fed up with rising rates at their cable provider.

“This is a era in the way that consumers receive television,” said Steven Lindsley, USDTV’s chairman and CEO. “Consumers are increasingly frustrated that they are not getting additional value with all the cable price increases they are seeing.”

Already, USDTV has 1,000 subscribers in Salt Lake City, where the service was first introduced three months ago. On Tuesday USDTV rolled out the service in Albuquerque, N.M., and is planning to offer it in Las Vegas in time for the National Association of Television Executives conference next month. The company hopes to have 5 million subscribers within four years.

Separately, USDTV said it secured another round of financing to help pay for its national expansion, including a $60 million commitment from Chinese plasma and liquid-crystal display television manufacturer Hisense to produce 400,000 set-top boxes and jointly develop plasma and LCD televisions with USDTV technology built into the units. USDTV also secured $8.5 million in private equity funding from NexGen Investments and Stonebridge Capital, with a commitment to provide another $12 million if the company meets certain targets.

MGM Stock Soars on Dividend Rumors: Shares in film and television production company MGM surged 12 percent Tuesday as the market reacted to press reports that the company is planning to pay shareholders a special dividend as a way to spread the company’s wealth among shareholders.

MGM shares closed at $18.05 Tuesday on a day in which shares traded hands at 10 times the three-month average volume in anticipation of MGM paying a special dividend of between $6 and $9 a share as soon as next month.

In response to the market buying up MGM shares, the company issued a statement confirming that it is exploring its options.

“As we have indicated in the past, our management remains committed to sharing the company’s wealth with our shareholders,” said MGM Chairman and CEO Alex Yemenidjian. “In addition to the programs we have considered in the past, which have included our recent tender offer and our open market stock repurchase program, we also are exploring other alternatives, such as whether to recommend to our board a significant one-time dividend distribution to all our shareholders.”

Mr. Yemenidjian said the company has not decided when such a payout might occur or how large it would be, and he hedged about whether he would make a recommendation to the board.

Three Executives Promoted at Showtime: Showtime Networks President of Entertainment Robert Greenblatt announced the promotion of three executives within the programming department on Tuesday.

Danielle Gelber has been promoted to senior VP of original programming, Gary Garfinkle to senior VP of film acquisitions and Sara Fischer to senior VP of production. All three will continue to work out of the company’s Los Angeles office.

Ms. Gelber, previously VP of original programming for Showtime, is currently the creative executive on “The L Word.” She will also work as the creative executive for the network’s new drama series “Huff,” which is due to premiere in the fourth quarter of 2004. Ms. Gelber joined Showtime as VP of original programming in 2002 and spent the eight years before that working for the Fox Broadcasting Co. as the senior VP of drama series programming.

In his new role Mr. Garfinkle will be responsible for film acquisitions for Showtime, The Movie Channel, Sundance Channel and Flix. He has served as VP of film acquisitions for Showtime since 1998 and before that was manager of program planning with the network.

Ms. Fischer first joined Showtime in 1997 as VP of production and is currently overseeing production on “The L Word” and “Queer as Folk.” She will continue to be responsible for all aspects of production for the network, from scouting film locations to overseeing on-set production.

TBS Gets “Yes, Dear” Syndication Rights: TBS Superstation and Twentieth Television entered into an agreement for the first-run syndication rights for the ratings hit sitcom, “Yes, Dear.” The multiyear deal calls for TBS Superstation to have a first-run syndication window beginning August 2004, with an exclusive window until September 2004, when local syndication begins.

Herzog Returning to Comedy Central: Doug Herzog’s return to Comedy Central was officially announced today by MTV Networks. Mr. Herzog, now president of USA Network, will rejoin the comedy channel in early May, replacing President Larry Divney, who announced his retirement in January. As expected, Mr. Herzog will be based in the network’s Los Angeles office. Mr. Herzog left Comedy Central in November 1998 to become president of entertainment for Fox Broadcasting. He was named president of USA in March 2001. “Seriously, I couldn’t be more thrilled about Doug coming in to run Comedy Central. He is such an excellent creative leader, colleague and champion of original talent and content, and I know that he will, once again, take the network to a whole new level of success,” said Judy McGrath, MTV Networks group president. “He just has to stop talking about ‘Monk’ and ‘Malcolm in the Middle.'”

Nickelodeon’s The N Gets Ad Support: Nickelodeon’s The N, the nighttime network for kids 12 to 17, will become ad-supported as of May 28. Nickelodeon expects the network to be in more than 41 million homes by the fourth quarter and plans to sell six minutes of ad time per hour. Launched in 2002, The N appears from 6 p.m. to 6 a.m. (ET) and shares a channel with Noggin, the digital network for preschoolers. Noggin will remain commercial-free.

Nickelodeon said it plans to launch more new series during the 2004-05 season than in any other year of its history, including shows featuring Britney Spears’ sister and Julia Roberts’ niece. Nick also said it will air 125 new episodes of returning series during the season. Nick’s new series are “Ned’s Declassified School Survival Guide,” an untitled Jamie Spears project, “Unfabulous,” “The Power Strikers” (working title), “Avatar,” “Go, Diego, Go,” “The Backyardigans,” “Lazy Town” and “Miss Spider’s Sunny Patch Friends.”