Two years ago, eager HD viewers had little to watch. In late 2002, just four of the six broadcast networks were carrying any HD content. Discovery HD Theater was the only basic cable network to do so, and HBO and Showtime were the lone premium networks. Mark Cuban’s HDNet was the sole HD-only channel.
Today viewers have quite a few additional options. Fox, UPN, ESPN, TNT, Universal HD (formerly Bravo HD), Starz, Encore, Cinemax, the Movie Channel, INHD and INHD2 have all embraced the format in the past two years.
That content explosion is matched by a corresponding rise in HD sets. The Consumer Electronics Association reported that 8 million HDTV sets would be sold this year, doubling the total HD base to 16 million.
While some skeptics still doubt that HD will become mainstream, those first movers are betting that the skeptics are missing the big picture and that HD programming libraries built by early entrants into the field will become extremely valuable-especially considering the advent of HD-DVDs in the coming year.
“Generally you can get more [money] for HD programming, as we have opportunities to repurpose the content for other platforms,” said Judy Pless, senior VP of programming at Showtime.
Warner Bros. learned the new HD economics when it was able to sell HD rights separately for the WB show “Smallville” this year, providing a new revenue stream. Those rights went to HDNet for $100,000 an episode, while ABC Family, with much larger distribution, secured the standard-definition off-network rights for $750,000 an episode, said Garth Ancier, chairman of The WB.
“When [HD shows] hit syndication, the archival value of TV programming is more. It makes more sense to make those shows in HD,” Mr. Ancier said.
It’s too early to tell whether such split-rights deals will take hold on an industrywide basis, but Mark Lazarus, president of Turner Entertainment Group, said he thinks not. “When we acquire or lease [programming], we believe we are leasing the rights for all forms of television,” he said. “It should not be a separate set of rights for HD content.”
In the next two years, HD-DVDs will hit the scene, offering yet another distribution channel for HD content. Clearly, consumers have an appetite for TV shows on DVDs, and that should carry over into HD, said Andy Setos, president of engineering for the Fox Group.
Additionally, over time there simply won’t be any more analog sets sold, said Bryan Burns, VP of strategic business planning and development for ESPN and head of the network’s HD service. Even now, the analog sets at any Best Buy or Circuit City are hidden on the back walls of the store, he said.
The programming itself is changing. During the past year, Discovery HD Theater added HD versions of Discovery Channel’s most popular shows, “Monster Garage” and “American Chopper.”
“It’s highly beneficial for our distribution partners to have recognizable series. Three and a half million people tune in to watch `American Chopper’ every Monday night, and we let them know it’s also available on Discovery HD Theater,” said Clint Stinchcomb, senior VP and general manager for Discovery HD Theater and VOD.
Those brand-name shows complement the network’s originals, including recent additions “Sunrise Earth” and “BBC Performing Arts,” as well as new episodes of signature show “An Inside Look,” an in-depth examination of natural, historical and scientific wonders.
INHD and INHD2 are evolving to include originals now. The pair of all-HD channels from iN Demand offered mostly acquired content when they launched in September 2003.
They now feature some original content such as “Cathedrals of the Game,” which profiles baseball parks, and “Reel Look,” covering movie premieres. “The novelty of hi-def is going to go away. We have to create something with lasting value,” said David Asch, senior VP of programming for INHD.