Rather Big News from HDNet


Just ask the National Basketball Assn. No one sticks to his guns more than Mark Cuban, the billionaire owner of the Dallas Mavericks, whose strong views about basketball officials have cost him more than $1 million in fines. That's nothing compared to the megamillions Cuban has likely dropped on his other favorite plaything: Five-year old HDNet, which he launched to beam high-definition TV shows and movies.

Never heard of HDNet? You're not alone. The network, carried by more than 40 cable or satellite companies, is seen in less than 4 million of the nation's 112 million TV homes. Cable TV giant Comcast (CMCSA)—in more than 20% of U.S. homes—refuses to carry HDNet, prompting the brash Cuban to tell reporters at a recent press conference to "write some stories that will encourage people to drop them for [satellite operators] DirecTV or Dish."

POWER OF THE IMAGE.Never one to miss an opportunity to make his point, Cuban grabbed the spotlight on July 11 at the Television Critics Assn. tour in Pasadena, Calif., introducing former CBS anchor Dan Rather as the star of an hour-long newscast that HDNet will debut this October.

The pitch from Cuban and Rather (who appeared at the conference as much to defend his rocky last few years at CBS as to promote his new TV show) was simple enough: good, solid reporting, unshackled from corporate oversight, will be a draw. So presumably will be the viscerally vivid high-definition pictures accompanying stories about violent conflicts in places like Baghdad.

"One of the things that TV does best is to take you there—it puts you in Baghdad, puts you in Afghanistan," says Rather of the HD-TV shots he has seen so far. He promises that his show, Dan Rather Reports, will have "hard-edge field reports, investigative reporting.

Rather and Cuban figure quality news, shown with out-of-this-world TV pictures, will mean more subscribers. Perhaps. High-definition TV is the hot new buzzword among cable and satellite TV operators. So far, that's been good for HDNet, which also includes the HDNet Movies channel. Cuban says his subscriber base is growing at 5% to 10% monthly, and that the 15 million or so HD-TV sets in the U.S. will mushroom as folks trade in their clunker analog sets for those that will give them better quality pictures.

But Cuban has plenty of competition. Every TV channel from ESPN to HBO (TWX) and local stations galore offer high-definition channels. In June, EchoStar Communications (DISH) hiked the number of high-definition channels it's offering to 29, adding channels from National Geographic and the National Football League, among others, to its roster of HDNet and other channels.

With all that clutter, the hottest content will lure subscribers first, and that could mean HBO gets the first look and HDNet a later glance, figures Josh Martin, digital media analyst for the iHollywood Forum, which arranges technology conferences. Can HDNet compete? "That's where the rubber meets the road," says Martin.

Getting hot content is no doubt what prompted Cuban to take a shot on the 74-year-old Rather. Cuban has been collecting as much ammunition in the way of content as possible to build HDNet into a contender. Not unlike his bold bids in basketball to sign high-priced free agents, Cuban spent heartily to outfit crews in 65 countries with state-of-the-art high-definition cameras to capture key events including Pope John Paul II's funeral in high-definition. He signed up pro hockey, pro soccer, and NASCAR races, along with some hot TV shows like HBO's Deadwood. There have been U2 specials, and he's launched a movie production company to make high-def films like the documentary Enron: The Smartest Guys in the Room, and Good Night and Good Luck, starring George Clooney.

RATHER HOT?Rather clearly fits into that category: a headline-grabbing act who may not appeal to everyone (indeed, his ratings as the CBS anchor were nearly in free-fall during his last few years). If Cuban is right, he will appeal to enough news junkies to lure a few more to buy an HDNet subscription. "You offer a little here, a little there, and people start to say, 'hey, I heard about that, I want it,' " says Cuban. And by flooding his own network with high-definition news footage from around the world, says Cuban, he is collecting archival footage of key events that no one else will have. He recently signed, for instance, a five-year deal with NASA for the exclusive high-definition rights to film shuttle launches through 2010.

But is Dan Rather enough of a headliner? At his press conference, Rather looked like a shadow of his former self, getting misty-eyed and even briefly choking up when he talked about his CBS career and a legacy that included falling TV ratings and accusations that he relied on fake documents to question President Bush's military record. But there was no mistaking his resolve to create a first-class news program. "This is just one wee small flag waving in the breeze saying, 'can we at some time talk about the quality of news?' "

As for staff and resources, Rather said he didn't know the details, but that he had signed on for three years and that Cuban had promised him "complete creative and executive control" and the money to hire whom he wanted. " As long as my health and his money hold out," joked Rather, "maybe we can accomplish something."

Fear not about Cuban's money holding out. Cuban made it clear he isn't in this to make money, at least not yet. He's already dumped a bundle, he allowed, but has no plans to take HDNet public. "I don't give a damn about earnings per share," he says. "I'm going to eat no matter what."

TRADING UP TO HD-TV. And folks are starting to buy up those HD-TV sets. By 2010, 65% of U.S. homes will have a HD-TV set, figures digital consultant Leichtman Research Group, as falling prices help energize sales. Cuban says he expects that as people get those souped-up TV sets they'll want to tune into pictures that are better than what they're getting now. "People are always saying folks won't want something new but every time something comes along it finds an audience," he says. "When there were only broadcast networks, people said who needs cable. Then they said who needs CNN and 24-hour news."

The math, at least to Cuban, is clear: "When all those people buy high-definition TV sets they're going to want something to watch on them." Cuban, of course, figures he has the answer. Maybe Dan Rather is part of it, maybe not. But don't try to tell Cuban to shy from the battle. If his basketball exploits are any example, Cuban doesn't mind spending his own money to get what he wants. High-definition TV may never be the money machine that the billionaire envisions. But he doesn't intend to go quietly into the night.


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