Posted by Bud on January 06, 2010 at 10:31:20:
Cable giants hope to sell us on the value of 3-D TV
ESPN, Discovery plan to offer latest twist in high-tech programming
Phil Rosenthal
Media
Cable giants ESPN and Discovery Communications very excitedly put out word Tuesday that they're each going to start presenting some programming in 3-D.
Because we lack the bucks for the new high-tech TVs that will be needed to enjoy the full effect, this development is one that doesn't yet look as though it's headed straight at most of us.
The announcements were timed to dovetail with the big Consumer Electronics Show in Las Vegas. Companies such as Sony Corp., a partner with IMAX in Discovery's 3-D channel, are poised to market the TVs soon.
But the full picture is less about what we see than what we feel.
The hope is that when awe-struck by the lifelike illusion of images coming off the screen, we won't notice the very real cash leaving us -- or better still, we won't mind.
It's a question of value. On a lot of fronts.
The real customers for ESPN and Discovery are not us but the cable and satellite providers to which we subscribe. This is one more product to sell, one more reason to offer viewers to remain customers and not flee to over the air or the Internet. It is another way to remain vital and valuable.
These two 3-D announcements come less than a week after Rupert Murdoch's News Corp. negotiated a new deal with Time Warner Cable that stands to be felt even in markets that Time Warner doesn't serve, such as Chicago. News Corp. leveraged the popularity of some of its channels to gain compensation from Time Warner Cable to carry Fox-owned TV in its markets.
It's the same programming people can -- and many do -- get free over the air.
But News Corp.'s argument was that part of the appeal for cable subscribers was Fox Broadcasting programming such as "24" and pro football. So why shouldn't it get paid the same way, say, Walt Disney Co. gets paid for ESPN, which is subsidized on average by more than $4 per month per subscriber (whether it's watched or not) and still sells ads?
It's not clear how much the Fox stations scored. But it's a start, and the other broadcast networks -- some of which once might have been content to forgo cash for agreements enabling them to launch new sister cable channels -- are likely to push for their own payments. The second revenue stream is a hedge against whatever happens to the business of selling ads, which hasn't been going great lately.
If the average monthly cable bill is around $75 now (with ESPN2, Disney Channel, TNT, Fox News, USA and NFL Network each commanding more than half a buck each month per subscriber) it's likely to keep rising.
The New York Times has reported that Discovery, for example, is hoping to parlay partner Oprah Winfrey's name recognition for OWN: The Oprah Winfrey Network into 50 cents per subscriber per month compared to the 12 cents Discovery Health, the channel it's replacing next year, now commands.
Now it's possible that to gain Washington approval of its acquisition of NBC Universal, Comcast may have to agree to a la carte pricing, something the cable industry has resisted. But if that precedent is set and cable customers get to pick what channels they pay for, the industry is still going to scramble to maintain its overall revenue levels. Anything that makes people think they are getting their money's worth will be welcome.
Whether 3-D TV is it remains to be seen, but probably not by those who just shelled out for new high-definition digital sets.
For ESPN parent Disney and Discovery partners Sony and IMAX, the goal is to not just push technology to its oh-my limit but into our living rooms. If 3-D experiences such as "Avatar" can get people out of their houses to the multiplex, maybe there's a home market for the technology and content, too.
What jumps out from a truly brilliant picture, these companies believe, are rich bits of green.