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Old 06-22-09, 07:15 AM
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Time Warner bumps Cuban’s HD stations

Friday, June 19, 2009 | Modified: Saturday, June 20, 2009, 5:10am CDT
Time Warner bumps Cuban’s HD stations
Dallas Business Journal - by Jeff Bounds Staff writer


The two Dallas high definition television stations in which billionaire Mark Cuban holds large ownership stakes have been removed from Time Warner Cable, the second-largest cable operator in the United States and one of the dominant players in North Texas.

The networks, HDNet and HDNet Movies, were removed from Time Warner Cable on May 31, according to Gary Underwood, vice president of communications at TWC’s North Texas Division.

“We spent a lot of time working with the folks at HDNet,” Underwood says. “At the end of the day, we weren’t able to come up with an agreement to carry HDNet or HDNet Movies on terms we thought were fair for our customers.”

An unnamed Time Warner Cable spokeswoman told a trade pub called CableFax Daily that HDNet was dropped because of “limited appeal for the programming.” Underwood declined to address that comment directly, but did say that the business is “looking for programming that’s good for our customers and good for our company. That’s how we make these decisions.”

Time Warner Cable serves Dallas and Collin counties and parts of Denton and Tarrant counties. Underwood declined to break out subscriber numbers for the company’s local operations.

As of Dec. 31, Time Warner Cable had more than 14 million customers company-wide for at least one of its three principal services, which are video, high-speed Internet and phone.

In an e-mail, Cuban declined to discuss what issues led to the removal of HDNet and HDNet Movies from Time Warner Cable.

“We hope that in the future we can work things out with Time Warner,” Cuban’s e-mail said. “We have a lot of respect for them. Until then, our other distributors have more than picked up the slack.”

But true to form, Cuban is not taking the loss of the Time Warner Cable deal lying down. On his blog, Cuban posted an e-mail from an individual identified only as “Chris,” a self-described “very disgruntled Time Warner Cable customer” who supposedly switched to Dish Network in large part to continue to receive HDNet.

“I could not have said it any better,” Cuban wrote on blogmaverick.com.

In his e-mail to the DBJ, Cuban says the response to Time Warner Cable’s “deleting us” has been “off the charts” nationwide. “HDNet and HDNet Movies fans have voted with their checkbooks, and we truly appreciate it.”

In the Dallas area, HDNet and HDNet Movies are carried by DirecTV, AT&T, Verizon and Charter Communications, according to Cuban’s e-mail.


Minimal financial impact

Neither Underwood nor Cuban would disclose the financial terms of the disrupted relationship between Time Warner Cable and the two networks, so it’s hard to put a number on the impact of TWC’s decision for HDNet.

Networks that don’t broadcast over the air, such as HDNet and HDNet Movies, are generally paid a per-subscriber fee to be shown on a given cable or satellite carrier.

“The subscriber fees are part of the lifeblood” of any such network, says Bruce Leichtman, president and principal analyst at the Leichtman Research Group, a Durham, N.H.-based research and analysis firm focused on the media industry. That fee generally ranges from as high as $1 per subscriber to free, but is “all over the board,” Leichtman says.

HDNet was carried on Time Warner Cable’s special “HD Tier,” which costs subscribers an extra $6.99 per month. Time Warner Cable does not break out how many of its customers subscribe to the HD Tier, but it is fewer than the number who get basic cable.

“They were on an obscure tier,” says Derek Baine, a senior analyst at SNL Kagan, a Monterey, Calif.-based research firm. “It’s pretty nominal,” he says of the financial impact to HDNet. “It’s a rounding error, really.”

Launched in 2001, HDNet and its sister network were pioneers in broadcasting in high definition. But since its genesis, other cable networks, from ESPN to Lifetime, have launched their own versions of high-definition programming.

“People like known content,” Leichtman says. With HDNet, “they know it’s (high definition), but they don’t necessarily know the content as much.”

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http://dallas.bizjournals.com/dallas/stories/2009/06/22/story1.html?b=1245643200^1847990&ana=e_bjtt
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