Friday, November 9, 2007

Marc Cuban Has it Out with DIRECTV Chairman and President Marc Cuban isn't just busy dancing with the stars. He's also duking it out with DIRECTV over how much the satellite providers' customers should pay for the HDNet channels. Currently, Cuban's two HD channels are included in DIRECTV's "basic" $9.99/month HD subscription package, but DIRECTV wants to move them to the higher-tier HD "extra" package that would cost another $4.99 per month. According to SkyREPORT, HDNet has filed suit, claiming that DIRECTV is "trying to destroy it" by forcing customers to pay more for the HDNet channels.

It sounds a bit childish (not to mention superhero-ish) to claim that a company is "trying to destroy you", but I can see HDNet's point in that customers might be reluctant to now pay for a service that they were already recieving. On the other hand, being classified as having premium offerings says a lot for the content you offer, right? If HDNet fans truly are fans, they'll pay the extra $5/mth which, in addition to HDNet and HDNet Movies, will also include MGM HD, Smithsonian HD, and MHD.

This leads to an even bigger issue: should HD content be classified into different packages, or should all high-definition channels be offered to subscribers for one fee? Of course you don't want to pay a premium for channels you are never going to watch, but why should one person's interests cost more money than another's? Canadian HD providers have adopted the same tiered approach to HD content, with things like special sports channel add-ons, or additional high-definition movie channels. The bottom line is that if you want it, you'll pay for it.

Back to the issue in the U.S.: HDNet feels that DIRECTV's decision represents a "gross violation of contractual obligation"; while DIRECTV deems the lawsuit unnecessary, with no evidence to support it. Let the drama ensue...

On a related note, Leichtman Research Group reports that only 32% of consumers actually know there's a difference between HDTV and digital TV, and that, of almost 28 million U.S. households with HDTVs, only half actually subscribe to HD service. That being said, I don't think the issue should be about splitting up content: it should be about promoting the very existence of HD content so that the other 50% of consumers can get on board!

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