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May 25, 2008
HD at A Premium
How High-Def Is Changing The Marketplace for Premium Programmers
By Timothy Sprinkle

(The Bridge) It’s hard to talk to anyone in the television industry these days without facing some tough questions about high-definition content.

Who has it? Who doesn’t? What kind of quality are they offering? How many customers are getting it?

And nowhere is HD more of a hot-button issue than at the premium networks, especially as they seek to differentiate themselves from standard cable offerings and justify their subscription fees in the face of ever-expanding multiplatform entertainment.

“HD is important to the HBOs and the Showtimes because they were out there first,” says analyst Bruce Leichtman with Leichtman Research. “When you think about the original HD networks, you often think about Discovery and ESPN but (the premiums) were right out there. And they were definitely first with original HD programming.”

But, according to Leichtman, the real reasons that HD is so valuable to the premium players are that movies tend to play particularly well in high-def and that HD content is more likely to, like premium networks, feature upscaled video resolution.

“It’s a great form of glue,” he says of HD, “so it’s just another way for the networks to add stickiness to their subscriptions. When we look at premiums now it’s very much about glue – HD, VOD – all designed to add value to the premium subscription.”

In this issue of The BRIDGE we’ll examine the growing market for high-definition programming from premium players like HBO, Showtime and Starz. Wha! t are th ey offering? What challenges do they face? And how is HD changing what it means to be a premium programmer?


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