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HighDef Catch-22
by Robin Rowe
3/18/2004

Mark Cuban - one of the richest people in America - founded HDNet in 2001, the first high definition television network. Cuban had netted $2B when his company Broadcast.com sold to Yahoo! in 1999. He invested more than $100M to help launch HDNet. Cuban is perhaps best known for another purchase he made, his hometown basketball team the Dallas Mavericks in 2000 for $280M. Mark Cuban discussed HDNet and the Mavericks with CBS LATE LATE SHOW host Craig Kilborn as the keynote presentation during HD Expo in March at the Peterson Automotive Museum in Los Angeles.

"There is no such thing as enough HD," says Cuban. HD content originates from three basic sources: film, HD cameras, and video cameras. Television shot on standard video can be up-converted to HD, but that is a bit like mono sound converted to simulated stereo. Consumers can tell it is not the real stuff. "HD has a crisp you-are-there look," notes Cuban. "All networks will convert to HD - or create a TV ghetto like with AM/FM." He says that HDNet is the first network to be HD all the time, that HD pioneer CBS only offers about four hours of HD programming per day that is not up-converted.

High definition, abbreviated as HighDef or HD, is a television standard with three or six times the image resolution of ordinary television. As standardized by ATSC, HD comes in two popular flavors for distribution: 1080i and 720p. An important format for origination is 1080p. That format, at 1920x1080, compares favorably with SMPTE film standard Academy digital intermediate at 1828x1332. To match up with film 1080p is often shot at 24fps, not the usual 29.97fps for television. HD shot at 1080p 24fps behaves much like film, but with the instant gratification of digital production.

Last year I noticed on the set of NBC's FRIENDS they were shooting with 35mm film. It was hard not to notice - they were rolling five Panavision cameras! Only top television shows and feature productions can afford film. And, conversion to HD through film scanning adds costs. That can range from $1k to $10k per hour extra.

Recently I saw on the set of WB's WHAT I LIKE ABOUT YOU they are shooting with Sony CineAlta F900 (HDCAM) cameras. Most networks have started shooting on HD. ABC with HOPE & FAITH, CBS with JOAN OF ARCADIA, Fox with A MINUTE WITH STAN HOOPER, and UPN with GIRLFRIENDS are a few examples of shows shooting with Sony CineAlta cameras. Fox's ARRESTED DEVELOPMENT shoots with the Panasonic Varicam 27V (DVCPRO-HD) camera.

Cuban's interests in HD go way beyond HDNet. Together with long-time Dallas business partner Todd Wagner, he has 2929 Productions making big budget movies in the $5-$30 million range. In 2001 they acquired Rysher Entertainment and its film library including syndication rights to HOGAN'S HEROS, CHARLIES'S ANGELS, and SEX AND THE CITY. HDNet retrieved from the film vault the original footage shot for HOGAN'S HEROS, scanned it and broadcast it in HD for the first time.

In 2003 Landmark Theaters was acquired with 196 screens and 56 locations. Landmark is the largest art house chain in the USA, showing first-run indie and foreign films as well as restored classics. Landmark had rocked SMPTE, a standards body laboriously seeking industry consensus on digital cinema formats, with a surprise announcement earlier in the year that Landmark would adopt Microsoft Windows Media technology for 177 screens in 53 locations - making it the dominant digital cinema format in the country. This led to the surprising entry of Microsoft into SMPTE. Besides Microsoft's VC-9 format, some Landmark theaters sport Sony HDCAM players.

Later in 2003 the pace of Cuban's HD expansion accelerated. Landmark acquired Magnolia Pictures, a specialty distributor that picks up independent movies at film festivals. And, a deal was cut with Blow Up Pictures partners Jason Kliot and Joana Vicente to run HDNet Films, now in post-production on GODSEND (in co-production with Lions Gate, another company Cuban has a stake in) and CRIMINAL (in co-production with Steven Soderbergh's Section 8). HDNet Films plans to produce as many as eight HD films a year with budgets up to $2M.

Cuban says seven million homes have HDTV sets now. A barrier to consumer adoption of HDTV has been price. Cuban points out that HD equipment prices continue to drop dramatically. An off-brand 27" HD 1080i monitor at Best Buy can be had today for just $500 - but that's with a 4:3 screen instead of the 16:9 widescreen that HD viewers would expect. A more realistic budget is $1,500 for the HD-ready Sony WEGA 30" flat-tube widescreen TV. That doesn't include a tuner, but your HD satellite or cable set-top can provide that. Consumers minimizing hardware expense can get the Haupaugge WinTV-HD PCI card for $300 and display HD on a computer monitor.

During the keynote at HD Expo, Cuban discussed his reputation as an outspoken critic. Cuban was once fined a record $500,000 by the NBA for saying of NBA's head of officiating, "I wouldn't hire him to manage a Dairy Queen." And to make it up for the slight to Dairy Queen, Cuban worked as a manager at one of their stores for one day as a publicity stunt. Cuban says his beef is not with the NBA referees, but with the league mismanaging referees with complicated instructions that interfere with the rules being applied fairly and consistently.

With uncharacteristic circumspection, Cuban doesn't say anything about how cable and satellite companies are interfering with his HD game. Cuban says that consumers offered the choice of HD and standard television will choose HD. Unfortunately, consumers are not being offered that choice. It is not that cable and satellite don't offer HD. A 4-channel HD package (HDNet, HDNet Movies, Discovery HD, ESPN HD) is offered by DirecTV or DISH for only about $10 a month. Who wouldn't like to have HD for $10 a month? Well you can't have it, not without first buying 30 channels of obsolescent SD content for $40 a month more! The line-up isn't any different with cable companies. HD is being sold as an add-on luxury item. The true cost to consumers for four HD channels is an exorbitant $50 a month.

Cuban describes funding for HD programming as a Catch-22, that cable companies don't want to pay twice for the same content. I say the bigger problem is consumers don't want to pay twice either. Give us four HD channels for $10 a month with no hidden catch!

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