The Future of Current

The New York Post reports today that Current TV, the network best known as the brief post-CNBC home of available-now Keith Olbermann, is on the block.

A 60-million subscriber network is usually worth at least $15 per subscriber or $750 million, sometimes considerably more. However, one wonders what, exactly, is the programming opportunity for Current. Fox News is the news service on the right, MSNBC is the news service on the left and CNN is the news service in the middle. Not that Current is, strictly speaking, a news service, being more about talk shows than newscasts. Headline News has also morphed from a news service into a talk show channel.

Despite the attractive qualities of news programming (original, live and essentially DVR-proof), there is little evidence to suggest that television distributors are looking for more news channels. CNBC, Bloomberg, Fox Business, Weather Channel and C-SPAN's services also cover the news in various ways, as well as every major broadcaster. If distributors want another news channel, there are many to be had, particularly international services like BBC World News (which Comcast has rolled out in a big way, in the aftermath of its acquisition of NBC), France 24 (an English-language service widely carried by Time Warner Cable in New York), RT (the former Russia Today, with the Russian perspective on the news, also in English) and, Al Jazeera English.

That said, Current's "shelf space" has value. If Current were to be acquired by an existing US programmer, it could be bundled with their existing portfolio of channels and rebranded. Perhaps the best fit of all would be for Disney/ABC and Univision to acquire Current to jumpstart the distribution of their new English-language, Latino-targeted news service. That service current-ly exists as a website, but is planned to launch for cable distribution in 2013 from a base in Miami.

Another take: USA Today's Michael Wolff sees Current going into the hands of an online media company like Huffington Post or TMZ

The Bullied Becomes the Bully

Stop me if you think you've heard this one before. Someone pays a lot for the local sports rights to a professional team and starts a new regional sports network. The cable operators (and other distributors like DirecTV, Dish Network, AT&T U-Verse and Verizon) complain that the channel is too expensive and that they can't possibly pass through this increase to their customers and they should be able to carry the new channel on a secondary tier, a sports tier or on an a la carte basis.

Today's example is the new regional sports network featuring the Los Angeles Lakers of the NBA. In a twist on the usual Time Warner Cable, the largest cable operator in the Los Angeles DMA is the owner of the rights. Cox, the largest cable operator in the San Diego DMA is complaining about the cost.

In February, Time Warner Cable was making the exact same complaints about the cost of MSG Network, the home of the disappointingly short-lived Linsanity-era New York Knicks.

There are three ways these disputes end. The most common is that the distributor agrees to carry the new sports channel on basic, possibly getting some sort of price break, sometimes after a long hold out (e.g., YES Network on Cablevision). Less commonly, the distributor decides not to carry the channel at all (but a critical mass of other distributors do agree to carry it -- the YES Network has never been carried on Dish Network). Still even less commonly, the new rightsholder throws in the towel and sells the rights to someone else (e.g., Victory Sports One, a venture of the Minnesota Twins).

So it goes.

Implications of the Evolution to High Definition

After a rocky start -- I recall Steve Martin hosting the 2003 Oscars giving a shout-out to the HD viewers, all three of whom he said were "watching at Circuit City" -- High Definition is the New Normal, per Nielsen.

The logo of Circuit City, the late electronics chain

Nielsen's findings:

• "more than three quarters" on US households have an HD set; up 14 points from last year
• 61% of prime time viewing is done on an HD set
• 29% of English-language broadcast prime viewing is in true HD
• 25% of cable prime viewing is in true HD

Why do people watch SD programming on an HD set? Three things come to mind:

• The programming they want to watch is only available in SD.
• The programming they want to watch is available in HD, but they do not have an HD box.
• The programming they want to watch is available in HD, they have an HD box, but they are not tuned to the HD channel.

The marketplace has taken care of the first point, every one of the top 25 cable networks has an HD feed, as well as all of the major broadcasters. Nick Jr., Teen Nick, and Nicktoons are about the most prominent channel that is not in HD (children's services were/are generally HD laggards; sports services are HD leaders). Current TV may be the most prominent SD-only service that is not targeted at children, which is not exactly a distinction one would want.

The second point is a real one. In some places the TV provider charges extra for an HD box or "technology fee" (for example, DirecTV's $10 "Advanced Receiver Service-HD") . For some viewers, they got an HD set to get a sleek flat screen, not because they were hankering for a sharper picture.

The third point is one a distributor can and should fix since it leads to a suboptimal consumer experience. For years, Cablevision followed a strategy of always tuning an HD box connected to an HD set to the HD feed, irrespective of the channel tuned by the consumer (e.g., if NBC is on channel 4 and NBC HD is on channel 704, the HD box would display the HD feed even if the consumer tuned to channel 4; note the HD logos on the low channels on its Woodbury, N.Y. channel lineup). Lately, I have noticed that Time Warner Cable in Manhattan is doing the same thing with respect to at least some of the channels (e.g., NBC, Fox, ABC, Syfy, FX, but not MSNBC or Oxygen).

Providing the HD feed to customers watching the "SD" channel numbers is a start on addressing the remaining SD legacy issue -- the HD channels are up in the ozone while the SD channels are at the bottom of the dial. Someday the incumbent providers will invert the practice. In the short term, it represents an opportunity for an existing player or new entrant to reposition itself with consumers.