Broadband Cable Association of Pennsylvania


December 17, 2012

Service Electric Cablevision has gone 3D.

The local cable service Thursday launched 3net, a joint venture television network from Discovery Communications, Sony Corporation and IMAX Corp., that will be available to its 100,000 customers in northeast Pennsylvania. 3net went live on channel 500 with both original 3net premieres and feature films available throughout the holidays. 3net originals premiering include an all-new episode of "From the Basement," featuring the Red Hot Chili Peppers; the wildlife special "Savage Migration," and "I, Human," the world's first 3D look inside the human body. "For our customers who own or plan to purchase 3D capable TVs, we want to ensure Service Electric Cablevision provides them with more value for their entertainment investment," said Donald Brandt, director of programming. "3net was the perfect addition because it provides our customers 3D programming 24 hours a day with content from Discovery, Sony and IMAX. As the first cable company in the nation, we are proud to also be the first cable company to offer 3net."

Here's an overview of programming available to Service Electric customers during the holidays: "From the Basement," A Red Hot Chili Peppers episode premieres at 9 p.m. Sunday, featuring performances from today's hottest musicians without the interference of presenters or audiences. "Monster House," a feature film airing at 8 and 10 p.m. Monday. Co-produced by Steven Spielberg, this hit animated film features three adventurous teens who discover that the scary house across the street is a living, breathing monster. "Cloudy with a Chance of Meatballs," a feature film airing 8 and 10 p.m. Tuesday. Bill Hader, of "Saturday Night Live," is the voice of Flint Lockwood, a hapless but well-meaning inventor. James Caan is his technophob dad, whom he can't please, even when he makes food fall from the sky.

"Storm Surfers," marathon starts 7 p.m. Dec. 26. Follow surfing legends and best friends Ross Clarke-Jones and Tom Carroll as they work with genius surf-forecaster Ben Matson to hunt down Mother Nature's biggest waves and surf the planet's most dangerous breaks. "Savage Migration," premieres 9 p.m. Dec. 27. The great annual wildlife migration is the largest mammal migration in the world. Every year, around 1.5 million wildebeest and 300,000 zebra and antelope gather up their young and trek from Tanzania's Serengeti Plains to north of Kenya's Maasai Mara National Reserve. "I Human," premieres 8 p.m. Dec. 30. Using a blend of specially shot real-life sequences and cutting-edge CGI, the film takes viewers on a journey inside themselves. "Open Season," an animated feature film premieres 8 p.m. Jan. 1. Boog, a domesticated 900-pound grizzly bear, finds himself stranded in the woods three days before open season. Forced to rely on Elliot, a fast-talking mule deer, the two form an unlikely friendship and must quickly rally other forest animals to form a diverse army against the hunters. Shamokin News Item

Anyone wondering why News Corp.'s Fox has been negotiating so many sports deals in recent weeks, including a stake in the YES Network and a likely deal to renew TV rights to the Los Angeles Dodgers, has only to look at one number for a possible explanation: $42 billion. That's the value put on Walt Disney Co.'s sports juggernaut ESPN by Wall Street research firm Sanford C. Bernstein. It is more than the market capitalization of several big entertainment companies, including Viacom Inc. and CBS Corp., and nearly as much as that of Time Warner Inc.

It reflects in part ESPN's outsized share of subscription fees split with cable- and satellite-TV operators. ESPN's flagship channel alone generates four times as much revenue from such fees as the next biggest cable channel, according to market researcher SNL Kagan. Enter Fox, which early next year is expected to announce plans for a national sports cable channel through the rebranding of its motor-sports network Speed, according to people familiar with the plans. The new venture, to be called Fox Sports 1, is expected to launch later in 2013, say these people. With the network, Fox will be in a position to capture a bigger share of TV viewers and advertisers' seemingly insatiable appetite for sports, not to mention the subscription fees shared by pay-TV operators. Even next to ESPN, insiders say, there's still room for Fox to carve out its own chunk of the market. "There's no natural reason why there should be just one" major sports network, said Bernstein analyst Todd Juenger.

Fox believes it can carve out a profitable business if the rebranded Speed can boost the fees Fox now receives for that channel, which average 22 cents per subscriber per month, SNL Kagan estimates. ESPN receives more than $5 per subscriber, Kagan says, although Fox would need less than $1 to make the network viable, say two people familiar with its thinking. News Corp. has never formally acknowledged plans publicly for the national sports network. But News Corp. Chief Operating Officer Chase Carey has hinted at it, while playing down speculation that Fox would try to create an ESPN rival. "People have said we're going after ESPN. ESPN is a different game," Mr. Carey told investors in September. During News Corp.'s November earnings call with analysts, however, Mr. Carey said Fox has "got enough breadth and the right franchises" to build its sports properties "into something that can be special for us." News Corp. also owns The Wall Street Journal.

If it goes ahead with the channel, Fox would be jumping into an already-crowded arena where TV-sports-rights costs are skyrocketing. Aside from ESPN, Comcast Corp. has recently rebranded its Versus network as NBC Sports Network in an effort to grab a larger share of the TV-sports market. CBS has also made a bigger foray into the market. At the same time, efforts by sports-network owners to raise their prices for satellite and cable operators is prompting a backlash, with many in television concerned about the long term implications of higher cable prices that will result.

Dish Network Corp. Chairman Charlie Ergen, for instance, has publicly warned that the rising cost of sports content, like ESPN, will ultimately lead some distributors to drop sports. DirecTV, meanwhile, recently imposed a surcharge for some new customers to reflect the cost of regional sports networks. "I'm not sure that initially [the channel is] going to be embraced openly across the board by distributors," said Chris Bevilacqua, a media-industry adviser who has structured sports-rights deals. Meanwhile, Mr. Juenger, the analysts, questions whether Fox has the rights to enough top-tier sports programming to support a national sports channel. ESPN, for instance, televises the National Basketball Association, National Football League, Major League Baseball, Major League Soccer and the best of college football and basketball, as well as the grand slams of tennis and golf's major championships.

Through its broader sports division, Fox has deals with nearly every major sports entity in the country, including Major League Baseball, the NFL and numerous local basketball, hockey and baseball teams. And over the past two years, Fox has committed more than $20 billion through 2024 to retain some of these rights, and to acquire more, including those for the NFL's championship games. It recently agreed to buy a stake in YES Network, home to the New York Yankees. In recent weeks Fox has been in talks to renew TV rights to the Los Angeles Dodgers for 25 years, at a price expected to be around $6 billion—a sharp increase over what it pays now. Meanwhile, Mr. Carey told select investors at a recent meeting that Fox could bid for rights to the NBA when they come up for renewal again in 2016, according to people who were present.

But these deals won't necessarily help the rebranded network directly. More than half of those investments, such as the $9.9 billion, nine-year rights to NFL championship games, are for Fox's broadcast network. Fox couldn't take its rights to broadcast NFL games and start showing them on a cable network, or begin showing Dallas Mavericks NBA games slated for Fox Sports Southwest, a regional sports network, on the national network. Fox would have opportunities to elevate some content from its regional sports networks to run on the national network, Mr. Carey told investors at the recent meeting. The rights granted in Fox's recent MLB agreement, which begins in 2014, allow it to recycle baseball-game content for national audiences, for instance.

Speed is already available in more than 80 million homes, about 80% of the pay-TV universe, so rebranding the network would eliminate many of the challenges involved in creating a new channel from scratch and securing distribution deals with pay-TV operators. Fox has already sought to minimize potential conflicts with affiliates and negotiate higher rates for a rebranded network, according to people familiar with its plans. Over the past several years, Fox revised the language in Speed's affiliate contracts as they came up for renewal to reflect the possible inclusion of additional content and to trigger higher rates if or when the rebranding occurs. Wall Street Journal