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Viewers are Taken with original cable programming

17 Dec, 2002 By: Holly J. Wagner

Since I started writing about the home video industry, I've become accustomed to a sort of fortressing mentality among video rentailers, especially indies, that seems to regard every potential competing technology – pay-per-view, video-on-demand, cable and satellite – as poaching on its prerecorded territory.

But after a trip to Broadband Plus a couple of weeks ago, it's becoming more and more clear to me that is a fallacy.

It may have been true at one time, but the cablers especially have realized that original programming is their ticket into homes. Far from wanting to squash packaged media, the cablers are counting on packaged media to offset the production costs of their original series and movies.

HBO has been leader of the pack. It's not only the popularity of The Sopranos that led HBO to put the show (and many of its other original programs) on cassette and DVD. The average cost of original programming for cablers is $1.2 million per program, according to Matt Blank. That cost is way lower than most broadcast networks spend on shows and not even close to the cost of a studio blockbuster theatrical hit.But what happens when your cable show becomes the water cooler show of the season? Four things, at least: it increases demand for the show, increases demand for the network, creates a market for a less transient form of the show and, in all likelihood, ratchets up the stars' salary demands.

That means the programs hit a sort of equilibrium, in which just about the time a show is hot enough to trigger big salary disputes, it's also hot enough for previous seasons to sell on tapes and discs to make up the difference.

The cable networks are starting to bank on that. A great example is “Steven Speilberg Presents Taken, a ballyhooed miniseries that catapulted Sci-Fi Channel's ratings beyond its wildest expectations. As the network avers, the show gobbled up its bandwidth for two straight weeks, pushing many other shows off the schedule as the channel re-aired the entire series several times in different time blocks. It also made Sci-Fi the leading basic cable network in prime time for the first time – for two weeks in a row. And as I watched some of the catch-up marathon last Saturday, I saw the crawler line across the bottom of the screen: “Coming to DVD in 2003.”

I'm interested to know who rents boxed sets and how such rentals are structured. Or is the boxed set just a sellthrough and gift phenomenon? If you've tried renting boxed sets to your customers, Buzz me back.

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