Cable News

Allen unloads TechTV: Comcast Corporation will expand its reach with the purchase of TechTV, the geeky startup founded by Microsoft co-founder Paul Allen. According to reports on March 26, Comcast will pay approximately $300 million for TechTV, whose "Robot Wars" and other productions are available in more than 43 million homes.

Comcast plans to merge TechTV with G4, the video game network the cable operator began in 2002. The combined network will retain the G4 name and be available to 44 million households, Comcast's official estimate. Allen decided to spin off TechTV as part of a restructuring of his investment company, Vulcan, Inc., which acquired TechTV from Ziff-Davis four years ago at approximately $320 million. The venture has lost $30 million during Vulcan's tenure, reports noted.

Voom puts dent in Cablevision: The launch of Voom, the high-definition direct broadcast satellite service, has caused parent company Cablevision Systems to post a consolidated operating loss of $46.2 million for the fourth quarter. The NY cable provider reported operating income of $70.6 million for the same period a year ago. Rainbow DBS, the Cablevision satellite division, reported an operating loss of $54.9 million, compared with an operating loss of $1.8 million in the same quarter in 2002.

A substantial amount of the loss was attributed to the Voom start-up, including marketing, administration, high-definition channel development and systems integration expenses—costs not offset by new Rainbow DBS revenue. Consolidated fourth quarter Cablevision revenue rose 12% to $1.2 billion, from $1.1 billion in the same period a year earlier. For the year, Cablevision consolidated revenue grew 10% to $4.2 billion, up from $3.8 billion year-over-year. Operating income dropped 83% to $31.6 million, from $190 million a year ago. Net loss for the 2003 fiscal year was $297.3 million, compared with net income of $93.3 million for fiscal 2002.

Senator John McCain (R-AZ) is tossing around a concept that should please cable and satellite subscribers. The head of the Senate Commerce Committee has been asking why subscribers should have to pay for channels they don't watch. McCain would rather see signal providers charge on an "à la carte" basis rather than on a "prix-fixe" basis, according to reports out of Washington in late March.

McCain's notion is based on the realization that most people don't watch all the channels they can receive. Most have a few favorites and rarely deviate from those. McCain has plenty of bipartisan support for the idea. Trent Lott (R-MS) told cable providers to "do something about your rising rates or you're going to have trouble." Ron Wyden (D-OR) agreed that consumers are "force-fed channels and features they don't want." The plan to itemize cable and satellite billings reportedly has support among some FCC Commissioners.

Disney expands "on-demand" deals: The recent target of a takeover bid by Comcast, Walt Disney Company has been pushing its "on-demand" service to other cable providers. On March 25, Disney's ABC News announced that it would deliver about 20 hours of programming a month to Insight Communications Co., the country's ninth-largest cable operator with 1.3 million subscribers in four states. Insight, in turn, will offer more than 150 hours of programming from several networks to its subscribers for $4.99 a month. The cable company is also negotiating a similar deal with Disney's ESPN network for sports programming.

On-demand services, which let viewers pause, stop, rewind, or fast-forward as if they were using VCRs, are among the hottest attractions for cable subscribers. "Video on-demand makes a huge difference because it creates consumer stability and loyalty," said Insight CEO Michael Willner. Last year, Disney launched its own nascent video-on-demand service called MovieBeam.

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