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Ovation OK With Comcast-NBCU

5/03/2010 12:01 AM Eastern

Charles Segars is CEO of independent
arts and entertainment
cable network Ovation
and a movie writer and producer.
He’s an independent channel
executive who doesn’t see
a problem with Comcast and
NBC Universal getting together,
based on Comcast’s good treatment
of Ovation. He does think
something’s wrong with the
retransmission consent system
and how it might disadvantage
smaller cable networks. Segars
recently shared his views on
those topics with Multichannel
News Washington bureau chief
John Eggerton.

MCN: You are an independent
programmer. Are you worried
about a combined Comcast/
NBCU?

Charles Segars:
I’m not worried
about it. I think NBC has an extraordinary
amount of power. I
think Comcast has an extraordinary
amount of power. But putting
them together, one plus one
does not necessarily equal three.

As an independent programmer,
we have had a great experience
with Comcast. We went in
with a nonduplicative service,
one that we believed that could
serve a customer that was clamoring
for the arts category. We
came in well-financed and we
came in with a good management
team. And I think at that point, we
earned the respect of Comcast and
we earned, truly, the right to get in
front of their customers. They have
been terrific at rolling us out.

MCN: That sounds like you don’t
think that everyone with an idea
for a channel deserves to get on.

CS:
I don’t think every channel
with an idea meets some of the
important hurdles to get the
bandwidth for distribution. And
those hurdles are very specific.

It has to be a nonduplicative
program offering. I wouldn’t want
to be out there launching another
movie channel. Don’t we think
we have enough movie channels? I
don’t think we need a guy who has
an idea for The Gardening Channel.
Don’t we get enough of that
on Home & Garden? Don’t we get
enough of that in hours of lifestyle
programming peppered amongst
a lot of the general entertainment
networks? That is hurdle No. 1.

Hurdle No. 2 is you have to
have a good management team
and you have to be capitalized
so that if Comcast does give you
the nod you can sustain the business
so they are not giving you the
bandwidth to reach their customer
and then you run out of money
after year one.

MCN: And if the channel that is
being duplicated is one they own
a piece of, is it OK for them to
deny the new channel carriage?

CS:
I think that is where the debate
is. But, again, I think that
if other channel is duplicative,
there is an argument to be made
that [the] customer is already
being served.

I’m not saying that other channels
shouldn’t have a right to get
on and they shouldn’t fight to get
on, but Comcast isn’t the only
player. Go get DirecTV. Go get Verizon.
Go get a number of the other
of the distribution outlets, and
then your audience demand will
help you get right back there on
Comcast.

MCN: Does must-carry combined
with bandwidth demands
on cable from high-definition
and advanced services make it
harder for an independent to
get launched?

CS:
I think there is always the
challenge of bandwidth with the
operators. There is always going
to be that challenge.

MCN: What about retransmission
consent?

CS:
One of the most difficult
problems we face is when the
large broadcast entities come
back and hold the cable operators
hostage. Those operators come to
the smaller independents to off-
set some of those pennies. And
that is very difficult for us.

MCN: So, it sounds like the FCC
should step in.

CS:
They should definitely take a
hard look and see how the independent
programmer is aff ected
when the larger broadcast networks
and vertically integrated
cable programming services
come in for their big bite for the
cable operators. We suffer.

MCN: So you don’t think broadcasters
deserve the price they
are asking for their signals?

CS:
I didn’t say they didn’t deserve
it. All I am saying is that
when they go in and ask for their
money, it gets passed on to the
consumer and it also gets taken
out of the hide of some of the independent
programmers who
have no leverage.

The cable operators don’t want
to take it from me, or pass it on
to their customer, but they are
forced to.

When a Disney comes in and
holds a cable operator hostage
for an extraordinarily high license
fee, particularly when
those programming services, at
the midnight hour, pull the signals,
it is very difficult for a cable
operator to figure out how they
are going to find the money to
pay those fees out in the long tail
of their business. So, they have to
figure out a way to certainly take
less profit. And they certainly
have to figure out a way to go
to the people who don’t have leverage,
small, independent programmers,
and figure out how to
shave off pennies from us. They
don’t want to do it. They don’t enjoy
doing it, but they are running
a business.

 

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