'The Benefactor' behind HDTV

Mark Cuban is a man of many identities: dot-com billionaire, Dallas Mavericks owner and prime-time 'Benefactor.'

Five years after selling Broadcast.com to Yahoo for $5.9 billion and subsequently cashing out his shares for more than $1 billion, Cuban hasn't lost the tech gene. During a recent talk at the Web 2.0 conference, Cuban raised holy hell against the proposed Induce Act, legislation that seeks to hold software developers accountable for copyright theft by abusers. He even shot barbs at Orrin Hatch, the primary proponent of the act, claiming that the Utah senator "wouldn't know a computer if it hit him."

Rhetoric aside, one trait uniting his many personas is that he's a tireless--some say shameless--promoter of his entrepreneurial ventures.

One of his side projects is HDNet, a television station carried on cable and satellite networks offering programs in high definition. Cuban is betting that HDNet will be on the leading edge of programming to serve the growing numbers of households buying high-definition TV sets.

Cuban may have a point. HDTV prices are dropping, more cable networks, such as HBO and Discovery Channel, offer programs in high definition, and the federal government is pushing broadcast TV networks to shift analog signals to digital.

In fact, Cuban believes that the HDTV market is at an inflection point similar to PCs in the 1990s and DVD players at the turn of the century. As prices continue to fall, adoption will continue to rise.

In an e-mail exchange (he lives and dies by e-mail), Cuban detailed his outlook for HDTV growth and offered a hint about who will win his reality TV show, "The Benefactor."

Q: You sold Broadcast.com to Yahoo. You bought the Dallas Mavericks. You've got your own reality TV show. What made you interested in creating your own HDTV station?
A: The opportunity. In 2000, everyone was saying HDTVs were too expensive and their proliferation had no chance--or was 20 years away. I looked at them and saw a PC in the shape of a TV.

I knew HDTVs would follow the PC price-performance curve. Prices would plummet and features would improve. Then, as I examined the business side, I realized that bandwidth was finite and limited, and more importantly, that there was no way the majority of cable channels were going to spend the money to go HD without visibility of a return.

That created the opportunity to create HDNet and HDNet Movies, lock up some bandwidth and distribution, and start building the first all-HD content library.

Where are we in terms of consumer demand and price affordability for HDTV sets?
We are in Internet 1998. Not everyone has it, but everyone knows that it's inevitable that they will. You can't buy a 36-inch or bigger TV that's not HDTV-ready, and starting points for HDTVs in smaller sizes are $300 and falling fast.

Many TV stations are broadcasting in digital/HD--TV networks, cable channels like HBO and Discovery Channel, and public television. At this time, HD broadcasts seem like a forward-looking novelty rather than a legitimate business. How will TV channels and cable/satellite networks make money off this?
People said the same thing about FM radio.

		News.blog Broadband Our reporters' take on what's happening in broadband.

Remember when all music was on AM, and FM was a novelty without a business? Networks that can't or won't go HD will find themselves on the "AM dial" of satellite and cable companies, in a segregated area with far less perceived value.

What will consumers gain from HDTV besides a nicer picture?
Wide-screen, higher-resolution, thinner, lighter sets, with more features and functionality. But the features aren't the issue. Analog TVs will go away. It will be cheaper to buy an HD than it is to buy analog.

Color was a big shift for television. How will crystal-clear resolution change TV as well? Will there be more work for makeup artists to hide facial blemishes?
Sure. People will adjust, and it will be no big deal.

HDTV has been expected to take consumers by storm for what seems like decades. Now that the HDTV period is upon us, what are the potential hurdles holding it back these days?
None, zero, zippo. Unless, that is, our government does something stupid like the Induce Act. I can see it now: Someone whose

business is negatively impacted by high def suing TV manufacturers to stop making them because the crystal-clear pictures induce people to want to make a copy. Or because the hard drives coming in HDTVs, as they try to compete as media servers, allow for recording and making backups.

If we leave (it) enough alone, HDTV will happen, and new outlets for content will flourish.

Who will come out ahead, in terms of feeding HDTV demand, cable or satellite? Are they doing enough to feed the beast?
It's a war, and the consumer will win.

Have PC makers missed the boat?
Not yet. It astounds me that none of the cable companies will allow PC manufacturers to install connectivity and software to their networks. They could offload the costs, have the same content and customer protections, and increase customer choice. More importantly for cable, it would immediately expand tenfold their retail presence, an area where they lag against satellite. They haven't chosen to do so.

If I'm Voom, I put my connectivity on a card or chip and sell it to every PC company. It makes them an immediate player.

Is there a way for PC makers to become HDTV players?
I would leverage the plummeting cost per gigabyte of storage, go to CinemaNow and content providers, and preload as many movies and TV shows as I can on every media PC. With DRM (digital rights management), they could charge to unlock the content and have a nice revenue-sharing business with zero hard costs.

Will Web giants such as Yahoo, America Online and MSN be able to find a way into this business?
Why would they want to?

Extra credit. Who's going to win "The Benefactor"? The person I pick.

When will the Mavericks win the NBA title?
Not soon enough.