Time-Warner looking to take-on HITS from TCI.............................
usatoday.com
Time Warner steps up digital cable race
NEW YORK - Time Warner might be on a collision course with Tele-Communications Inc. to control one of the cable industry's most important new businesses - one that could affect the programming millions of subscribers will see.
Time Warner says that in the first half of 1998, it will pick a group of cable channels, convert them to digital signals, and package and distribute them to local operators via satellite.
That could make Time Warner a competitor of TCI in cable's fast-growing digital TV distribution business. TCI's service, called Headend in the Sky (HITS), has no major rival.
The services are crucial to cable operators and subscribers. Many cable systems - hamstrung by a lack of capacity - can't provide many of the smaller and newer cable channels their customers want.
But most plan soon to deploy a generation of digital cable boxes that will enable them to add dozens of channels. Those channels would come from a menu provided by HITS, or perhaps Time Warner.
Indeed, Time Warner is said to have decided to launch its service partly out of concern that its own channels will be shortchanged on HITS. For example, HITS' packages, with 125 channels, provide more slots to TCI's premium channels - Encore and Starz! - than they do to HBO's services.
Time Warner Cable's Michael Luftman says the company's digital transmissions initially will go just to Time Warner systems. He says Time Warner is entering the business because its systems, mostly in large cities, need different programming choices.
"HITS was tailored to the channel lineup of the TCI systems," which serve smaller communities, Luftman says. Some Time Warner systems, he adds, plan to use HITS. As a result, Time Warner "is not a competitor" to HITS.
But HITS does see Time Warner as a potential rival. "It's too early to say at what level," HITS chief Rich Fickle says. "I'm not even sure Time Warner knows."
By David Lieberman, USA TODAY |
