Indie film cable operator ponders exit from Orlando
Growth drives changes in strategy at New Screen Television.
Cindy Barth - Managing Editor
ORLANDO -- New Screen Television, a pay-television cable channel operator for independent films and videos, has struck a distribution deal with a Houston company that's setting the stage for a new strategy -- and possibly a new hometown.
Among the changes following its agreement with Optical Entertainment Network, New Screen now plans to aggressively go after more fiber-to-the-home, pay-TV providers, in addition to cable and satellite operators.
Further, New Screen may leave downtown Orlando for a larger market where it can more easily uplink to satellite carriers.
"We really love Orlando and the quality of life here," says Rick Erickson, general manager of New Screen, a wholly owned subsidiary of Vision Works Media Group Inc (OTC: VWKM.PK). "But honestly, we're having to consider what might be best for us as a company. Orlando just doesn't have the kind of uplink co-location infrastructure that a Miami or Atlanta does."
The changes at New Screen were an accidental byproduct of a series of events that started with the Optical Entertainment deal in September, Erickson says.
After converting WRCF-TV Channel 29 to an outlet for independent films and videos in 2004, he and partners Mark Astrom and Naseem Shah planned to target satellite and cable operators as potential carriers for their original content.
Erickson's role was to oversee those negotiations. He brought a wealth of experience with him, having helped with the market launch of DirecTV, first in the United States and then throughout Latin America. The industry exec also spent a few years as part of HBO's direct broadcast division, where he continued to handle carrier negotiations.
He also brought with him relationships developed over the years from his industry work. It was one of those relationships that led to the Optical Entertainment deal.
"I worked with Rick when he was at DirecTV and HBO," says Optical Entertainment Chief Marketing Officer Albert J. Estrada. "When I saw what he wanted to do with New Screen, I realized it was a unique proposition -- taking the thousands of films being shot inexpensively today, thanks to easily available and affordable technology, and giving them a forum to be shown."
'The next wave'
The idea of using fiber to connect to the home is nothing new.
Rapid building of fiber networks took place during the 1980s and 1990s, as companies invested in the Field of Dreams notion that "if you build it, they will come," says Estrada. "But no one did, and most of the companies left abandoned fiber lines that weren't being used."
Today, with at least 43 states having some fiber lines already in place, according to the Fiber to the Home Council, Optical Entertainment and others in the industry are looking at ways to compete with cable operators that have "bundled" their cable, pay TV, phone and Internet services, Estrada says.
In Optical Entertainment's case, in December the Houston firm will launch its Fision fiber-to-the-home service that will deliver video, Internet and voice, as well as more than 400 video channels, that includes 50-plus channels of high-definition TV, video-on-demand, and original and specialty programming to the 10th-largest television market in the United States. In addition, Fision will offer high-speed Internet at 10 megabytes per second -- about eight times T1 speed, Estrada says.
The other upside to fiber, says Estrada, is that, like cable, it operates as a highway for programming to travel on. But, unlike cable, he says fiber "is an almost limitless highway. And the quality it brings is unlike anything out there right now"
Questions about cost
Not everyone, however, is jumping on the fiber bandwagon or expecting it to become a serious competitor for business.
Bill Gilliam, vice president of broadband services with Bright House Networks, says his company could do fiber-to-the-home, "but it doesn't make business sense."
"Financially, it would be costly, and we already offer 300 channels, Internet, phone, pay-per-view, and our current network hasn't been an issue for us," Gilliam says. "We're pretty happy with our business the way it is."
Even so, fiber is gaining some notoriety thanks to a recent satisfaction survey conducted by J.D. Power & Associates.
While cable operators scored, for the most part, "average" as far as overall satisfaction, satellite and fiber scored "among the best."
It was that survey and fiber's capability that caught Erickson's eye, he says. "The more I read about the industry and talked to people who were familiar with it, the more I realized this could be the next wave of carrier service.
"And, naturally, New Screen wanted to be part of it."
What's ahead
While a decision about whether to leave Orlando looms on the near horizon for New Screen, Erickson says the company is busy negotiating other deals to bring its content across the country.
He currently is talking with Pan American Satellite and SES Americom about uplinking content for distribution. Once the satellite negotiations are completed, Erickson says New Screen will have the capacity to uplink to all cable, satellite and fiber-to-the-home distributors in North America, part of the company's long-term goal of reaching 50 million paying households in the U.S. and abroad.
The good news, he says, is that New Screen is about six to nine months ahead of schedule, which has helped the company accelerate some of its other plans.
For instance, on Oct. 19, New Screen announced a new video-on-demand offering as a pay-per-view option that will be available in markets where it has affiliates with digital-based distributors. The VOD channel will be in addition to the basic cable New Screen channel.
"I guess we're in that be-careful-what-you-wish-for phase, because things are accelerating much faster than we hoped," Erickson says. "So we'll just hang on for the ride, because we want to be around for the long term."
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