A Bigger Screen for Mark Cuban

STEVE LISS FOR TIME
Cuban has five high def TVs in his suite in the Mavs arena

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The Mavs have the broadest international following of any NBA team. Cuban signed the NBA's first Chinese player, 7-ft. 1-in. center Wang Zhizhi, and the first French player, Tariq Abdul-Wahad, as well as Canadian Steve Nash and Mexican Eduardo Najera. Fans across the world tuned into the first webcast of an NBA game last April and can get game previews at dallasmavericks.com in four languages: English, Spanish, German and Mandarin Chinese. Three times as many people click on the Chinese section as on the English one.

Former NBA star Bill Walton, now an NBC sports analyst, says that for all the attention Cuban receives for barking at refs, "the suggestions he makes have spurred the NBA to move in a better direction in television, marketing, ticket pricing. He's in the forefront." And while NBA commissioner David Stern has levied huge fines against Cuban, Stern says, "we've had open and good discussions about refereeing." He adds, "Mark very presciently focused on the whole issue of audiocasting on the Internet, and it would not surprise me if his HDTV venture wasn't equally prescient."

Cuban scoffs at the idea that he has done anything innovative. "I've brought a sales focus," he says, shrugging. Cuban has even done radio promotions for a weight-reduction system and a local tanning parlor to help close a deal for ads on broadcasts of Mavericks games. Cuban threatens to fire anyone on his sales team who boasts of the Mavs' winning record, arguing that NBA basketball is not about winning so much as entertainment. That includes the usual dancers in skimpy outfits, kids competing in free-throw contests and goofy advertiser promotions during time-outs--all backed by throbbing music, often suggested by the boss. He plans to install a wireless network so fans can bring their laptops and download images and stats during the game--or perhaps just instant-message the cute guy in Row 9.

Cuban attends most games, and fans pester him for autographs. At the Mavs' main office, Cuban works at a desk clearly visible to customers by the front door. He posts his e-mail address (mark.cuban@ dallasmavs.com ) on the scoreboard and answers complaints immediately.

When Cuban bought the team two years ago, he called FoxSports Network president Robert Thompson seeking to broadcast Mavs games in high definition. Thompson was dumb struck. "I said why would I want to do that?" At the time, there were no trucks for HD transmission, no distribution channels, and the costs were off the charts. "But he did pique my interest."

Thompson introduced Cuban to a Fox production specialist, Phil Garvin, who helped him solve the technical and financial obstacles to HDTV broadcasting. "With regular TV, you pull a truck up to a stadium, hook up to existing cables from every camera to the truck outside and transmit," he says. "But there were no cables for high def, and the setup was expensive." Sony had to create a new cable system for the five HD cameras needed for each game. By piggybacking on FoxSports' regular NHL broadcasts and using its graphics and audio, Garvin and Cuban got the network running in 15 months.

In exchange for their help, Fox and DirecTV got options worth as much as 20% of Cuban's new network. For Thompson at Fox, HDNet is a handy "laboratory" to see how high def works, technically and economically. "If you've seen high def, you know it's gorgeous," says Thompson. "But I was skeptical of the financial model. They need to go well beyond 100,000 homes." Cuban says his customer base through DirecTV is growing 10% to 15% a month, and he's working the retail angle hard--getting 1,000 outlets such as those of Circuit City to play HDNet in stores.

Meanwhile, the price of digital TVs and set-top boxes is dropping fast. A 50-in. high-def TV set that cost $8,000 two years ago is now $1,800 and could drop further by Christmas. Prices of the set-top decoders necessary for high-def reception are falling too, to $250 from $750 in 2000. (Samsung, Zenith and Sony are making TVs with built-in high-def tuners.) The Consumer Electronics Association says February shipments of such digital-TV products were up 83% over the same month last year, largely in anticipation of NBC's Olympics broadcast and HDNet's NCAA March Madness.

By year's end every commercial TV station is supposed to be broadcasting digitally, with all analog transmissions to cease by 2006. But with more than half the nation's stations seeking delays, FCC chairman Michael Powell this month went on the offensive (right before a critical broadcasters' meeting), urging networks, broadcasters and equipment makers to rush digital-TV offerings to consumers by 2003. "I agree with Cuban that HDTV is inevitable, but it will take 10 years," predicts Gerry Kaufhold, In-Stat's principal analyst for digital TV. The savings of all-digital production will win out, especially because such influential directors as George Lucas have vowed to dump film. "By September 2003, most TV programs will be produced in HDTV, so sales of set-top boxes should kick into gear. By 2008, more than half of new sets sold will be high def," says Kaufhold.

Networks and cable channels are moving cautiously ahead. CBS, the HD leader, records almost all its prime-time shows in high def, and ABC about half. NBC lags far behind. Entrepreneur Paul Allen has his own high-def channel, ASCN, based in Portland, Ore. HBO (owned by TIME's parent company AOL Time Warner) and Showtime provide high-def programming to satellite-TV subscribers.

Now that HDNet is on satellite, Cuban is hoping to hawk his network to cable companies, which reach two-thirds of the nation's viewers. Cox Cable announced in March that it would start delivering high-def shows from the major networks. Comcast launched HDTV last November, while Time Warner Cable offers it in 42 markets, from New York City to Houston.

Garvin, a TV producer for nearly 30 years, is amazed at the turnaround on HDTV. "A year ago, we were way out front. No one else was at the table. Suddenly, in the past month, cable operators, the Comcasts, the AOLs, Charter have all decided it's time to get high def into homes," he says. "It's starting to look like Mark may have hit another home run."

Home run? That's not the right metaphor for Cuban, who at 6 ft. 2 in. is about the size of a smallish NBA guard. He would probably prefer to think of himself as launching a shot from outside the three-point circle and hitting nothing but net.