Discovery Communications’ investment in the 3D-based 3net is...
Discovery Communications’ investment in the 3D-based 3net is “cash-flow neutral” to Discovery, but the channel’s annual programming has been trimmed to 30-40 hours, about half the original plan, Discovery Chief Financial Officer Andy Warren told us. Verizon’s FiOS has provided…
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the primary distribution for 3net with access to 2 million subscribers, while DirecTV has kept it on a lower programming tier, Warren said. The channel’s future may hinge on the availability of glasses-free 3D, Warren said. “If it’s cash-flow neutral to us, we are happy to wait and see,” Warren said. “We don’t put a lot of money behind it because we are not so sure of the progress in glasses-free that we're going to lose money on it,” he said. “My imperative was cash-flow neutrality, so we decided to manage” 3net with less programming hours. The channel began in 2011 as a partnership involving Discovery, Imax and Sony. Meanwhile, the Oprah Winfrey Network (OWN), which Discovery operates in a venture with Oprah Winfrey’s Harpo Productions, has turned cash-flow positive with more than $100 million in annual subscription fees and $200 million in total sales, Warren said. OWN is available to 70 million cable and satellite subscribers, with an option to go above 80 million, Warren said. OWN launched in January 2011, but by May 2012 had lost $330 million, industry officials have said. The channel responded by increasing its carriage fee -- it had been free for the first two years -- to be more in line with basic cable.