September 13, 2011
Q&A With 3net CEO Tom Cosgrove
By Kaylee Hultgren
3D programming may have lost some of its initial buzz, but that’s not enough to deter the ambitions of the 24-hour, 3D channel 3net, which launched in Feb of this year. A joint venture between Sony, Discovery and IMAX, the network claims it will possess the most extensive library of 3D content in the world by year’s end. The channel’s obvious challenge is that only those with 3D-capable TVs, 3D glasses and—for the time being—DirecTV subscriptions, can access the content. Adoption rates notwithstanding, 3net CEO Tom Cosgrove isn’t worried. He chats here with CableFAX about 3D’s parallels with HD’s less-than-speedy rollout, 3net’s target audience (which includes decision-making moms) and the net’s upcoming distribution deals.
Currently your only distributor is DirecTV. How many people have access to the channel?
We’re available to anyone in the DirecTV universe who has a HD receiver/ HD DVR, which is roughly half of their overall footprint. And then of course, you know they have to have a 3D television to see it. There’s somewhere around 9 million potential homes that we’re available to. As it stands right now if you have an HD receiver/ HD DVR you have access to 3net.
Are you working on broader distribution?
Yeah, we’re in pretty serious talks with a couple of guys right now. I’d expect we would be announcing some things before the end of the year certainly. As those things go, talks are kind of ongoing. We do expect something to happen by the end of the year for sure.
The programming you’ve rolled out so far seems to appeal to sports fans, kids and fans of natural history. Do you have a targeted focus?
What we’re trying to do is appeal to who we think are going to be the early adopters of the technology. That’s a combination of things, but it tends to be a little more male, a little younger, a little more upscale—but also with some family appeal. We know kids are a big driver theatrically in 3D and have interest in it. We also know that the kinds of settings that were done in the early days of HD—documentaries, natural history—are going to be drivers in 3D.
We also know that mom, and the female in the household, has huge influence—if not the decision-making—over any of the big purchases in the house. So we know we’ve got to sort of please [that] audience, and that’s part of our mission. But at the end of the day, we’re really sort of targeting towards that early adopter demographic. There’s some similarities, in terms of the early days of HD.
What have you learned from looking at the adoption of HD?
We looked at it in a number of ways. The real encouraging thing that we’re seeing is that if you compare times from the introduction of HD and the introduction of 3D, and flash forward to where we are today, about a year and a half in on market, we’re running at 2 to 3 times the adoption pace. When HD came out it took a while for it to build interest and sales and all that. The good news is that while the sales figures aren’t quite what they were people were hoping they’d be 2 years ago at CES, they’re actually growing far, far faster than the early days of HD. So we’re really encouraged with where that’s going.
As we get in to the end of this year and the beginning of next year, the major set manufacturers—Sony, Panasonic, Samsung, etc.—for sets above 40, 42 inches, it’s really going to be part of most (if not all) of the models that are coming out. Some of the lower end and smaller sets may not have 3D, but once you get into the living room size sets, if you will, it’s not a choice you’re going to be making between an HD set or a 3D set. You’re buying pretty much both in that case. That’s good news for us because it’s really going to open up the potential platform size. It’s up to the content people, and the adoption rates of 3D content in general, to see how fast it grows.
How do the rollouts of HD and 3D differ? Other than the fact that people are adopting 3D quicker?
They’re replacing their sets quicker, which is another factor, too. People are holding their primary sets for a shorter period of time before taking it to the basement or the bedroom, which helps as well. Yeah I think there are some differences. If we flash forward 20 years from now, I think there will be a lot more HD channels than 3D channels. If you have the choice today between watching HD and an SD feed, more than likely you’re going to watch the HD feed. I don’t think the same is necessarily going to hold true in the future with 3D. I think we’re going to see distinct channels. I think when people have a choice between 3D and HD, if it's the same show (not that that’s very likely) I think that we’ll see people choosing 3D. But I also think we’re going to see distinct channels that are 3D, and we’re going to see others that don’t go that way. 50 years from now, I don’t know. But I think in the next 5 to 10 years, that’s the pattern we’re going to see. Whereas in many ways HD started to replace SD, I don’t think 3D is necessarily a replacement for HD. I think it’s a different experience.
In what ways is building up your 3D content part of your strategy to get more people on board? And what are your challenges?
One of the big issues—and there’s been a couple—honestly, there’s been some people who are resistant to wearing glasses. Although, I think increasingly we’re seeing less of that. We’re seeing research among people who have actually bought them that it’s not an impediment to watching 3D, but there’s some push back against that. The other one is the obvious one I think. There just hasn’t been enough content to motivate 3D, get interested in 3D, buy a set, whatever. So yeah, I think we’re a crucial part of the adoption mix for the industry at large, because without content there’s not a whole lot you can do with it. I think part of our strategy is to be out there with a wide variety of high-quality, really high-end, the kind of content you’d really expect from companies like Sony, Discovery and Imax. But yeah, we’re a channel, and channels have appetites and volume needs as well. So definitely, that’s part of the strategy.
We hope that we, along with others who are already in the market or planning to come in the market, that all that content combined is going to help get people to understand that it's a great technology, but also a great creative tool—a great way to tell stories.
How does the partnership with IMAX and Sony help you to do that?
There’s a couple things. Sony is obviously out there in the electronics business and they’ve been a big help with us in terms of getting the word out on our channel specifically, as well as 3D generally, in retail, professionally within the production community, Sony has had a huge role in training DPs, directors, and those in the profession to understand how to shoot 3D, how to make content in 3D… [It] put roughly 1,500 people through the classes at the Culver City lot. Part of what IMAX brings is the library. Some of the films that were out theatrically are either on or coming to 3net. They also bring a lot of expertise. These guys have been doing for as long as anyone can remember. They know how 3D works, they have a lot of technical expertise, so we’ve mined the resources with IMAX quite a bit. Discovery obviously knows channels and content, knows how to do this and has history with similar things, like launching HD. And all of them bring some really strong brands behind them.
How do you see 3D programming fitting into TV Everywhere models?
It’s generally to be seen where all that will fit in. I don’t think we know quite yet generally how that’s going to roll out, much less with 3D, so I’d be hesitant to say yet where it’s going to head.
How much of your program is shot with 3D technologies?
Just about everything we do originally. Any commissions or co-productions that we’re a part of were all shot natively in 3D. We haven’t gone down the path of conversion yet. There are some high-end theatricals that have some conversion in them, but for the most part we haven’t seen a television model that makes a lot of sense, where we get quality that’s indistinguishable from native 3D, at any kind of price point that makes sense. We’re not opposed to it. If it comes around and we see a technology that can really work, great. But so far we’ve seen that what we’ve done natively looks better, is designed for 3D—you have to sort of craft your shots and how you approach things with 3D in mind. If you just simply take something that was shot in HD years ago and convert it, you’re going to run into trouble. So we’ve really stuck to doing everything natively in terms of our commissions and co-productions, and probably will for a while. Just because we think that's the way to get the highest quality out there.
So it’s a lot more expensive up front.
It’s not cheap to do 3D. Not cheap at all. I’ve been at the channel now close to a year. We’re been on the air for  months, and in that time we’ve seen some efficiencies, certainly. There’s been equipment that’s come out that’s made things a little less expensive, whether you’re talking about in production or post-production, but it’s still a more expensive process, a more time consuming process, particularly in post. When you’re in production, no matter what, you’re always going to be dealing with twice as many cameras. That won’t go away. We’ll see, as we did with HD, cost come down. But I don’t think we’ll ever see them come down at parity, just because it is, and probably always will be, a little more technically challenging and time consuming.
Do you see yourself in competition with ESPN 3D?
No, not really. I think we’ve talked a lot—I know those guys, they know us. I think at this stage in the game, we’re happy that they’re there, and they’re happy that we’re here. We’re part of a few different ways of getting content out there, and getting people to understand that they’ve got these devices and now they have some great content to watch on them. So as far as I’m concerned, I’m happy that they’re there. I watched the Little League World Series in 3D and I thought it was great. I know Bryan Burns [vp, Strategic Business Planning, ESPN] has been watching some of our stuff, too. I think right now it’s friendly competition and we’re glad that each other’s out there pushing 3D.
The special you just announced, Skeleton, Inc., follows a family-run business that turns animals and human bodies into skeletal art. Why does it work for 3D?
There’s 3D the technology and there’s 3D as the story-telling device. We’re looking for great stories with great characters and we’re also looking for things where we think 3D can really enhance those stories and characters. I’d be hard-pressed to find a more bizarre and unusual family business than what these folks do. But at the same time, it’s something that’s necessary. All of us have experienced the benefit, [if you’ve] been to a museum. It’s among some other things we’re doing at the channel that explore those worlds and experiences that people may have not seen before, or have not been able to see, with clarity and the experiential nature that 3D can bring. This is one that really stood out from the crowd. It’s fascinating and maybe a little gruesome at times—a look at a world we didn’t know existed.
How does 3D enhance the story?
It’s the process itself, taking these animals down to their skeletons, essentially, and seeing that process throughout. With the particular case in the special we did, this lion that was found. Seeing it in its original glory, and seeing it through the process, where we end up—what you would typically see in a museum. It brings you in to the experience in a much more intense way. It pulls you in and enhances it. You’re watching with eyes wide open and then shutting them as fast as you can, and I think that’s part of what we’re trying to exude—pulling people in, and capturing them using 3D as a creative tool, to heighten that immersion and experience that you get watching television.