PORN SENT PACKING

Cable entrepreneur Bill Bresnan is dropping all adult programming from the former AT&T Broadband systems he bought earlier this year from Comcast. “This isn’t something new, it’s consistent with what Bresnan Communications has done in the past,” says Jodie Rees, the company’s recently hired VP of marketing. “Since the founding of our company, it’s been our policy to not carry programming that was specifically designed for adult-only entertainment. We believe this policy decision is in line with the values of the communities we’re serving.” Starting after Labor Day, its 314,000 subscribers in four states will lose access to up to six networks from Playboy Entertainment Group: Playboy, Spice, Spice 2, Hot Choice, Hot Network and Urban Extra. “It’s a disappointment, but it’s entirely up to Bresnan Communications what programming they carry,” says Craig Simon, SVP of sales and affiliate relations for the Playboy Entertainment Group. Bresnan’s move may be morally bold but it could also have financial consequences. Adult content is one of the strongest revenue-generating machines for a video distributor. “Adult VOD and PPV via digital cable are both doing really well for the industry,” says Kagan World Media analyst Deana Myers. “Adult has one of the highest profit margins for operators.” For instance, a system with 100,000 cable subscribers that carries four adult networks provided by The Erotic Networks may average around 36,000 buys, says TEN president Ken Boenish. At an average cost per adult film of $8.99, that’s $323,640 in gross revenue a month. The system could keep 75% to 90% of that, depending on the deal it cuts with TEN. Playboy typically takes a larger revenue cut than TEN does. Playboy officials would not comment on the potential revenue loss for Bresnan or for Playboy. Revenue grew to $23.8 million for Playboy’s domestic TV unit in the second quarter of this year, slightly above the $23.4 million for the same period last year, due to increased buys of more explicit content and its new deal with Adelphia Communications. Under the Rigas family Adelphia never carried porn, but its new management team introduced it earlier this year, with Playboy rollouts kicking into gear in the second quarter. Playboy has provided a strong uptick in Adelphia’s pay-per-view revenue this year and is now rolled out across most of Adelphia’s digital subscriber base, says Adelphia spokesman Paul Jacobson. Bresnan is not only saying goodbye to potential profit — his subscribers are being lured by racier fare from satellite TV. Satellite providers offer a wide range of adult content, from soft-core pornography to more explicit programming. EchoStar may even launch a new adult content channel, the Private Fantasy Channel, in the fourth quarter, according to two adult industry sources. EchoStar wouldn’t comment on any negotiations but said there is no carriage agreement to date. Spain-based Private Media Group, which announced Friday the launch of the dubbed pay-per-view Private Fantasy Channel, expects carriage on an undisclosed distribution system of between 5 million and 15 million subscribers early in the fourth quarter, said president Charles Prast. EchoStar has more than 8 million subscribers. Whether it goes to EchoStar or not, Bresnan subscribers won’t be able to choose the Private Fantasy channel or any other adult content — one more temptation for a rural cable subscriber to switch to satellite. Mediacom Communications, another rural-focused operator, lost 24,000 subscribers in the second quarter primarily to aggressive discounting and local-to-local offerings by satellite competitors. Bresnan’s decision to get out of the adult content business comes just as it is spending big money on system upgrades, including upgrades to 870 MHz that began last month in its Butte, Mont., system (a $4 million investment) and its Bozeman and Belgrade, Mont., system ($7 million). Scheduled to be completed by the middle of next year, the No. 13 MSO’s total upgrade plan is expected to cost $200 million. Eliminating adult content, which is only available on a pay-per-view basis, has nothing to do with consolidating head-ends as it upgrades systems. It is simply in keeping with Bill Bresnan’s long-standing opposition to adult programming. Bresnan’s decision to drop porn is not the only change. It is also moving C-SPAN and C-SPAN2 from expanded basic to basic. That means that the Weather Channel and the TV Guide Channel (plus other networks such as Fox in some systems) move from basic to expanded basic.