Mark Cuban

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L.G.: Why the resistance from Comcast and Cablevision? How many viewers are actually watching HDNet programming? Where do you see HDNet in five years? And five years from now, will Dan Rather still have his own show on HDNet?

M.C.: I don’t have exact viewership numbers; no one does. But where we are rated in and around L.A., we often, if not usually, have a bigger share of the HD viewing audience than the other networks: ESPN, Discovery, TNT, Universal, MTV, HBO, Showtime, Cinemax, and sometimes even more than the broadcast networks on weekends.

We plan on continuing to have great programming that people love to watch and growing our subscription base.

We are the only individually owned network available today. I think that puts us in a unique position. Sure, it’s tough competing against huge conglomerates like G.E. and Comcast-owned programming for carriage. No question they have the leverage and use it. But our viewers love us and we think that still counts for something, and fortunately we have great partners like DirecTV, Dish, Time Warner, Charter, Verizon, etc., that have happy HDNet subscribers because of our partnership.

And yes, we hope Dan Rather continues with Dan Rather Reports for another 100 years.

L.G.: How much of your time do you spend on—and how big an investment have you made in—2929 Entertainment?  Why movies? Why low-budget art-house movies? Are you in it for fun—and hanging out with George Clooney—or profit?

M.C.: Most of my time is spent on HDNet and the original movies that HDNet makes or buys for our unique Sneak Preview program (where we release movies to our HDNet subscribers and our partners up to two weeks before they are in theaters).

We have a vertically integrated entertainment company. We make movies; we show them in Landmark theaters; we show them on HDNet; we release them through our own DVD company, Magnolia Home Entertainment, and distribute them through Magnolia Pictures. Being vertically integrated gives us the unique opportunity to distribute our movies how and where we want to.

And low-budget? You need to do some homework. Have you seen Akeelah and the Bee, We Own the Night (which comes out October 12), Good Night, and Good Luck. We don’t make dumb-ass budget movies like some people. We make great movies at the budgets that give us the opportunity to make money.

L.G.: Has buying a distribution company and a chain of 57 theaters worked out well thus far?

M.C.: Yep. They are making money, and they give us the unique opportunity to control our product. No other studio can do a nationwide sneak preview of their movies like we can because no other studio owns a national theater chain. No network other than HDNet can offer Ultra V.O.D. [video on demand], where we allow our V.O.D. partners to sell movies two weeks before they are in theaters. Only HDNet can offer a sneak preview of a movie the Wednesday before it’s released in theaters.

The ability to offer consumers what they want is a great opportunity for us. If any other studio tried it, the other theater owners would boycott the studio in a heartbeat.

L.G.: And have you found customers willing to pay $30 (or more?) to see new releases on their HDTVs instead of $10 in see them in theaters?

M.C.: Yes. We give them a choice. If you have to hire a babysitter, pay for parking and then the movie, the $19.95 we now charge is cheap. If you want to go on a date and get out of the house away from the kids, then seeing a movie at a Landmark Theatre is a great date experience for grownups.

L.G.: In 2002, you criticized Yahoo  for having a bureaucratic, “consensus-first, action-second” culture that stymied the company’s success with Web TV shortly after you and Todd Wagner sold Broadcast.com to Yahoo for $5.7 billion. But you seemed optimistic about the company’s potential with a change in management. What’s your assessment of Yahoo’s performance and strategic direction in the five years since then? What were Terry Semel’s successes and failures? And what do you think Yahoo’s future holds?

M.C.: I have no idea. Jerry Yang is a smart guy, so if anyone can do well, he can. I think Yahoo’s real problem is that they are being compared to Google. Used to be that companies struggled in comparison to Yahoo; now Google is the top of the heap. At some point it will be someone else.

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