Discovery Communications (Nasdaq: DISCA) didn't have to look far to find someone to head up its joint venture with Sony (NYSE: SNE) and IMAX (Nasdaq: IMAX) to create the first round-the-clock cable channel dedicated to 3-D programming.
Discovery executive Tom Cosgrove, who recently served as Discovery Channel's COO, will serve as the new network's president and CEO.
This is an unusual situation. The three companies jumped on the 3-D bandwagon before the first 3-D capable television sets hit the market. Their partnership was announced in January, but ultimately finalized last week. Cosgrove's appointment went public last night.
The network represents a surprisingly good fit between the three different companies. Discovery owns several cable networks, including Animal Planet, TLC, and its namesake Discovery Channel. Sony has choice seats in both content creation, through its film studio, and delivery, through its high-end Bravia high-def televisions. IMAX is the fast-growing provider of giant-sized cinema, but it was screening museum-worthy 3-D documentaries before they were even cool.
(… They are cool now, right?)
However, all three companies are ultimately at the mercy of manufacturers' success in rolling out attractively priced sets with 3-D functionality. Even then, they'll still need couch potatoes to pay up for the extra dimension, and not feel inconvenienced by strapping on the 3-D glasses.
The network shouldn't lack for content, at least. Studios have been beefing up their theatrical releases in 3-D since the record-breaking success of News Corp.'s (NYSE: NWS) Avatar. Exhibitors are drooling. AMC, Regal (NYSE: RGC), and Carmike (Nasdaq: CKEC) jacked up the premiums that they were already charging for 3-D screenings three months ago.
In other words, the box-office mavens have educated the popcorn-munching masses. 3-D is cool, and worth more than 2-D. The real test will now be whether consumers mind paying a markup for the first generation of 3-D-capable televisions at their local consumer electronics superstore.
After all, it doesn't matter how great the Discovery-Sony-IMAX channel is if there aren't enough homes that can tune in to truly appreciate the 24/7 in-your-face content.
Cosgrove faces an exciting challenge -- yet one that lies mostly out of his control.
