Cable Show ’08: Cable ‘Goes on Offense’
Cable Operators Building State-of-the-Art Broadband-Wireless Network for Quadruple Play, Going Interactive with tru2way, Eying Targeted Advertising
By Robert Marich -- Broadcasting & Cable, 5/18/2008 9:21:00 PM
New Orleans -- Cable-industry leaders delivered a simple message at Sunday’s opening general session of The Cable Show ’08 here, with an estimated 14,000 attendees: The industry is “going on offense” even as competition mushrooms.
Cable operators this month unveiled a plan to build a state-of-the-art national broadband-wireless network that will add mobile to cable’s triple play to make a quadruple bundle, an interactive TV-industry platform just launched and cablers have a hush-hush research-and-development effort to sell targeted advertising.
“We are playing offense,” National Cable & Telecommunications Association president and CEO Kyle McSlarrow said. “When it comes to TV, cable invented choice and competition, and that hasn’t changed.”
MSOs Comcast, Time Warner Cable and Bright House Networks joined with Clearwire, Intel, Sprint Nextel and Web companies for a built-from-scratch wireless broadband network.
“This feels really right,” Comcast chairman and CEO Brian Roberts said of the Clearwire venture. “We’ve got a number of companies that want to see the fastest data network in the world built and get it built fast.” Sprint will provide consumers service in areas that the built-from-scratch network does not cover.
In another offensive initiative, the Cable Television Laboratories consortium’s tru2way creates a common platform to inject Web-style interactivity to cable TV via new-generation hardware and software. “It’s very significant not only to the cable industry, but the consumer-electronics industry,” Panasonic North America chairman and CEO Yoshi Yamada said.
Finally, the cable industry is quietly exploring technology to marshal vast numbers of locally targeted ads via a network of national ad buys. This initiative was alluded to by Roberts, although no details were provided on what is code-named Project Canoe. Presumably, this will deliver unsold local cable commercials via an automated system.
On other fronts, Roberts added an effort now underway to reclaim analog bandwidth that can be repurposed for more efficient digital applications. He noted that this rebalancing of infrastructure will cost the cable industry under $5 billion, which he sees as a bargain, given that an industry upgrade of plant capacity years ago was a $100 billion endeavor.
News Corp. president and chief operating officer Peter Chernin got nodding agreement from other panelists when he said the challenge in managing his company’s Fox content is not to figure ways to protect incumbent cash-cow distribution methods, but instead to hatch “forward-thinking business models” that work for consumers.
“You better build new business models faster than the old ones erode,” Chernin cautioned, saying not to do so means “extinction.” He cited as an example Fox Broadcasting cutting the ad load in half on two new-season shows, which addresses viewer complaints about over commercialization but also the need to attract higher ad rates to succeed.
All of the panelists professed not to be overly worried about the weak economy, saying their businesses are holding up well. “I believe all of us here will be recession-resistant” though not recession immune, Viacom president and CEO Philippe Dauman said.
For more on The Cable Show ’08, click here.
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I would caution my cable colleagues to carefully monitor consumer attitudes concerning over the air DTV. I am reading lots of consumer comments on the blogs and on retail sites (such as Best Buy's DTV converter box product reviews) about viewer amazement at perfect DTV pictures (and "free" HDTV) delivered by broadcast stations. The temptation to churn will increase as 24-hour news channels come on line from broadcasters. Cable should be re-tiering, offering a low-cost news/info/broadcast station tier (with HDTV broadcast signals) as a competitive hedge against the 5-10% of older customers who signed up "for the reception" and may be tempted to churn as the economy worsens. If cable doesn't address the potential impact of DTV and a worsening economy, its bottom line will suffer. The recent rise in cable stock prices could be a lagging indicator.
Victor Livingston - 5/18/2008 11:35:00 PM EDT -
Sprint overcharged our small company over $50,000.00. We caught them and asked for the over-payments to be refunded. they have refused. Read the full story on www.sprint-really-sucks.com
Allen Harkleroad - 5/18/2008 9:15:00 PM EDT
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