Friction Over Costs Casts Pall Over CTAM

As hard as they tried to stay focused on the nuts and bolts of pushing cable products, marketing executives at last week's annual CTAM Summit in Seattle couldn't keep away from the industry's hottest topic: operators' growing annoyance at the high cost of cable networks.

The rising friction between cable operators and programmers cast an awkward pall over the annual convention of the Cable & Telecommunications Association for Marketing, because marketing is the place where systems and networks are intensely co-dependent.

Co-dependence, though, creates dysfunction. "There are some very serious problems in parts of our relationships," warned Insight Communications CEO Michael Willner. In particular, he cited "vertical integration," a reference to media giants that use rights to retransmit their broadcast stations as a weapon to jack up license fees for their cable networks.

He raised the prospect that rising political pressure could spur a return to rate regulation. "We're going to have to deal with those things, or we're going to have people outside our industry dealing for us."

But attendees spent much more of their time in Seattle discussing how to better sell cable's array of products.

RealNetworks CEO Rob Glaser emphasized that cable operators need to add features to distinguish their high-speed Internet service from telephone companies' DSL service or risk becoming a commodity product. Of course, what he wants is for operators to package his RealOne online video and audio programming into their Internet products.

Attendance met CTAM's target, drawing 2,361. That's down slightly from last year's 2,400 and even further off the group's peak of 2,938 in 2000.