Rupert Murdoch wasn't at the final Western Show last week, but the News Corp. chief was very much on the minds of MSO executives gathered in Anaheim, Calif.
As Murdoch closes in on his acquisition of the nation's largest DBS company, DirecTV, the cable industry is taking the offensive, trumpeting its advantages over the likes of DirecTV and EchoStar Communications' Dish Network. When he takes control, pending government approval, industry executives expect his team to fiercely market and advertise. There's also talk of DirecTV's giving out free digital video recorders (DVRs), although that could be a costly and daunting upgrade.
Murdoch, cautioned Cablevision Systems President Tom Rutledge, "is an excellent programmer. We don't want to underestimate him."
DBS has already built a huge customer base. DirecTV counts about 12 million subscribers, and Dish Network claims another 9.1 million customers.
Appearing at the Western Show, a sleepy affair with 6,150 attendees, MSO chiefs said DBS can't match the "super duper cable triple play," as Time Warner Cable Chairman and CEO Glenn Britt described it, of telephony, video and data services. Other services like video-on-demand, low-cost DVRs and more HD capacity sweeten the proposition.
DBS might have rolled out digital first, but, said Charter Communications chief Carl Vogel, a former president of EchoStar, "cable has caught up and gone past that."
Of course, cable executives conceded, the DBS companies have an upper hand in marketing and advertising, largely thanks to their national footprint. But cable is fighting back. CTAM, for example, is assisting the MSO effort with generic ads touting cable over DBS. Individual operators can tag the spots, the way local automobile dealers do.
National Cable & Telecommunications Association head Robert Sachs chided EchoStar chief Charlie Ergen for his company's new "Stop Feeding the Cable Pig" ad campaign. Ergen suffers from "broadband envy," Sachs quipped, before urging him to quit "wallowing in the mud."
MSO chiefs were less eager to talk about the thorny issue of sports programming. With the industry's most vocal opponent, Cox Communications chief Jim Robbins, a no-show, other executives offered more-tempered opinions.
Comcast President and CEO Brian Roberts, whose company also owns teams and regional sports nets and announced a new one in Chicago last week (see page 4), called paying for sports programming the industry's "the single most vexing issue," one he doesn't expect to see resolved soon. Still, he added, sports "is live original content. You're trying to give the customer what they want, when they want it and do it in a responsible way."
The final Western Show provided a curtain call for California Cable & Telecommunications chief Spencer Kaitz, whose father started the show more than 30 years ago. Just three years ago, attendance was 30,000. Kaitz is expected to retire from the CCTA next year. Top MSO executives and affiliate sales chiefs from major cable nets, including Fox Cable, Discovery, ESPN and Lifetime, turned out. (The only programmers on the show floor, though, were startup Reality Central, which used the show to introduce industry veteran Kay Koplovitz as its new chairman, and Starz Encore Group.)
NCTA's Sachs, however, assured the crowd that the industry will continue to gather out West. The NCTA's National Show will head out to San Francisco in 2005 and then Las Vegas in 2007.