Converging in Las Vegas last week for the 56th annual National Cable & Telecommunications Association (NCTA) show, cable executives had the swagger of high rollers. Flush with some of the best financial reports in years, cable operators touted innovations in broadband and video-on-demand (VOD) as a sure bet to propel them ahead of their satellite, telco and new-media competitors.At panels extending over four days—under the theme “Competition works. Consumers Win”—executives asserted that co-axial cable will continue to be the dominant distribution platform.
Time Warner Chairman/CEO Dick Parsons—whose company's cable division recently reported 61% year-to-year revenue growth—praised cable's dominance in broadband and its so-called quadruple play of bundled high-speed data, telephony, TV and wireless.
“The cable platform is one platform that can take advantage of all of this digital technology—Internet and broadband capacity—to deliver voice, compelling video and data, and it's just all going to get better going forward,” Parsons said. “We are making sure that our platform is enhanced, our technology is capable, and it's robust to take advantage of this platform.”
Broadband as growth engine
Both Parsons and Comcast CEO Brian Roberts cited broadband service as a growth engine. Harking back to a similar speech on broadband he had given at the 1996 Cable Show, Roberts pointed to the new super-fast “wideband” modem as evidence that “cable will continue to set the high watermark for quality and value in the entertainment and information age.”
He demonstrated the modem by downloading a 300-megabyte commercial in 17 seconds. (The same download would have taken 16 minutes on a standard cable modem, the product he demonstrated a decade earlier.)
Comcast also used the show to unveil its SmartZone communication center, a new unified messaging service that works across product lines. SmartZone will allow Comcast customers to send and receive e-mail and will enable high-speed Internet users to check voicemail if they subscribe to Comcast Voice.
Comcast and others highlighted the growth in VOD from its origins as a value proposition to keep customers from defecting to satellite. With traditional ad-supported, linear television under attack from time-shifting, ad-skipping digital video recorders (DVR), cable has raised its game through new add-ons to VOD services.
Time Warner Cable President/CEO Glenn Britt hyped the company's new Catch-Up service, which enables subscribers to access recent episodes of current TV series yet disables the DVR's ad-skipping capability. Comcast COO Steve Burke, meanwhile, praised his company's day-and-date distribution of movies on VOD.
“My sense is that [VOD] goes all the way,” Burke said. “Eventually, not only will you have primetime television shows that you can go back and catch up with, but eventually on your TV set, you will get virtually everything or maybe everything on TV when you want it.”
Several programmers announced intentions to launch new VOD channels, including CSTV, which is planning channels dedicated to local high school sports.
In a general session titled “State of the Union,” top executives from Time Warner, Comcast, News Corp. and Viacom described projects their respective companies had launched to capitalize on new technology and increase growth.
“This is a world in which the big get bigger,” said News Corp. President/COO Peter Chernin. He noted the online video player his company will launch with NBC in September and said his company will likely acquire more Internet upstarts.
Getting in synch on new media
While programmers were represented on a few panels about putting content onto various platforms, some lamented that cable networks weren't as high-profile as they could have been during the show.
“[Cable operators] are operating on a different business plan than we are,” said Oxygen Media Chairman/CEO Gerry Laybourne, who co-hosted the Cable Show last year. She voiced concern that operators emphasized new digital products over the networks that have long helped them establish and market their services.
But Viacom CEO Philippe Dauman said operators' broadband service enabled them to have “deeper conversations” with programmers like his company.
Michael Snyder, senior VP, affiliate marketing, Discovery Communications, agreed, noting that “operators and programmers really seemed in synch on cracking the code on new-media models.” He also said there was “palpable excitement” at the show for new broadband opportunities with advertisers and an understanding among operators and programmers that digital initiatives are additive to viewing, not cannibalizing.
Indeed, the Cabletelevision Advertising Bureau, hosting Cable Show panels for the first time, unveiled research showing that viewers are more tolerant of advertising in a traditional TV setting than they are on other video devices. With average TV viewing up to a record 31 hours per week per person, the finding suggests that disseminating video content on digital devices only builds viewers' interest in traditional TV.
ABC and ESPN made the biggest content-related announcement at the show, previewing a trial with Cox Communications that would offer the operator's subscribers the most popular shows from both networks on-demand while preventing fast-forwarding through commercials.
Also front and center were regulatory issues as FCC Chairman Kevin Martin and NCTA President Kyle McSlarrow traded barbs on government intervention in the video-programming market.
Martin voiced his support for à la carte pricing of cable networks and multicast must-carry regulation.
The next day, McSlarrow argued that supporting both was a contradiction: “You can't insist that every channel be sold separately and then require that other programming be added to the expanded-basic tier.”