REPORTER'S NOTEBOOK: Cable Show Shows Effects Of Economy
April 03 2009 - 8:10PM
Dow Jones News
Cable executives chose the nation's capital as the site of their
largest annual gathering this year even though they're in an
industry that doesn't need a bailout.
The cable industry has held up better than its media peers. In
tough times, consumers are watching more, and seemingly unwilling
to give up cable TV or high-speed Internet,
"The cable programming side has remained somewhat insulated
[from the economic downturn]," said David Zasloff, chief executive
of Discovery Communications Inc. (DISCA). "Our pricing is lower,
and in many cases our ratings are going up."
Nevertheless, the cable industry has seen better days, as was
evident on the floor of the Cable Show, hosted by the National
Cable & Telecommunications Association this week. The crowd was
sparse, the mood subdued and the exhibitions less lavish than in
years past.
Philippe Dauman, chief executive with Viacom Inc. (VIA), summed
up the mood, saying, "We have to plan for the possibility that [the
economy] will continue to be bad for a very long time."
Cable Next?
The economy wasn't the only issue on cable executives' minds.
Another common concern: How to prevent the industry from succumbing
to free Internet content the way the music, publishing, radio and
television industries have.
The mantra repeated by nearly every convention speaker was that
cable has to provide consumers with "what they want, where they
want it, when they want it on whatever device they want." Sounds
great. But reaching that goal in the digital age presents a host of
problems.
First and foremost: Consumers have grown accustomed to getting
lots of free information and entertainment online, a dynamic
offering few promising business models.
"We have to be careful about making sure that we don't train
people to watch [our content] on platforms that are going to put us
out of business," said Zasloff.
Still, there were reasons to be optimistic. Most consumers get
online content through a broadband connection, a service usually
provided by a cable operator. That, said Comcast Corp. (CMCSA)
Chief Executive Brian Roberts, is the industry's "ace in the
hole."
TV Everywhere
Executives also said the industry needed to contend with the
convergence of broadband and TV. Their concern: As online
video-watching gains popularity, consumers may decide they don't
need a cable TV subscription anymore.
"For many homes, broadband is more important than video," said
Time Warner Cable Inc. (TWC) Chief Executive Glenn Britt. "You can
see what might happen in the future."
On Thursday, Time Warner Inc. (TWX) CEO Jeff Bewkes presented
his fellow moguls with a preemptive solution. Bewkes is pushing the
industry to collaborate on a system that would preserve
subscription revenue for TV service operators and networks by
allowing programmers to make video content available online, a
system he calls "TV Everywhere." It would work by letting viewers
confirm through a secure Web authentication system that they
subscribe to a pay TV service.
Viacom's Dauman, who voiced support for the concept, said the
issue was more complex for broadcast networks that are largely
dependent on ad revenue and don't want to risk a public backlash by
requiring viewers to pay for content they previously got for
free.
"We put out a lot of content online," said Dauman, noting that
TV ratings for "The Daily Show with Jon Stewart" have climbed even
as the show has been available online on sites like Hulu.com. "You
do get incremental monetization if you do it right."
-By Nat Worden, Dow Jones Newswires; 201-938-5216;
nat.worden@dowjones.com