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