No one in the television business refers to TV sets and other home reception and viewing devices as "CPE." But in the telephone companies' first assaults into the TV industry during the 1990s, we often heard that term--short of "consumer premises equipment"--as the veteran telco managers tried to grasp a role in video distribution to the home.
CPE was a legacy of the long-dead telephone monopoly, when engineers and economists had full control over the entire technical operation, from the central office through the phone devices (usually black and definitely corded) on bedroom nightstands and kitchen walls. CPE may be an accurate description of the TV sets and set-top boxes, but it was not a familiar phrase to TV manufacturers, retailers or anyone else in the video value chain. No one at Best Buy or Circuit City was selling TV sets as CPE.
I'll be listening for that archaic reference during Telecom@NAB2007, one of the most culturally significant conference tracks at the NAB2007.
Whether or not "CPE" pops up, the overall conversation may help assess whether telephone companies can succeed in their currents attempts to build their own version of the triple play (voice, video and data). One objective for this conference is to bring the telcoTV people into contact with broadcasters--seeking to create a process that helps both industries find new competitive approaches into the emerging market.
WHERE'S THE BREAKS?
To some observers, this mating effort is a collision of dinosaurs--the creaky wireline telephone industry trying to mate with the hoary one-channel broadcast industry.
Telephone and television--behemoths of the previous century--face similar problems in the Internet era: Adapting their skills and resources to a fragmented and distracted marketplace. But, despite the vast financial and customer-facing histories of both sectors, how can they survive, let alone dominate, in the megachannel worlds of Internet and mobile media?
Significantly, both industries share one critical ingredient. They are both local. Another beloved telco acronym is LEC (for "local exchange carrier"), and TV licensees gloat about their community service. Localism may be the common fodder that brings telco and TV together. And it can tame many forms, from citizen journalism to program packaging.
Those are some of elements that John Abel, who is something of an expert in herding these kinds of dinosaurs, expects to exploit at the Telecom@NAB2007 event that he is running. Until last year, Abel headed the convention program (among other tasks) at the U.S. Telecom Associations (formerly the U.S. Telephone Association), the lobbying group for the nation's telephone companies. Prior to that, he spent more than a decade in a similar role at NAB.
Hence Abel, through his new independent conference-producing venture Lightbulb Communications, has spent nearly two decades keeping legacy providers up to date about new opportunities. (Disclosure: I am working with Lightbulb Communications on the agenda for this conference and will be a panelist at the Las Vegas event.)
"We're trying to help the telcom industry understand the unique needs of video," Abel said. "Our goal is to teach telco people about the video business, to help them understand post production" and other details about local broadcasting.
A DIFFERENT BALLGAME
"If telcos are really going to understand what's happening in the video marketplace and be competitive, they've got to immerse themselves in video," he said. "It's not just a simple matter of hooking up. It is understanding the unique requirements of video and what the consumer expectations are for video delivery."
He points out that telephone companies bring significant resources to the emerging on-demand world.
"Their experience is highly structured with billing systems," Abel said, emphasizing that "video is a totally new ballgame for them." He says that the video consumer is taking the video experience to a higher level, citing the acceptance of HDTV and big-screen applications that are familiar to broadcasters but may be new territory for telcos.
Like others, Abel noted that telephone companies are pushing into video as their traditional voice and data services are facing greater competition from wireless and cable TV providers. For marketplace incentive, he pointed to the explosion of phone customers at cable TV companies--jumping from 1 million to nearly 8 million customers in the past couple years.
Abel said he believes that telephone companies can benefit from the local presence and video expertise of broadcasters.
For the broadcasters, Abel sees the potential alliance as a way to leverage their local news operations and exploit the value of their video archives.
"From the broadcasters' side, there is hardly anything to lose," he said, as network compensation evaporates and other economic hurdles materialize.
The nation's biggest telcos, Verizon (with its FiOS TV project) and AT&T (with it's beleaguered U-verse venture), are already immersed in local video delivery in selected markets; many smaller telcos have launched IPTV or other video services, too. The telcos are also developing mobile video services, often in league with broadcast networks--posing more competition for local broadcasters.
The telephone company culture, like that of broadcasting, is ripe for a multimedia overhaul. And Abel is in a position to help them do it. This is not his first "line extension" in Las Vegas. Twelve years ago, when Abel ran the NAB convention, he opened a new wing of very high-tech exhibits at the dawn of the Web era.
In 1995, at the first such alternative tradeshow during the NAB convention, he recruited an array of Silicon Valley-centric exhibits from Sun Microsystems, Silicon Graphics, Intel, Apple, Microsoft and dozens of other digital/interactive vendors, plus appropriate conference tracks, based at the Sands Exposition Center.
TWO MILES AND 50 YEARS
At the time, I characterized the uber-event as two shows that were "two miles and 50 years apart."
Traditional broadcasting equipment (i.e. products for one-way, one-channel broadcast production and transmission) was predominantly exhibited in the Las Vegas Convention Center. The new tech displays, with their emphasis on megachannel, interactive media, were at the Sands.
In the first years, another way to distinguish the mainstays at the two venues was "suits-and-ties" versus "black turtlenecks-and-ponytails." My favorite overheard comment during that first year in the Sands was from a young computer geek who had noticed that "there's another tradeshow over at the convention center where they have cameras and microphones."
He seemed stunned and surprised that such devices would appear at a NAB event, since he had myopically come there to display interactive video products and services.
Now, Abel is rounding up the suits-and-ties from telco and TV (although I'm guessing that most of them will wear turtlenecks or polo shirts; and there probably won't be many ponytails) for his latest paleontological foray into digital and cross-cultural convergence.
In doing so, the Telecom@NAB2007 seeks to contribute to a solution for a problem that Microsoft Chairman Bill Gates recently described during the World Economic Forum in Davos, Switzerland.
"I'm stunned how people aren't seeing that with TV, five years from now, people will laugh at what we've had," Gates said. Focusing on the flexibility of online video, Gates extolled an on-demand world without fixed program slots and advertisements that interrupt shows.
He even noted that broadcast mainstays such as "elections or the Olympics really point out how TV is terrible."
"You have to wait for the guy to talk about the thing you care about or you miss the event and want to go back and see it," Gates said. "Internet presentation of these things is vastly superior."
Whether or not Gates' vision of TV's near future is accurate, the dinosaurs of telco and TV have ways to reinvent and reinvigorate their worlds. Some efforts require losing their language differences (terms like "CPE"), but more of it involves finding common ground (aka "converging goals") where their huge carcasses can move ahead competitively.
If they succeed, the dinosaur stampede could outrun anything seen in Jurassic Park.
