LOS ANGELES—“There’s an arms race for programming,” said John Martin, Turner Broadcasting System’s CEO, at the opening session of the Cable Show, marveling that some programs on cable networks, such as “The Walking Dead,” are out-performing broadcast ratings. “A few years ago that was structurally impossible.”
Yet, another panelist, Michael Fries, president and CEO of Liberty Global, acknowledged that, “We’re competing with hyper-giants who can roll out networks overnight without building infrastructure.”
Although not specifying Facebook, Google’s YouTube or other digital distributors, Fries’ remarks underscored the new competitive landscape that permeated the mood at this week’s low-key annual convention of the National Cable and Telecommunications Association.
ESPN President John Skipper, who is also convention co-chairman, pointed out that cable is “a $70 billion business and we’re all making money,” but he stressed that the number of cable subscribers is dropping, even as the overall pie is growing.
“We’ve got to work together to sell the value of the pay television subscriber,” Skipper said.
Other top executives agreed about the looming changes in industry structure, many of them tied to pricing and the ownership shuffle if/when the Comcast-Time Warner Cable merger goes through.
“We’ll reach a tipping point,” said Jerry Kent, chairman and CEO of Suddenlink Communications. “It will price some consumers out of the market.” He did not endorse a la carte pricing, long a bane of cable operators and programmers, but Kent suggested that the industry must find some new forms of content bundles and “more affordable types of programming” including dropping “certain programmers because they’re too expensive.”
He warned that failing to do so may invite government intervention and “will put a lot of pressure on all of us.”
Nancy Dubuc, president and CEO of A+E Networks, acknowledged that “the next generation of creators is moving to other platforms,” such as YouTube and Vine.
The focus on online options permeated the convention’s first session, aptly titled “Brought to You by Broadband.” Although the top executives on stage did not outline their broadband agendas, CableLabs President and CEO Phil McKinney emphasized the growing ability of the cable industry to deliver higher capacity services.
The first prototype hardware for DOCSIS 3.1 will be available at the end of this year, McKinney said, and he expects “early deployment by the end of 2015 and wide deployment in 2016.”
In the exhibit hall of the annual NCTA show, noticeably lightly attended compared to recent years, the emphasis was on software. Even Intel was showing software, such as its High Efficiency Video Coding technology for future systemsarchitectures.
Conference sessions also exposed attendees to the shifting winds of their industry. At an Imagine Park session called “Beyond Better Television,” starkly divergent visions were espoused by how to display high-quality images, although there was little talk about cable’s capability to delivery bandwidth-consuming visuals.
Craig Heiting, vice president of cable sales at Deluxe Digital Distribution, demonstrated the cloud-based, end-to-end production for 4K video. He was immediately followed by Roland Vlaicu, senior director for broadcast imaging at Dolby Laboratories, which is developing a “better pixel” approach to visual technology that, he said, will require 20 percent more bandwidth than current HDTV. There was no discussion or on-stage feuding about which approach will work better for cable broadband providers.
