Light Reading

Cable Downplays 'Cord-Cutting' Threat

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner

Hey, Chicken Little, take a pill already. The sky on cable's video business is not falling in the midst of a growing market for over-the-top, Web-sourced quality movies and television shows.

At least that's a generalization on how execs at Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Cox Communications Inc. view the world today, even as the concept of "cord-cutting" -- a trend that refers to a growing, but small number, of consumers that are forgoing their traditional multichannel video subscriptions in favor of using broadband to fulfill all of their video needs -- starts to make some ripples.

Cord-cutting just simply isn't happening in a big way, MSO execs insisted today at a Cable & Telecommunications Association for Marketing (CTAM) "teleseminar" on multi-screen video migration strategies

"We at Comcast have not seen any cord-cutting today," said Amy Banse, the president of Comcast Interactive Media (CIM Labs) , the unit behind Comcast's Internet video hub and OnDemand Online initiative. "It's not a true phenomenon yet."

"It's a margin of error," added Cox SVP of strategy and product management Dallas Clement. "There's no discernible number of people doing that."

Online video may not be eating cable's lunch yet, but video streaming usage continues to grow and remains skewed toward youngsters who will be cable's customers of the future. Recent CTAM study data shows that 40 percent of broadband users in the 18-year-plus category are heavy users, accounting for 80 percent of the video-streaming minutes per month. That group streams about 350 minutes per month of online video, followed by mid-range users (64 minutes) and light users (36 minutes).

Even if cable appears to be downplaying the threat of Web video, MSOs are at least preparing for it.

Comcast, for example, is getting ready to kick off a tech trial for OnDemand Online, a WebTV service that "authenticates" video subs to access more shows via the Internet and is offered as part of their traditional subscription TV package. The initial trial will involve about 5,000 customers, and Comcast began testing it during the past week, Banse said. Comcast is offering it in tandem with Time Warner Inc. (NYSE: TWX)'s "TV Everywhere" initiative. (See Time Warner, Comcast Team Up for TV Everywhere, More Nets Join Comcast's Internet TV Test, CBS Joins Comcast's Internet TV Trial, and Starz Joins TV Everywhere.)

Cox, meanwhile, is placing a priority on inking licenses that let the MSO offer an increasing number of popular TV shows on its existing video-on-demand (VoD) platform. (See Most Subs OK With Disabled Fast-Forward.)

Clement said Cox's "My Primetime" service is becoming increasingly important because the older pay-per-view and the more recent movies-on-demand model are "low margin" businesses with too many outlets for that content. However, subscription-VoD services "have helped the price value" of the premium category.

Although much of Cox's near-term additions will be TV-centric, the MSO "is thrilled that others are looking to the Internet and other devices" to consume video, Clement said.

Mobile video taking a back seat
Some of that delight stems from cable's budding wireless ambitions centered on WiMax and Long Term Evolution (LTE). (See Cox Wireless: Soup to Nuts and Comcast Maxes Out in Portland.)

Cox, which is taking the LTE route on its own, expects to have wireless services launched in a couple of markets this year, though video "won't be the primary focus." Cox, Clement said, will be looking to mobilize other apps, such as voice mail and email, at the start.

The story's similar at Comcast, which just introduced an app for iPhone and iPod Touch devices that provides access to the subscriber's messaging applications, in addition to TV listings and some movie trailers, but nothing in the way of long-form video. "Video will come, but it will come later," Banse said. (See Comcast's TV-Free iPhone App .)

But back in the wired world, Banse said growing broadband consumption represents a "huge opportunity" for cable operators. However, she echoed a warning we're used to hearing from Time Warner Cable Inc. (NYSE: TWC) chief Glenn Britt: that programmers should be careful about putting a bunch of their content on the Internet. Networks, she said, won't be able to preserve their business model without the additional fees MSOs pay them.

"Hoping to put... content online for free and monetize [it] through advertising isn't going to work," she said.

Rainbow Media Holdings SVP of broadband David Evans agreed that the programmer, which has networks such as AMC and We in its stable, is "restricted" on how much content it can offer via the Web for free. "It's critical to stay within the ecosystem," he said. "We really have to work with our cable partners."

But a well-executed Web TV strategy works, too. NBC offered thousands of hours via the Internet to provide extensive coverage of the 2008 Summer Olympics in Beijing. "We actually drove up our television consumption," said Perkins Miller, SVP of digital media for NBC Universal 's Sports & Olympics division.

Mobile access to content is also continuing to pay a role at NBC in terms of news scores and video clips, but not yet with long-form programming. Miller said his company has seen growth in the range of 300 percent to 900 percent on the mobile platform.

"If we're not there, we'll be missing something," he said. "If you don't think that [mobile's] competitive to a media business, you're crazy."

— Jeff Baumgartner, Site Editor, Cable Digital News

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View        ADD A COMMENT
From The Founder
The comms industry is rallying to the cause of open, independent interoperability testing.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Telecom Innovators Video Showcase
Tail-f, Cisco & What the Future Holds

10|9|15   |   8:17   |   (0) comments

Steve Saunders meets with Tail-f's Director of Technology, Carl Moberg, in Stockholm to discuss becoming part of Cisco, ETSI MANO, virtualization and the need to combine science and business in order to create opportunities for service providers.
LRTV Interviews
Broadband Forum Embraces SDN & NFV

10|9|15   |   02:42   |   (0) comments

At Gigabit Europe 2015, Robin Mersh and Kevin Foster from the Broadband Forum explain how the industry body is adapting to meet the SDN, NFV and cloud needs of the access network sector.
LRTV Interviews
Top Tips for FTTH Operators

10|8|15   |   02:26   |   (0) comments

At Gigabit Europe 2015, Ventura Team co-founder Richard Jones talks about some of the key business case considerations for FTTH network operators.
LRTV Interviews
M-net Calls for FTTx Unity

10|8|15   |   03:45   |   (0) comments

At the Gigabit Europe event, Jörn Schoof from M-net, the Munich city network operator, calls for industry collaboration on fiber broadband access rollouts.
LRTV Documentaries
The Business Case Challenge for NFV

10|7|15   |   03:47   |   (0) comments

Virtual CPE is one of the early success stories for network functions virtualization, as service providers are finding flexible, programmable CPE solves a lot of logistics problems and reduces their cost. But even here, Masergy Communications faced a business case challenge, says CTO Tim Naramore.
LRTV Interviews
JT Offers Some Gigabit Lessons

10|7|15   |   4:08   |   (1) comment

Barna Kutvolgyi, managing director, Global Consumer, at JT, the incumbent operator on the island of Jersey, talks about how other service providers can learn from his company's gigabit broadband rollout experiences.
LRTV Interviews
AT&T's Chiosi on the Potential of Open Source

10|6|15   |   06:27   |   (0) comments

AT&T Distinguished Network Architect Margaret T. Chiosi talks to Light Reading's Carol Wilson about the potential for open source technology to liberate communications service providers.
LRTV Interviews
Network Security in a Gigabit World

10|6|15   |   05:52   |   (0) comments

Masergy's James Harrison talks about some of the network security and data center issues network operators need to consider as they expand their broadband services portfolios.
LRTV Documentaries
Telefónica: In Search of Virtual Simplicity

10|5|15   |   07:30   |   (0) comments

Francisco-Javier Ramon Salguero, head of Telefónica's NFV initiative, admits virtualization initially means greater complexity, but with the right abstraction layer, it is possible to create a services-driven network architecture. He explains how Telefónica's current trials and initiatives are aimed at doing that, and what his company and other carriers need to ...
LRTV Interviews
Gigabit Europe Takeaways

10|5|15   |   03:47   |   (0) comments

Participants from the inaugural Gigabit Europe event in Munich share their key takeaways from the conference.
Women in Comms Introduction Videos
Intel Urges Women to Take Advantage of Their Seat at the Table

10|5|15   |   4:27   |   (1) comment

Have inclusive and constructive conversations, attach a bigger meaning to your work and get involved in the cause, Intel's Monique Hayward advises women in comms.
LRTV Interviews
BT Updates on Plans

10|2|15   |   03:16   |   (2) comments

Peter Bell, CIO at Openreach, the access network division at UK incumbent BT, provides an update on the operator's trials and how Openreach is planning to deploy the broadband technology in its street cabinets.
Upcoming Live Events
October 14-15, 2015, New Orleans Ernest N. Morial Convention Center, New Orleans, LA
November 5, 2015, Hilton Santa Clara, Santa Clara, CA
November 17, 2015, Santa Clara, California
December 1, 2015, The Westin Times Square, New York City
December 2, 2015, The Westin Times Square, New York City
All Upcoming Live Events
Network appliances have a strong value proposition in today's networks and will continue to do so in the NFV and SDN-enabled networks of tomorrow.
Hot Topics
M&A Speculation Swirls Around Juniper
Ray Le Maistre, Editor-in-chief, 10/6/2015
Cisco's Chambers Rules Out Political Bid
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/6/2015
Cord Cutting? 'Fraid so.
Brett Sappington, 10/7/2015
Infinera Fleshes Out Its Metro 100G Story
Ray Le Maistre, Editor-in-chief, 10/7/2015
Cisco Makes 'Martian' Connection
Mitch Wagner, West Coast Bureau Chief, Light Reading, 10/9/2015
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
With so many new and exciting communications technologies now under development, it's easy to get caught up in the industry's escalating hype cycle. That's why the ...
Last week saw a big day in the 15-year history of Light Reading when Editor-in-Chief Ray Le Maistre and I were invited to interview the Deputy Chairman and Rotating ...
Cats with Phones
"What?! I'm on with Finisar about their stock price tanking" Click Here