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
Steve Saunders provides an overview of white box networking and introduces a new "slim line" version of the OSI 7-layer model.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
Wagner’s Ring
How Might Open Source Fail?

11|24|15   |     |   (2) comments

Open source, SDN, and NFV are looking inevitable – but performance, standards proliferation and regulatory capture could derail the movement.
LRTV Custom TV
NFV Lifecycle Orchestration – a Fresh Vision for Telco

11|23|15   |   6.40   |   (0) comments

Simon Osborne, CTO Comptel, and Heavy Reading's Caroline Chappell reveal the business impacts of new SDN and NFV, and what the term service orchestration actually means. Together they define Lifecycle Service Orchestration and how the virtualized future will look for telecoms operators.
Between the CEOs
Cisco's Virtual Role in Saudi

11|20|15   |   12:15   |   (1) comment

Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
LRTV Huawei Video Resource Center
Huawei Leads With Kubernetes for Cloud PaaS

11|19|15   |   08:26   |   (0) comments

Huawei is looking to Kubernetes as a key tool for building robust open source technologies for customers and partners, said Ying Xiong, chief architect of cloud platform at Huawei, in an interview with Light Reading West Coast Bureau Chief Mitch Wagner at the recent Kubecon conference.
Women in Comms Introduction Videos
WiC in London: The Highlight Reel

11|19|15   |   5:33   |   (1) comment

NetCracker's Mervat El Dabae headlines an inspiring morning in London with help from leading women from Vodafone, TalkTalk, Hyperoptics and Ciena.
LRTV Documentaries
Why Saudi's So Hot for New Tech

11|19|15   |   05:07   |   (0) comments

Light Reading's Steve Saunders reports from Saudi Arabia, a hyper-competitive market desperate to embrace the next generation of communications technologies and services.
LRTV Custom TV
Why Data Models Deliver More Value Than Information Models

11|19|15   |   5.08   |   (0) comments

Stefan Vallin argues that more automation is needed to manage end-to-end services and the hybrid networks they run on, and that data models are key to achieving this.
Telecom Innovators Video Showcase
SDN Management & Orchestration in the WAN

11|17|15   |   7.20   |   (0) comments

Carol Wilson and Packet Design CTO Cengiz Alaettinoglu discuss CSPs' SDN service delivery and assurance requirements. Learn about a modular approach to building automated control, orchestration and management functions for the WAN that are policy- and analytics-driven.
LRTV Custom TV
Flash Networks: Optimizing for Radio Spectral Efficiency

11|17|15   |   3:34   |   (0) comments

Today most optimization vendors only focus on optimizing voice or data. Ofer Gottfried, Flash Networks' CTO, shows how improving data throughput and maximizing spectral efficiency reduces capital and operating expenses while also providing a platform for user engagement.
LRTV Custom TV
Making Pay-TV User Experiences Millennial-Friendly

11|16|15   |   6:42   |   (0) comments

The unique challenge of reaching and engaging Millennials is driving pay-TV video experience transformation that can include higher quality UIs, viewing of multiple content streams at once and seamless transitions between handheld devices and the television.
LRTV Huawei Video Resource Center
Huawei Electric Power Summit 2015 – Addis Ababa, Ethiopia

11|16|15   |   1:28   |   (0) comments

Huawei, together with Ethiopia's Ministry of Water, Irrigation and Electricity, hosted the Huawei Electric Power Summit 2015 in Addis Ababa, Ethiopia. The event gathered industry experts and senior executives of global electric power companies to discuss emerging industry trends including: improvements in new energy conversion efficiency, reduction of line losses ...
Between the CEOs
Mobily on Bringing Innovation to Saudi Arabia

11|13|15   |     |   (2) comments

Mobily CEO Ahmad Farroukh talks to Steve Saunders about the realities of being a mobile operator in Saudi Arabia.
Allot MobileTrends Report H2/2015 reveals how daily online behavior can be used to discover smarter ways to profile customers and propose valuable, real-time offers to them.
Hot Topics
Samsung to Sell Wireless Networking Unit?
Dan Jones, Mobile Editor, 11/23/2015
Sprint Undercuts Rivals With Half-Price Offers
Dan Jones, Mobile Editor, 11/18/2015
Routers Are Facing Extinction: Let’s Not Save Them
Scott Sumner, VP solutions marketing, Accedian Networks, 11/18/2015
Sprint, Verizon Face Reorganization, Job Cuts
Dan Jones, Mobile Editor, 11/20/2015
Sprint to Get $1.2B From New Leasing Venture
Dan Jones, Mobile Editor, 11/23/2015
Like Us on Facebook
Twitter Feed
December 15, 2015
Virtualizing Cable Services
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading founder and CEO Steve Saunders talks with Zayan Sadek, Regional Manager at Cisco Systems, about the competitive communications services market and advance of virtualization in Saudi Arabia.
Mobily CEO Ahmad Farroukh talks to Steve Saunders about the realities of being a mobile operator in Saudi Arabia.
Cats with Phones
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and for copper plant evolution and the various deployment possibilities for FTTH/B.