Cable Faces Online, On-Demand Challenges

WASHINGTON -- The Cable Show -- Online video is an oncoming freight train the cable industry must be prepared to face, but striking the right balance between what's offered via traditional TV and what's delivered by the Web will be critical to both MSOs and programmers as they tie together new business models.

How that balance is achieved was a hot topic here on Wednesday as panelists outlined their philosophies on how the cable industry can develop a responsible and lucrative "everything-on-demand" business model.

Sam Schwartz, president of Comcast Interactive Media (CIM Labs) , said his division is building out an infrastructure to enable a “cross-platform experience,” and to also use Fancast -- Comcast Corp. (Nasdaq: CMCSA, CMCSK)’s online video hub -- as a control panel for subscribers to program their DVRs.

Time Warner Cable Inc. (NYSE: TWC), meanwhile, doesn’t plan to use its Road Runner portal for broadband video content distribution. Peter Stern, the MSO's chief strategy officer, said he is more interested in “laying a foundation where cable, advertisers, programmers, and consumers have an ecosystem" that works for all parties. TWC, he said, is considering “browser-based solutions” that allow subscribers who pay for video services on TV to also get access to content online. (See Cable's Web TV Approaches May Vary .)

Discovery Communications Inc. (Nasdaq: DISCA, DISCB, DISCK), meanwhile, wants its content to be accessible on every platform, but, ultimately, the programmer wants to control the rights to its content and how, and in what form, it's made available to TV, PC, and mobile platforms, according to Rebecca Glashow, the programmer's SVP of digital media. Discovery is using a multi-platform path to extend the reach of some shows' brands without putting full-length shows online. (Check out this new interview with Glashow on our sister site, Contentinople.)

Lynne Costantini, EVP of affiliate sales and marketing for Scripps Networks, sees the programmer's video site as “an extension of the on-TV experience,” complementing long-form fare with broader and deeper content, a strategy that works especially well for the networks' decorating and design programs, she says. Scripps, which operates networks such as HGTV and Food Channel, doesn’t place its long-form video content on the Web, however.

'Perfect storm for piracy'
Although programmers are vetting a range of Web TV strategies, faster speeds and peer-to-peer applications are cause for concern. In Canada, that combo has created "a perfect storm for piracy," said David Purdy, VP and GM for video at Rogers Communications Inc. (NYSE: RG; Toronto: RCI).

That storm is likewise marked by high broadband penetration rates, a multi-cultural customer base with 44 percent of households speaking a language other than English and French, and ancillary content rights being held back by studios for the Canadian market. This situation leaves many households with “no legitimate sources for TV content,” forcing many to use P2P services to obtain copyrighted video illegally, Purdy said.

Regarding legally obtained broadband video, all panelists lamented a need for better measurement tools and techniques that meet the so-called "AAA" (authentication, authorization, and accounting) challenge.

Scripps's Costantini endorsed a “TV everywhere” experience, but cautioned that the model requires savvy, intuitive interfaces, and extensive audience measurement tools to be successful.

— Patti A. Reali, Special to Cable Digital News