Cable-Tec Expo: Cable Grapples With OTT Video

NEW ORLEANS -- SCTE Cable-Tec Expo -- Cable operators can fend off competition from Apple Inc. (Nasdaq: AAPL), Netflix Inc. (Nasdaq: NFLX), and other over-the-top (OTT) video threats by offering subscribers more flexible programming packages, executives said here Wednesday.

With Internet video players giving consumers the ability to order individual shows, cable MSOs may want to tweak their decades-old practice of distributing video content in broad subscription packages, Motorola Inc. (NYSE: MOT) customer systems architect Robert Howald said here at an opening general session focused on "keeping pace with the digital consumer."

"Give them the content they want. Sell it in ways they want to buy it," Howald said. "There might be some flexibility that has to be brought to bear there as people get comfortable, or they start using more over-the-top [video]," he added.

For years, some cable MSOs and consumer advocates pushed cable programmers to allow distributors to offer subscribers à la carte programming packages. (See Downsizing Cable .)

Howald didn’t use the term à la carte in proposing alternatives to the cable industry’s current subscription models. Instead, he suggested that operators focus more on giving consumers convenience and flexibility in the way they package programming, and he also said cable MSOs should begin to integrate Web video into their programming offerings.

"We are entering the Internet era of TV. We believe service providers can flourish in the Internet era by focusing on becoming the consumer’s retailer of choice for all video experiences," Howald said.

OTT players and consumer electronics (CE) firms ranging from Boxee to Google TV and Sony Corp. (NYSE: SNE) are looking to drive new revenue streams by delivering Internet video to broadband-connected TVs, Blu-ray players, and other devices in the home.

Technology consultant and former Time Warner Cable Inc. (NYSE: TWC) VP of technology Walter Ciciora said CE firms that sell video directly to consumers could threaten revenue from premium programming networks distributed by cable operators. But it's a "difficult business" for CE firms, and cable MSOs will still benefit from OTT video services since subscribers will have to rely on a high-speed Internet subscription to access the content. (See Boxee Eyes Over-the-Top Live TV.)

"What we’ve got to do is make sure that what we offer is easier to use, is higher quality, and satisfies the needs so folks don’t go off and go over-the-top," Ciciora, added.

Comcast Corp. (Nasdaq: CMCSA, CMCSK), Verizon Communications Inc. (NYSE: VZ), and other service providers are beginning to pitch subscribers TV Everywhere products that allow them to view TV series and movies from their subscription packages on PCs and mobile devices.

Several technology vendors are hawking gear and software this week in New Orleans aimed at helping MSOs deliver Internet video to subscribers both in the home, and to PCs and mobile devices. Some vendors, including video-on-demand tech supplier Concurrent Computer Corp. (Nasdaq: CCUR), are adding technology that helps MSOs deliver over-the-top video to their product offerings. (See TiVo, Roku Hook Up Hulu Plus and Cable Guys Buck Up for BNI Video .)

— Steve Donohue, Special to Light Reading Cable

Duh! 12/5/2012 | 4:20:51 PM
re: Cable-Tec Expo: Cable Grapples With OTT Video

The stand-off between Fox and Cablevision over retransmission consent ought to be a wakeup call.  The business model that does not separate aggregation and distribution from transport, navigation and billing is not sustainable.   It keeps MSOs and consumers in a weak position with respect to content providers and big-market sports teams.  Better for them that consumers buy content they want, with pricing set by normal market dynamics, and that MSOs handle transport, navigation and billing on non-discriminatory terms with decent margins, without having to intermediate in obtaining and aggregating programming.

thebulk 12/5/2012 | 4:20:47 PM
re: Cable-Tec Expo: Cable Grapples With OTT Video

there is no doubt that the ott space is red hot right now. netflix seems to be the biggest player as far as major media is concerned, but youtube also takes up a big chunk of the action. i know some of the msos have launched services like epix and vutopia that come with their own ott offerings. i think the first step for cable to be truly competitive with big time ott players like netflix is to work towards changing their current vod model, from a rental to a flat rate, i know this would require some extensive renegotiations with studios, but i don’t see any other way for them to stay competitive in the market. if the msos could make that first step, and then also offer the same service to their customers ott then they could start to be a major player in that market.


SteveDonohue 12/5/2012 | 4:20:44 PM
re: Cable-Tec Expo: Cable Grapples With OTT Video

Offering a flat rate for VOD movies on cable is an idea worth exploring, and it could help cable compete against Netflix and its unlimited rentals. I agree -- it would be difficult to negotiate a flat rate approach with the studios. One option may be to test a flat rate for VOD titles in one cable market, and take a look at how it impacts VOD revenue. 

thebulk 12/5/2012 | 4:20:02 PM
re: Cable-Tec Expo: Cable Grapples With OTT Video

if the legal details could be worked out it would be worth a try. the bottome line is, if it dosnt make money it is not going to happen.

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