Is Broadband TV a Cable Killer?

BOSTON -– Cable & Telecommunications Association for Marketing (CTAM) Summit -- If broadband-fueled delivery of movies, TV shows, and other video fare represents a true threat to the traditional cable TV advertising model, no one appears willing to say that here.

The degree of the broadband video threat "actually lies with the programmers," said Peter Stern, executive vice president and chief strategy officer of Time Warner Cable Inc. (NYSE: TWC). It's up to them, he said, whether to put their content on the Web for free (under an ad-supported model) or hold it back to preserve the subscription business.

Starz Entertainment LLC and HBO, premium programmers that make their living on subscription revenues, are obviously going to do everything they can to retain that business even as they engage broadband strategies. (See Starz Pulls the Plug on Vongo and TWC Scaling Up 'HBO on Broadband'.) Broadcasters, meanwhile, are pushing the "free" needle with services such as Hulu LLC .

Stern said Time Warner Cable, a champion of "Start Over" and other network-DVR services that disable the ability for viewers to fast-forward through ads, believes its customers should only have to pay once for access to content, and be able to view that content "on any screen at any time," as opposed to being forced to pay separate subscriptions or fees for that right.

That means operators and programmers should "aggressively embrace time-shifting technology… [and] expand the pie," Stern said.

Deanna Brown, president of Scripps Networks's digital division, is playing on both sides of the distribution fence. "One man's promotion is another man's programming," she noted.

But the big question is how to develop those new business models (ad-supported, paid downloads, and paid streaming, etc.) and how they synch up with the older ones without harming them. "It's all up in the air," Brown said, later noting that Scripps isn't about to give up the source of affiliate fees it regularly receives from cable operators that carry Scripps's stable of networks, which includes HGTV and Food Network.

Fred Siebert, creative director and a founder of Next New Networks, a developer of niche, "micro-television networks" for the Internet, said assumptions that tried-and-true TV distribution models will die out anytime soon is foolish. "It's just stupid. Nothing is going away," he said, noting that cable did not kill off broadcast television in the 1980s, and, before that, broadcast TV did not plunge a dagger into the heart of radio.

By the same token, programmers and content creators will need to "undergo [a] great adjustment" to accommodate the broadband world. "New mediums demand new brands," said Siebert.

For now, Amazon.com's "Unbox" broadband service continues to sell and rent titles à la carte. But will the company consider adding an ad-supported service if all distribution models are expected to coexist?

"It's possible," said Roy Price, Amazon.com's director of digital video. "We go where the customers want to go."

Predictably, David Eun, VP of content partnerships at Google (Nasdaq: GOOG) and YouTube Inc. , played up the value of video supported by relevant and targeted advertising.

"The results of ads are as interesting as the search results," Eun said. "When you get that right, the ads become content."

— Jeff Baumgartner, Site Editor, Cable Digital News

iluv2fish 12/5/2012 | 3:27:28 PM
re: Is Broadband TV a Cable Killer? "Broadband TV kills cable because its much closer to "ala carte".

Docsis 3.0 will enable Cable companies to sell
A la cart.

Stay tuned.
unbearable 12/5/2012 | 3:27:28 PM
re: Is Broadband TV a Cable Killer? Broadband TV kills cable because its much closer to "ala carte".

With cable, if you want to watch ONE channel, you have to buy the "basic" service, then you have buy the "expanded basic" service, then you have rent a decoder box, then you have to add a "digital tier".

For one channel.

Naturally, its the one your wife wants to watch.

That one channel costs about $60 a month, before the HDTV, DVR, and remote control charges.

Apparently, most men/women are easily convinced just to pay the bill to keep peace in the household, and so you get package-creep, and the cable bill is $120 a month or more.

If the cable industry wants to defend against "Broadband TV", all they have to do is sell channels individually, with a low base fee for access.

paolo.franzoi 12/5/2012 | 3:27:27 PM
re: Is Broadband TV a Cable Killer?
Actually, a la carte is not a cable issue. It is a content owner issue. They force cable to carry many more channels than they want to.

Of course that 60 bucks a month gets you a lot more video than you can download - unless you go ad supported that you can not fast forward through.

If the content guys want to back out of their distribution deals, remember that is Billions of Dollars of revenue loss. That is a lot of money to make up for from downloads. So, don't expect that to flip for a long time. Supplement - yes. Replace - no.

rjmcmahon 12/5/2012 | 3:27:23 PM
re: Is Broadband TV a Cable Killer? Seven's got this right, i.e. this is a media owner thing not a cable distributor thing. Think of it like this, the media companies have figured out hot to place incessant, blathering advertisers in four rooms of the average US household, telling us how much better our lives are do to the invention and consumption of Cheez Whiz. A la carte means that the media companies lose this ability. Now, getting rid of the blatherers means somebody else has to pay for production of the media. The net is the consumer rates will go up. Personally I'm for it because it means that the con artists have to figure out new ways to create demand for pure shit.
OldPOTS 12/5/2012 | 3:27:15 PM
re: Is Broadband TV a Cable Killer? With rjm and seven in agreement, it must be TRUE.
LR take note.

paolo.franzoi 12/5/2012 | 3:27:13 PM
re: Is Broadband TV a Cable Killer?

rj is wrong with agreeing with me. Clearly somebody has hacked one of our accounts. Actually, I agree with many of his comments IF you agree with his logical starting point. It is actually this I disagree with. Because I start at a different point, we end up with completely divergent views.

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