Less than a year after introducing Contour for the TV and mobile devices, Cox Communications has deployed the next-generation user experience to more than 1.2 million subscribers. What's more impressive are some of the results Cox has reported from the Contour interface's new personalization features.
Cox Communications Inc. says its Contour content recommendation engine, which is powered by ThinkAnalytics Ltd. , has boosted the number of channels watched by the average subscriber from 22 to 29 over the last 18 months. The Nielsen Co. reports that the average number of channels watched by pay-TV viewers nationally is 17.
In an interview at the Cable Show last week, Steve Necessary, vice president of video strategy for Cox, also told Light Reading that on-demand use in households with Contour has increased by about 19%. Both that figure and the average number of channels per subscriber continue to go up.
Some cable operators are looking to pull away from TV services and focus more on broadband, but Cox is still quite comfortable in the video business. Necessary said that, even though the broadband-only business model may look attractive, "consumers are not really ready for that." As long as multichannel video providers can aggregate content effectively, there will continue to be a TV bundle. Synergies between the broadband and TV businesses -- like the ability to authenticate subscribers -- also make combining the services worthwhile.
"I think we'll be in the video business for some time to come," he said.
The investments in Contour and the video business as a whole illustrate Cox's strategy for guiding the evolution of pay-TV services.
Besides discussing Contour's progress, Necessary detailed Cox's cable perspective on a number of topics. For one thing, he views Cox as siding more with Comcast Corp. (Nasdaq: CMCSA, CMCSK) than Time Warner Cable Inc. (NYSE: TWC) on prioritizing advanced set-tops and gateways over porting content to as many third-party retail devices as possible. That's not a philosophical issue, he said, but a practical one. Right now, the time, effort, and money required to integrate with so many retail products is significant.
Turning to Netflix Inc. (Nasdaq: NFLX), Necessary addressed whether Cox would contemplate bringing the subscription video service to its own set-tops. "We certainly have considered it," he said. Consumers clearly want Netflix on set-tops, but many of Cox's programming partners wouldn't be happy with such a move. Perhaps that mindset will change as more operators bring Netflix on board. (See Netflix Cracks Top 10 MSO.)
Overall, Necessary was optimistic about the cable business, where consolidation continues to shrink the number of players on the field. Regarding the proposed acquisition of Time Warner Cable by Comcast, "there's a lot to admire about that capability that comes with size."
Even if Cox stays the same size, though, Necessary says advantages will accrue to the MSO if that merger goes through. A larger Comcast would theoretically be able to drive hardware prices down, which should benefit Cox and other service providers. Much as it did with the Reference Design Kit (RDK), Cox plans to "draft" behind its larger brethren and take whatever advantage it can from Comcast's future investments.
As for Cox's own product roadmap, Necessary said the company will continue to improve its content recommendation capabilities, and it hopes to expand its TV Everywhere initiatives, at least extending its reach to some of the more popular consumer products. He said Cox wants to get more content on more devices in more locations. It's an increasingly common cable refrain.
— Mari Silbey, special to Light Reading