Even with the economy in recession, even with television distribution models in upheaval, even with the advertising business suffering, business was surprisingly good at the Cable Show ’09. Beating predictions of a serious attendance drop, the National Cable & Telecommunications Association’s annual show in Washington last week reflected the industry’s relative health. Its leaders advocated investing in the business and offering new products and services at a time when many other businesses are retrenching. Pre-registrations were down about 20% from last year, but last-minute walk-ins boosted attendance to close to last year’s level of 12,000, NCTA officials said. The cable industry is racing to get ahead of an issue that is bedeviling broadcast television—generating meaningful revenue from shows consumed on the Web. At the Cable Show ’09, executives plotted paid-content models that rely less on advertising and more on fencing off programs from viewers who don’t subscribe to cable. The concern for cable operators is that consumers could drop their subscriptions if they can get the programming they want via their broadband connection. So far, programmers haven’t figured out a good way to make the Web pay. Putting a show on the Internet for free reduces its value to cable operators, who pay large monthly license fees to the networks for that content. The revenue generated by the small number of ads that accompany a show online is tiny compared to TV ad revenues. Comcast Corp. CEO Brian Roberts said Web video could be “friend not foe” to the cable industry because it drives operators’ fast-growing high-speed Internet business. It is in Comcast’s interest to give customers what they want—the ability to see what they want, when they want it, where they want it, on the device they want it on, he said. But that has to be done “in a way that adds value, not destroys value,” Mr. Roberts said. The solution to making cable programming available on other platforms without destroying the dual revenue stream of ads and license fees might be authentication—a system that verifies that a consumer is a cable or satellite subscriber before allowing access to content. That authentication is a key part of the TV Everywhere initiative, which would give cable subscribers access to content on the Web by signing in to prove they are paying for a cable TV subscription. Time Warner CEO Jeff Bewkes, a leading proponent of TV Everywhere, said the industry is moving too slow at making programming ubiquitous. “We ought to get it on VOD, get it on stream and put it on the Hulus and YouTubes—but only if people are subscribing to video plans,” he said. He said the broadcast networks, which put programming online for free, are confusing the industry and the public. David Zaslav, CEO of Discovery Communications, said the last few years’ initial rush to put programming online for free has created issues that now have to be dealt with. “We have to be careful not to train people to consume content on platforms that will put us out of business,” he said. “Authentication is a good discussion,” Mr. Zaslav said. “Tons of the best shows on cable are just out there. Now you have to deal with it. We’re not going to put the genie back in the bottle.” Disney CEO Bob Iger, whose company led the way in making programming widely available in the digital world, said he would be “open to exploring” running entire cable networks online if there was an authentication system. “With authentication in place, streaming full networks online would be an interesting and potentially compelling feature for consumers,” Mr. Iger said. The idea also seemed to be a winner to analyst Tom Eagan of Collins Stewart, who used the heading “Authentication, a No-Brainer” in a research note he issued on the industry last week. “Over the next six to nine months we are going to hear a lot about authentication,” he wrote. Steve Burke, chief operating officer of Comcast, said the cable giant plans a national test of an authentication system this summer. “It is one of the most important things we can do,” Mr. Burke said during a panel discussion on Friday. “It is very complex technically. You have to make sure you’re 100% secure and that nobody can hack that.” Mr. Burke said a Comcast unit called thePlatform was working on the test. Time Warner Cable already is using an authentication system in Wisconsin, where it is testing HBO Go, which allows HBO subscribers to watch HBO programming on their computers at home or while traveling.

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Posted Sun, Apr 5 2009 10:53 PM by News