FROM WESTERN CABLE
Ted Turner, vice chairman of Time Warner, told a packed ballroom of cable industry executives that he still wants to buy the NBC network and that he’d also love to buy DirecTV.
Speaking at the panel session that officially opened the annual Western Cable Show at the Los Angeles Convention Center, Turner generated waves of laughter when he said, “I’m like Noah. I want two of everything,” referring to the fact that Time Warner already owns the WB broadcast network.
He then adapted the old advertising slogan by chanting, “Double your pleasure, double your fun, I want two networks instead of one.”
WB not deemed a net
But Turner went on to say that he doesn’t regard the WB as a real broadcast network. “The WB doesn’t have news or sports,” he said, adding, “I regard the WB as a syndicated program service, giving Warner Bros. TV a platform for the programming it produces.”
So, “assuming Time Warner could get NBC in a deal” with the network’s owner General Electric, Turner said he’d try to buy it because “in the long term, we’ll be disadvantaged by not having a network.” He didn’t elaborate on his desire to purchase DirecTV, the largest distributor of cable networks and pay-per-view movies to owners of satellite dishes.
The prospect of Time Warner, which is already the biggest media corporation in the world, getting even bigger represents a trend toward mergers and consolidations that worried another panelist, Barry Diller, chairman and CEO of USA Networks. “Further concentration” in the media industry, Diller warned, “will result in less competition. The blade will just keep getting duller.”
Diller also sounded the alarm about what he called the “fractionalization” of viewership by such new broadcast networks as UPN, the WB and Pax TV and dozens of new cable networks, as well as pay-per-view movies, multiplexed pay TV networks and Internet surfing by computer users.
Big audience deliveries harvest the ad revenues that pay the cost of expensive original TV programming, and Diller said that, at least in the foreseeable future, producers could have trouble tapping into these program expenditures.
The three other panelists — Leo Hindery, former president of broadband and Internet services for AT&T; Jerrald Kent, president and CEO of Charter Communications; and Michael Bloomberg, president and CEO of Bloomberg L.P. — all said that the cable industry is probably facing more competitive pressures than at any time in its history.
Hindery said satellite distributors like DirecTV and Echostar will induce still more people to cancel their cable subscriptions and buy dishes because the DBS companies will now be adding local TV stations to their mix of cable network and pay-per-view movies.
Telephone companies keep Kent awake nights, he said, because “they have tremendous political clout and they can throw lots of cash at keeping us from getting into telephony.”
Bloomberg chided the cable industry for relying too much on “legislative intervention” to try to keep cable’s competitors at bay. Instead, he continued, cable systems “should shower their customers with local service, get more trucks rolling” to subscribers’ homes, and not cut back on the number of employees, particularly what the industry calls CSRs (customer services representatives).
Love fest over
And the gentlemen’s agreement among cable operators not to encroach on each other’s territory is eroding, Hindery said, citing the move by Paul Allen’s RCN to, in effect, overbuild a competing cable system in Calfornia by offering similar services over wireless cable.
“The summer of love” among cable operators “is over,” Hindery said, leaving cable vulnerable to aggressive Internet companies, which are asking the government to open cable’s pipelines to, say, America Online.
Such a move, according to Hindery, could “open a Pandora’s box, which would unleash the demons,” such as streaming video, which could obliterate the existing structure of multichannel programming on cable systems.