Growth of Internet video, social media and other services help auds connect to TV
WASHINGTON — Cable’s broadband infrastructure investments laid the foundation for a wide range of innovations, including potential rival Internet video services — but those have kept TV viewers more connected to their favorite skeins rather than driving them to cut the cord, according to industry execs.
That was the rosy consensus of panelists at the opening sesh here at the Cable Show 2013, which included execs from TV programmers, technology companies and just one cable operator (Charter topper Tom Rutledge).
Internet video services like Netflix along with social media are making cable auds even bigger, according to AMC Networks prexy and CEO Josh Sapan (pictured, above). Ratings for 70% of AMC’s scripted series have increased in subsequent seasons “where TV historically gotten long in the tooth,” he said.
“We’ve seen these escalations on these TV shows… They have been enabled by this disruption,” Sapan said, referring to cabler’s “The Walking Dead” as an “eternal zombie movie that never ends.” “The audience is just getting bigger. I’d look at all this stuff as cool, not worrisome.”
Asked by panel moderator Cynthia Littleton, Variety’s editor-in-chief of TV, whether subscription video services like Netflix could cut into cable viewing, Sapan acknowledged that “there’s always the specter of friends turning into foes, or growing up to be foes.”
Cord-cutting, while small today, is a real phenomenon as overall more pay TV subscribers have dropped their service in the past year than signed up, industry statistics prove.
But even over-the-top video boxes like Roku’s can help the cable TV industry, according to Steve Shannon, the company’s GM of content and services. About 70% of Roku’s 5 million-plus users are cable customers, and about three quarters of them “are ascribing new value to the pay-TV package because of the TV Everywhere apps on their Roku box,” he said.
AMC and other cable nets are careful about licensing past seasons to SVOD services, providing new avenues for viewers to get hooked on a show for the following run, Sapan said: “It’s a big juice-up for cable TV.”
Anne Sweeney, prexy of Disney/ABC Television Group, agreed that serialized television benefits from new technologies and services. “It’s all about the windowing strategy,” she said.
ABC is positioned to be a “disruptive” company, Sweeney claimed, in delivering TV Everywhere services like WatchESPN, WatchABC and WatchDisneyChannel. But it’s “disruptive in a way that is part of this great ecosystem, because it’s done in concert with the MVPDs (multichannel video programming distributors),” she said.
Matt Blank, Showtime Networks chairman and CEO, agreed that SVOD is an attractive source of revenue and a way to expand the reach of original TV series.
Even with exploding Internet video options, “we’ve never had better performance,” Blank said. “It’s about making great content, and controlling as much of that content as possible.”
Charter’s Rutledge, the lone MSO represented on the morning’s panels, allowed that Internet-delivered video causes regulatory and business issues that need to be sorted out. But at the end of the day, “it’s all television.” Ultimately, increased usage of cable’s broadband infrastructure helps the bottom line.
“We are spending billions of dollars a year on technology development,” Rutledge said. “I’d like to go faster, even though we’re going very fast and the capacity of the networks is going up.”
All told, cable operators have invested more than $200 billion in infrastructure between 1996 and 2013, according to National Cable & Telecommunications Assn. president and CEO Michael Powell. The industry now serves more than 50 million broadband customers and offers service to 93% of American homes.
“America is home to the world’s very best Internet companies,” which have used cable’s broadband platform to deliver new services, Powell said.
But Big Cable is still a slow-moving behemoth amid more agile Silicon Valley flora and fauna, according to Jawbone CEO Hosain Rahman. He said his company, which makes wireless headsets, is developing a product with Comcast. Compared with cable operators like Comcast, “We are sort of just used to a different pace in how we bring products and services to market,” he said.
Oddly, the Cable Show was opened by 51-year-old MC Hammer, who performed his 1991 hit “2 Legit 2 Quit.” Perhaps the implied message was that cable’s still going strong after all these decades, although the same cannot be said of Mr. Hammer’s popularity.