European cablers cash in on recession

Economic crisis boosts home entertainment

Budapest– If international entertainment has been hit by the economic crisis, European cablers are taking advantage of it.

Innovation, penetration and sales strategies were the hot topics at CTAM Europe’s seventh EuroSummit 2010 cable marketing conference, which wrapped Friday in Budapest after two days of meetings.

The Cable and Telecommunications Assn. for Marketing is a non-profit, professional membership org started in the U.S. in 1975 to advance marketing excellence in the cable industry and promote new technologies and strategic learning in cable, broadband and other emerging media.

Liberty Global prexy and CEO Michael T. Fries told summit attendees, “Cable is hot in Europe now. I’m not sure it ever was cold.”

As in the U.S., Euro cablers reported strong business during the recession as cash-strapped viewers did without expensive holidays and dinners out and stayed at home with their bigscreen TVs and home entertainment.

“Pay TV actually picked up in the crisis,” said CTAM Europe general manager Krisztina Homolay. “Large cable operations are growing and expanding.”

Fries identifies Europe as a market that is growing beyond expectations in key areas such as broadband, saying that by the end of 2010 the continental market will reach broadband penetration goals originally established for 2020.

Fries added that Europe is lagging behind the U.S. in other areas, such as digital video, and he admits there is competition to cable from Internet and telcos.

Homolay said this competition may be inspiring cablers to place more emphasis on marketing than ever before.

There is a sense at the conference of joining together and brainstorming, Homolay said. “Cable people are saying, ‘Let’s get together and figure out ways to sell the entertainment.’ ”

Despite gains by Internet and telcos in programming and video distribution, Fries said cable still had the upper hand.

“I think a lot about Internet TV, but I don’t see a big effect yet,” he said. “So far it isn’t a substitute.”

And telcos, Fries said, are still struggling with the learning curve of selling video content over their systems, while cablers had “easily” appropriated the telco markets of telecommunication and data transfer.

Fries said, “Half of our revenue now comes from voice and data.”

Competition and the economic crisis are factors but Fries argued that the current innovation — DVR, HD and so on — is the real engine driving interest in cable.