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A smaller but more select crowd at NCTA

May 13, 2002  •  Post A Comment

The National Cable & Telecommunications Association’s 51st annual national convention, held last week in New Orleans, saw its attendance drop, but that was the price the show paid to retain most of its high-profile exhibitors.
Unlike other industry shows in this troubled year, which saw both attendance and exhibitor numbers plummet, cable made it easier for its exhibitors to come back, offering them so-called “executive suites,” which were pre-made, turnkey booths that allowed the exhibitors to both save money and bring fewer people to the show.
Attendance was about 17,000, down some 7,000 from last year’s 24,000 in Chicago. That show, in turn, was down about 7,000 from the national show’s high-water mark in 2000, when 31,000 came to the industry’s annual convention.
Most exhibitors pronounced themselves satisfied with show traffic. “What [the convention] lost in numbers, it made up in demographics,” as one put it, alluding to the fact that cuts in the size of individual delegations often meant that the lowest-level staffers were the ones who stayed home.
As is often the case during trade shows, the biggest news affecting the industry happened elsewhere. This year it was the announcement that Adelphia Communications, the nation’s sixth-largest multiple system operator, is putting local cable systems-reaching almost 3 million of its 5.8 million subscribers-on the sales block.
The Coudersport, Pa.-based company’s board of directors authorized the solicitation of bids for systems in California, Florida, Virginia and other lucrative markets, primarily in the Southeast.
The “for sale” signs went up in the wake of disclosures that the Securities and Exchange Commission is investigating the company. So-called undervaluation of the cable sector’s stocks was one topic of central concern at the convention. In private, senior executives at other publicly traded companies often pointed to Adelphia’s troubles, including guaranteeing more than $2.3 billion in loans to its founding family, as being partly responsible for Wall Street’s diminished valuation of cable overall. The objective of the systems’ sale is to reduce debt, said John Rigas, Adelphia’s chairman, president and CEO, in a statement.
At the convention itself, Peter Chernin, president and chief operating officer, News Corp., made news during a panel when he revealed that Fox’s “24” and FX’s “The Shield” are coming to video-on-demand. Cablevision will offer the shows for free in exchange for promoting the two series. Mr. Chernin said it has yet to be decided whether the repurposed shows on VOD would carry commercials.
News Corp. and Cablevision Systems will shortly announce other specifics of the deal to bring the two high-profile series to Cablevision’s New York tri-state area digital subscribers.
News Corp., the nation’s largest broadcast station owner, also is exploring ways to use its local broadcast assets on cable, Mr. Chernin said. “There’s no reason we can’t be packaging a tremendous amount of valuable local content,” he said. “We have helicopters and traffic cameras all over every city we’re in. Should we be providing a traffic service that goes from six in the morning to nine in the morning? Should we be providing customized local weather? Should we be providing local culture: high-school sports channel, local sports channel, backstage in the locker room for the Knicks or the Rangers? We can create quality local product for the cable industry that satellite can never compete with.”
“Long term, the line between broadcast and cable breaks down completely,” said Robert Iger, president and COO, The Walt Disney Co. For a program to exist on broadcast alone will “probably not [be] feasible” without multiplexing, Mr. Iger said.
Like program production itself, multiplexing also has its financial-feasibility issue. Advertisers will have to support multiplexing with higher dollars for cable, said Jamie Kellner, chairman and CEO, Turner Broadcasting System, or it won’t succeed, pointing to the fact that early evidence suggests that broadcast’s hit series draw unduplicated audiences for their subsequent cable runs.
On the high-tech frontier, Mr. Kellner predicted that Hollywood, traditionally fearful of new technologies, will embrace cable and its video-on-demand as a platform for Hollywood studio films and other content as a way of fending off the threat of TiVo, Replay and other personal video recorders. In the era of TiVo, said John Hendricks, chairman and CEO, Discovery Communications, “marginal programmers” and “compromise viewing” will diminish because viewers who don’t find something to watch in real time will have their favorite programs stored on PVRs, so they won’t resort to channel surfing and settling for whatever’s on.
Cable stocks may be generally down and competition may be up, but there was a “sunny skies ahead” mood at the convention, too.
That’s how Comcast Corp. President Brian Roberts put it in New Orleans, referring to the broadband and digital technology with which cable intends to fend off satellite, entice subscribers to pay for new services, such as high-speed Internet access and VOD, and grab a piece of the huge-and hugely lucrative-telephony market. Interactive television “could become the Internet of the next generation,” said Mindy Herman, president and CEO, E! Entertainment Television.
Another reason for optimism: cable’s friends in Washington, most definitely including Rep. Billy Tauzin, chairman of the House Commerce Committee, and Chairman Michael Powell of the Federal Communications Commission, both of whom attended Cable 2002. “We want to protect you from those that want to regulate you to death,” Rep. Tauzin said.
“I believe in competition deeply,” said Mr. Powell. “Rules are dangerous,” often unintentionally creating a new set of problems in the process of solving the old ones, he added.
Even so, Mr. Powell warned the industry to “stop whining” and get on with the digital transition and the provision of high definition television. If the industry doesn’t heed his jawboning, he cautioned, Congress will step in with legislation.