Cable 2002, the 51st edition of the National Cable & Telecommunications Association’s conference, again finds the industry on the cusp of change and beset by important uncertainties.
As the cable industry gathers in New Orleans this week, issues on the agenda will include the AT&T-Comcast merger and further consolidation in the industry as well as AOL Time Warner’s recent decline in Wall Street value. Some say the media giant’s financial woes could inspire a spinoff of its cable systems or even a reversal of the AOL-Time Warner merger.
Insiders are also concerned about consumers’ reponse to new digital services and other technology-related opportunities that the industry finally has begun marketing aggressively. They are wondering whether this will be the year of the oft-promised digital transformation, and if it is not, whether Washington will step in. The overall hope is that legislators and regulators will not interfere and that the marketplace will be allowed to work itself out.
Those in the cable industry are also curious about the effectiveness of broadcast-to-cable repurposing and the impact of TiVo, now and in the future. Some soothsayers are alarmed by the imminent end of TV advertising as we know it, while others are sanguine, shrugging off personal video recorders as no more than the flavor of the month, confident the essentials of the advertising-supported television business will remain unchanged.
In short, mergers are pending, technology is changing, competition is increasing, more deregulation may be in the offing, and old limits and caps are being superseded. The satellite competition seems newly strengthened by its own pending mega-merger between EchoStar and DirecTV. Cable’s digital transformation may have slowed, but it seems poised again to pick up speed. Clearly this year’s crop of cable opportunities and dangers often grow from the very same evolving circumstances.
The national show will be downsized this year. Last year’s Chicago national show had approximately 24,000 attendees, down from the millennium year’s high-watermark of 31,000. NCTA organizers have declined to disclose preregistration attendance estimates this year, but since some New Orleans hotels are reporting steep drop-offs from expected occupancy levels for the show, no one will be surprised if attendance dips below 20,000.
This year’s exhibitor count is 200-plus, according to the NCTA, compared with last year’s approximately 250 exhibitors. Another sign of the times is the heavy tech presence at this year’s show. Like the National Association of Television Program Executives conference and the Western Show before it, Cable 2002 will seem less like a programming fair than like a techno expo.
“Ten years ago, we would walk the floors of NCTA and it was Disneyland, it was a wonderful carnival atmosphere,” said Ed Tettemer, CEO of Red Tettemer, the Philadelphia-based advertising agency that counts major cable operators and networks among its core clients. “Now it’s a tech show. It’s not a show about programming, it’s not a show about a lot of fun. The glamour of the entertainment side of the business is not as in evidence, but that’s just the nature of it.”
Nonetheless, there will still be photo ops aplenty at the convention, with celebrities ranging from the pop (Pat Benatar at WE’s booth) to the political (Neil Bush, the president’s brother, speaking at the convention’s “Cable in the Classroom” presentation).
Looking back even further, to two decades ago, Michael Willner, president and CEO of Insight Communications and the chairman of the NCTA board of directors, recalled a cable industry that was composed of hundreds of companies and that served about 20 million subscribers. Today, cable has “69 [million] to 70 million subscribers, [and] 90 percent of them are served by the top 10 companies,” Mr. Willner said.
Back then, “There were 30 or even fewer … national cable networks,” Mr. Willner said. Today, “There are more than 300 national, regional and local cable networks available [and] … many of those are owned and operated by companies that are both in the cable business and the broadcast business.”
The biggest change in the cable business, however, is the conversion from just delivering analog to “multiple streams of revenue” from digital offerings that include “voice, video and data [and] high-speed access to the Internet,” Mr. Willner said.
This year, the convention is “exhibit-floor-centric,” said Maggie Wilderotter, NCTA convention chairwoman and president and CEO, Wink Communications. That means that not only the booths and exhibits, but even the pressroom, will be on the same exhibit floor.
A post-convention-2001 task force, headed by Ms. Wilderotter and composed of 20 to 25 other members, came up with recommendations for this year’s show, most prominently the “executive suite” concept that was meant to pre-empt the exhibitor defections that so negatively impacted the Western Show and NATPE. “The concept is prefabricated suites, totally self-contained and ready to use,” available for the exhibiting companies, which then don’t have to store or transport their own expensive booths, and need, therefore, fewer people at the show, Ms. Wilderotter said.
More “liberal hours” for the booths, which will be open from 7:30 a.m. until 7:30 p.m., is another way NCTA is helping its exhibitors cut expenses, Ms. Wilderotter said.
The theme of the show is “Connecting America,” she said. “The show will demonstrate that cable today is connecting America with reliable, affordable and innovative services that consumers value, including quality television programming, interactive and high-definition television services, high-speed Internet access and competitive local telephone service.”
Competition is also heavy on the industry’s mind as it gathers in New Orleans-not only competition with satellite providers that are siphoning off customers and now have 18-million-plus subscribers and a 23 percent market share, but competition with telephone companies and wireless providers. “There’s not a business that we’re in that we’re not competing in a dogfight every day for customers,” Mr. Willner said.
As the convention gets under way, the industry’s “mood … is mixed,” he said. “The show is “truly reflective of a very changing American society.”