From Microsoft Chairman Bill Gates to Federal Communications Commission Chairman Michael Powell, an abundance of high-profile personalities are expected at the National Cable & Telecommunications Association’s 52nd annual National Show, under way this week in Chicago.
Organizers estimate this year’s convention will draw 17,000-plus attendees and some 200 exhibitors, approximately the same numbers that attended last year’s show in New Orleans.
Senior multiple system operator and network executives will appear on panels, and senior legislators and regulators, who hold the industry’s future in their hands, will be in attendance and speaking.
But the profile the show’s organizers want the industry to focus on most intently this year is the slim outline of the 63-inch plasma-screen high-definition display with Dolby Digital 5.1 surround sound that will likely be the largest of the 50 or so high-definition monitors on display in Chicago, showing crystal-clear realistic content from more than a dozen cable and broadcast networks, in the show’s new 8,000-square-foot HD Pavilion.
Hi-Def is Here
After years of hype about the glories of the 500-channel, high-tech future, high-definition television is finally here, and this year’s National Show will push it hard. According to data the NCTA is expected to release this week, HD has already been launched by at least one cable operator in 78 of the top 100 media markets, including 18 of the top 20, and is currently available to 55 million television households, a 50 percent growth spurt since the first of the year.
These most recent NCTA HDTV numbers also show a sharp rise in HD availability just since March 1, when, according the NCTA, HDTV was available in 73 of the top 100 media markets, reaching just 45 million television households.
In addition, 34 markets beyond the top 100 also have a cable operator offering HDTV, bringing the total number of DMAs in which at least one cable operator is offering a package of HD channels to 112 of the 210 DMAs nationwide, according to the NCTA
The cable industry has invested $75 billion since 1996 to upgrade its infrastructure and launch advanced broadband services, including HDTV, according to Robert Sachs, president and CEO, NCTA.
HD content providers at the HD Pavilion are expected to include HBO High Definition, Cinemax High Definition, Showtime Networks, Discovery HD Theater, ESPN HD, A&E Television Networks, The History Channel, Madison Square Garden Networks, Bravo HD Plus, Comcast Sportsnet HDTV, HD Net, PBS, NBC, ABC, CBS, and The WB and WGN, according to Mike Schwartz, senior VP, communications, CableLabs.
“The future really is here,” said Matt Blank, chairman and CEO, Showtime Networks, and chairman of this year’s NCTA Convention committee. He recalled his first NCTA in 1976: “We talked about the services we would deliver in the future, and some of the things we talked about were the 500-channel universe, and we talked about [video-on-demand] and we talked about high-definition television. I think there are four or five periods of time when we talked about high-definition television, and it proved to be pie in the sky.”
Burning Churn
The biggest issue facing the cable industry last year was stanching the loss of customers, primarily in the old AT&T systems that Comcast acquired, Brian Roberts, president and CEO, Comcast Corp., the nation’s largest MSO, told TelevisionWeek recently. “We’ve done that,” he said. “Whereas AT&T lost 500,000 customers last year … we’re going to gain 75 [thousand] to 100,000 this year.”
In fact, the mega-churn at AT&T accounted for roughly two-thirds of the approximately 750,000 cable subscribers that were lost industry wide last year.
Going into the convention, the biggest single issue facing the cable industry after last year’s corporate scandals, which included the fall of Adelphia’s founding Rigas family, is to restore confidence in the industry’s companies, said Mr. Roberts, who is widely referred to as the new “King of Cable.”
The second priority he cited is to make video-on-demand really take off.
The cable industry also is likely to huddle about several other topics during panel sessions and meetings this week. Among them:
* Competition from satellite, which is expected to stiffen once Rupert Murdoch’s News Corp. takes over DirecTV;
* The impact of the FCC’s proposed media deregulation;
* The expected rise of regional sports networks and their impact on sky-high rights fees;
* The best uses of bandwidth, which even in the era of broadband has its limits and trade-offs;
* And consumer response, in a tough economic climate, to the industry’s new, and in some cases expensive, high-tech offerings, from cable modems and telephony to VOD and HDTV.
“You may see a $1,000 high-definition TV set by the Christmas season,” Mr. Roberts said. “We’re working with retailers like Best Buy and others so that when you go in you can come away with a Comcast high-definition hookup right at the time you make this big investment in a TV set.”
Comcast’s big competitor in the next few years may well be Mr. Murdoch’s expected North American satellite operation, rather than other MSOs. Senior satellite-industry officials predict cable will draw its new customers in the years ahead primarily from the big urban areas, which are already wired and have the infrastructure to offer high-tech digital services, while the satellite industry will make its advances in rural areas, suburbs and smaller cities where cable may not offer its top-tier services. Apprised of satellite’s contention, Mr. Roberts told TelevisionWeek that Comcast would compete with direct broadcast satellite on a nationwide basis, ceding no geographic territories to DBS.
Cable operators, on the other hand, have voiced the fear that Mr. Murdoch will use the leverage gained from the acquisition of DirecTV to wrest carriage and cost concessions from them for his programming. Asked recently by TelevisionWeek whether the DirecTV deal was about distribution or programming, Mr. Murdoch replied sharply: “Purely about distribution.”