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Cable industry warns programmers on rush to Web
May 12, 2010 / 2:02 AM / 7 years ago

Cable industry warns programmers on rush to Web

LOS ANGELES (Reuters) - Cable TV executives on Tuesday warned the industry against rushing to put their best shows on the Web and other platforms before figuring out business models that won’t cannibalize existing revenues on television.

Top cable executives gathered at the annual Cable Show event here to discuss, among other things, the best way to deal with a proliferation of new Web-based and wireless services which enable their subscribers to access programing without subscribing to their cable operator.

“This jump to put long-form content on all these platforms didn’t make business sense and didn’t make consumer sense,” Discovery Communications Chief Executive David Zaslav said on a panel with other executives.

Zaslav said there had been a “rush in the industry to put quality content on a range of platforms.”

“Long form content on all these platforms is diminishing the value of your cable customer,” Zaslav added to applause from an audience of hundreds of cable executives.

Discovery has been a leader in offering short-form versions of its popular shows online but has declined from pushing full-length shows.

Viacom Chief Executive Phillipe Dauman said his company continues to experiment with new forms of content distribution with partners and said that the “business models will evolve.”

Cable programing distributors like Time Warner Cable Inc and Comcast Corp are keen to continue to have a say in the aggregation of programing on a range of platforms beyond linear TV, such as Apple Inc’s iPad tablet computer and Netflix.

Patrick Esser, president of privately held Cox Communications, said, “We’re on a journey to move these to other platforms. It’s a change about how we distribute content.”

Cable’s worries have been worsened by infighting between the programmers and the distributors over affiliate fees.

In the last six months there have been high-profile programing disputes between Time Warner Cable and News Corp and Cablevision Systems Corp and Scripps Networks among others.

Programmers fear they will lose viewers if they do not raise affiliate fees to help make more competitive programing. On the other hand, distributors worry about having to pass on higher programing costs to customers and drive these subscribers to seek video entertainment elsewhere.

Esser warned his fellow executives against the long-term damage of the disputes to the industry.

“If we disrupt our customers’ lives by taking channels away and putting them back on we invite other people into this discussion.”

While executives were positive about the impact of technology on the industry in general they cautioned against rolling out 3-D services in a hurry.

Major cable companies have been experimenting with 3-D programing with the hope of catching on to the next big consumer technology trend.

Time Warner Cable CEO Glenn Britt said the industry should be patient with consumers’ adoption of technology.

“We have to pay attention to the consumer. It can’t be us pushing this; it’s got to come from the consumer.”

Reporting by Yinka Adegoke; Editing by Richard Chang

Our Standards:The Thomson Reuters Trust Principles.
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