The 2012 Cable Show's opening session felt the opening of a political campaign, and in some ways, that's exactly what it was — full of talk about innovation, change, and meeting the people's needs, the whole event is designed to rally the industry around the future of cable in a vastly changing media landscape. But beneath the acknowledgement of the rapid changes underway and cable's need to evolve along with them was a strong defense of providers and networks continuing to do business exactly as they have done for the last four decades or so.
Michael Powell, former FCC chairman and current president and CEO of the host National Cable & Telecommunications Association, laid things out in his remarks that opened the show, saying that consumers "want the ability to get content that we paid for here, there, and everywhere. We say to consumers: ‘we've heard your wish'... you should get greater value from what you pay [for]." Powell's sentiments were echoed by Time Warner president and CEO Glenn Britt, who noted that "we have a lot of devices that act like TVs now," going on to say that "consumers want their TV on all devices."
We're a long way from having our cable content "here, there, and everywhere"
Unfortunately, that's far from a reality at this point, with most cable content tied to the same screen as your cable box. TWC's app may stream live TV to the iPad now, but only if you're on the same wireless network as your cable box; similarly, Xfinity On Demand for the Xbox 360 only works if your console is hooked up to your home network. While these new options provide viewers do provide viewers with more flexibility, that flexibility is currently limited to your home — that's a long way from "here, there, and everywhere."
Another potential disruption that doesn't appear to be in the plans is a la carte cable programming — the option to selectively subscribe to just the 10 or 20 channels you care about instead of the 200 or 300 most providers offer. A la carte cable has been a controversial proposition for decades now, but not even the power of the internet appears to be pushing the industry forward. Not 15 minutes after Powell's opening remarks on giving consumers greater value for their money, Glenn Britt simultaneously derided and defended the traditional cable subscription model, noting that the main cable product "seems quaint and old fashioned" and "isn't cool anymore," but adding that "this idea of selling a package of TV programming as a subscription remains very powerful." Similarly, David Zaslav, president and CEO of the Discovery Network, sounds perfectly happy with cable's old model, saying that "we have worked out a great industry model with the cable distributors, and if we work together I think we can continue to grow."
"We have worked out a great industry model with the cable distributors"
The power that both Britt and Zaslav mentioned comes from, as Britt said, the "close to 90 percent of the TV-homes in American [that] subscribe to multi-channel TV packages" — but that figure could also be a good example of how cable companies can hold customers hostage. Cord-cutting might be a more viable strategy for a lot of consumers if not for those one or two programs that just can't be had anywhere else. Whether it's catching a favorite sports team live all season long or watching the new season of Curb Your Enthusiasm (typically 10 episodes and only a little more than five hours of total content) as soon as it airs — as long as customers are willing to keep opening their wallets, cable companies have little incentive to change their model.
Zaslav is happy with the status quo with seemingly good reason. He's using Discovery's cash to keep funding his programming (Discovery spent over $1 billion on content last year, up from $550 million five years ago) and doesn't think that a la carte provides the same revenue stream. He think the deals "that we did with Apple for a la carte didn't make sense for us at Discovery, and I think that if you look at the economics it doesn't make sense for us as an industry." Zaslav insists that Discovery needs to harness the "power of our content" and "put our content on platforms that are sustainably economic."
Cable's biggest players aren't yet sure how to respond to the digital age
Of course, if Apple or a la carte isn't the answer, what is? It seems as if some of cable's biggest players aren't quite sure yet. Zaslav straight up admitted that "we don't know what the customer wants" in regards to digital content — currently, Discovery is experimenting with shorter-form content for mobile devices as a way of augmenting its longer, more heavily produced shows. If only Zaslav had listened to Powell's opening remarks on consumers taking their TV with them everywhere they go, he might have had his answer. Britt appeared a little more in touch with consumer behavior than he did last week when he said he wasn't sure what Apple's AirPlay technology is — but only through his acknowledgement that consumers want to view their media across every screen and on every device. Concrete steps to get the industry to that point, sadly, were missing in action
At the end of the day, perhaps the best analogy for the cable industry might have been the 2012 Cable Show's opening performance — a band of four iPad-toting musicians and one sunglass-wearing singer came out to perform a truncated version of the U2 classic "Where the Streets Have No Name." The performance, on the surface, was on the cutting edge, with no traditional instruments involved... but the band was performing a 25-year-old tune. The irony of combining the gear of the future while playing the same old song appears to have been lost on both the performers and the speakers that followed.