Cable Chiefs: We’re Hurting Telcos More Than They’re Hurting Us

Operators Say It's Easier for Cable to Recruit Phone Customers

By Mike Farrell -- Multichannel News, May 7, 2007

Las Vegas – A trio of top cable executives kicked off The Cable Show '07 general session here Monday, assuring the audience gathered at the Mandalay Bay Convention Center that cable companies will continue to fight off competitive threats with new and better products.

Cable operators have already been ahead of the competitive curve with high-speed-Internet and video-on-demand services, and voice services from cable operators are growing at a quickening pace. At the general session, moderator and Cable & Telecommunications Association for Marketing CEO Char Beales mentioned a startling statistic -- at Cox Communications, for every video customer the Atlanta-based cable operator loses to a phone company, Cox gains 50 voice customers from the incumbent phone carrier.

Comcast chief operating officer Steve Burke said that the ratio isn’t quite as high at his company, but he envisions that Comcast will continue to outpace the competition for a long time to come.

“I think their ability to get our video subscribers will be more limited than our ability to get their phone subscribers,” Burke said. “It’s going to stay that way for a long time.”

Time Warner Cable CEO Glenn Britt said that one of the ways cable has managed to stay ahead of the competitive curve is by continuously introducing new products. He mentioned Time Warner’s much-ballyhooed Start Over program-replay service, which allows customers to view programs from the beginning if the service is activated within its original airing time, and its various iterations -- Look Back, which will allow customers to replay programs that are at least 48 hours old and Catch Up, which would let customers view a few past episodes of a series to “catch up” with the storyline.

“I think we’ve just begun to scratch the surface,” Britt said.

Burke said that “day-and-date” trials -- where a VOD movie is available on cable simultaneously with DVD-rental releases -- conducted by the company have been encouraging. And it has inspired him to think about taking the technology a step further.

“Spider-Man (3) came out this weekend. and you could imagine a situation where we put Spider-Man on in a pay-per-view fashion, concomitant with the opening weekend, and charge $30 or $50 or some price that is high enough that it obviously is going to have some effect on theatrical distribution,” Burke said. “I’m sure movie theaters may not like that kind of competition, but at the end of the day, consumers want what they want when they want it, and it’s our job to be creative with breaking down those windows.”

Later, Burke said Comcast has had some early talks with studios about such a service.

Cablevision Systems chief operating officer Tom Rutledge -- whose company has pioneered cable voice and has industry leading penetration rates in video, voice and high-speed data -- said another area of growth potential lies in commercial telecommunications service. And residential service has helped lto ay the foundation for success with small and midsized businesses.

“Part of the process is having the credibility to sell to the small-business marketplace,” Rutledge added. “Where do those small businesses people live? They live in residential dwellings that you serve with your residential product. You have to have a successful residential business and a successful credibility that your products work.”