Decline of DVDs Is a Cable Opportunity to Open Windows

Video on Demand, Digital Poised to Fill the Breach, Comcast’s Burke Tells Journal Conference Attendees

By Gary Arlen -- Multichannel News, 6/7/2010 12:01:00 AM

Rancho Palos Verdes, Calif. — The decline of the DVD business — Hollywood’s current “biggest challenge” — is creating an “obvious solution” that the cable industry can provide: digital sellthrough and video on demand, said Comcast chief operating officer Steve Burke.

“We think we’ll be in a unique position to craft that solution,” Burke said at The Wall Street Journal’s D: All Things Digital conference. It’s essential for cable companies to develop such delivery solutions, he said.

“If we don’t create that model, eventually every content producer will put their material on the Internet,” Burke said.

Burke also addressed the timing issue with regard to distribution windows. “If you look at windows that exist today, they’ve been narrow. You want to have different windows but they must have a purpose,” he said.

The Comcast executive voiced optimism about ongoing retransmission- consent negotiations. He acknowledged that his company’s proposed deal for control of NBC Universal will be “on both sides” of those talks, but he thinks that most broadcasters are finding ways to resolve conflicts about the matter.

Throughout his remarks, Burke emphasized that “content and distribution are better together.”

“Content and distribution don’t naturally work together unless we make them work together,” Burke said. He also expressed enthusiasm about the role of Hulu, which Comcast will own a piece of after the NBC Universal joint venture with General Electric closes.

“Whether it’s Hulu or Fancast [Comcast’s own video replay service], people want their shows ... and are going to get their shows” anytime and everywhere, Burke said. He acknowledged that the ad-supported nature of the delivery “remains to be seen.”

Burke dismissed the competitive role of Google TV, calling such ventures “complementary.”

“Our real competitors are satellite and telephone companies,” he said. “To deliver the massive quantities of video, you really need an infrastructure that is facilities-based.”

“We’re not naïve. The first thing you do is invest … spend the money necessary [to attract] creative talent,” he added.

As the first speaker after Apple chairman and CEO Steve Jobs’ opening presentation here, Burke led the parade of flattery for Apple’s iPad, calling it a “pretty competitive” device. He cited Comcast CEO Brian Roberts’ recent presentation at The Cable Show in Los Angeles, where Roberts used an iPad as a real-time program navigation guide, and said, “It will be great.”

Burke said that he and Roberts visited Jobs at least five times in the past 10 years, often asking if Apple could build an interface for the cable operator. He said that Jobs always said “of course” but insisted that Comcast would have to “buy my hardware,” which was not an appealing option for the MSO.

As for 3DTV, another theme at this event, Burke said, it is “definitely coming,” but pointed out that another recent technology development — highdefinition TV — took more than a decade to develop a mainstream presence.

“HD has a different dynamic,” Burke said, noting that “it remains to be seen what percentage of that viewing will be done in 3D.”