News

Bring Back the Cable Show Bounce

5/11/2010 7:22 AM Eastern

Cable companies’ stocks used to look
for a bounce coming out of the National Show
convention, the annual showcase of what’s good
and what’s coming next.

This year the convention was so well-timed,
companies bounced ahead of time.
Too bad the bounce didn’t last longer.

Comcast and Time Warner Cable, the Big Two, reported
healthy first-quarter gains in Internet subscribers two weeks
ago. Comcast reported first (on April 28) and cable
stocks didn’t move much, as Comcast is in Wall
Street’s “penalty box” until the NBC Universal acquisition
gets done. When TWC weighed in with
healthy gains a day later, both stocks popped up by
high single digit percentages.

At cable networks, the spring is back in the steps
of their ad salesmen. As you’ll read in our Finance
section, money is flowing into television
time buys. News Corp., Time Warner Inc. and Discovery
Communications all had healthy gains in
the first quarter.

All seemed well with the multichannel universe.

The good feeling turned south last Thursday morning, as this
was being written.

Blame Federal Communications Commission chairman Julius
Genachowski and his new plan for “Title II Lite” governance
of cable high-speed Internet services.

Title II means common carrier — the way the government
used to regulate subsidized monopoly Ma Bell. Lite or not,
that’s a dark concept for cable operators whose broadband offerings
have been largely left to flourish on their own, as Title
I information services.

Genachowski, who spoke with our John Eggerton in Q&A
mode before disclosing this new plan, put investors
in a bad frame of mind with this news.

Cablevision and Charter earnings reports Thursday did not
lead to stock gains, needless to say. Of course the Dow’s glitchy
meltdown hurt, too. Timing is all.

As the chairman’s plans evolve, and responses to them intensify,
the impact could be mitigated. Or things could get
worse.

One thing is sure: it’s a good plan to go early for a seat at the
opening general session he’s keynoting Thursday morning at
the Nokia Theatre.

Maybe Genachowski was doing his best to drum
up interest in the Cable Show. Presumably he was
being a stand-up guy and getting this news out there
ahead of the convention, where he and other staffers can help fill in the blanks.

The convention seems to be doing well on its own.
Anecdotally, it was tracking on par with last year
headed into that Washington, D.C., gathering. Presumably
that means on part with expectations of
10,000 attendees. The 2009 convention ballooned to
more than 12,000 attendees, bolstered by hundreds
of walk-ins from Capitol Hill.

Also anecdotally, organizers at other events under
the Cable Connections umbrella were said to be doing
well (“making their budgets” was how one event organizer described
it to me). Hooray for Hollywood.

Regulation is one of those external overhangs that are ever
present with cable stocks. Competition is another, and the
news on that front is seemingly good for cable. DirecTV and
Dish Network seem to be content with bashing each other. Verizon’s
FiOS TV and ATT’s U-verse buildouts are slowing, although,
as FiOS chief Terry Denson told our Todd Spangler, there’s plenty of room for growth within the
markets already staked out.

Bounce on out to the Cable Show and we’ll see you there.

October