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Execs Eye Services of Next Five Years

5/28/2000 8:00 PM Eastern

There's a digital-storage facility at Scripps Networks' headquarters in Knoxville, Tenn., which can store 36,000 half-hour programs. So far, Scripps has only stored 6,000 hours. It sounds interesting, but what's the point?

That's one of the things Susan Packard, president of Scripps New Ventures Group, is trying to figure out. It probably has something to do with video-on-demand, but the company will have a better idea of the type of services it will be able to offer in a couple of years, she said.

About 200 miles south of Scripps' headquarters, Braxton Jarratt is looking at the big picture of digital from the gatekeeper's point of view, at Cox Communications Inc.'s home office in Atlanta, where he is director of business development and interactive services.

His charge: to figure out what Cox will pitch to its subscribers five years from now. Home networking-which links multiple appliances in a home to cable's broadband pipe-is going to be big, Jarratt said.

In Philadelphia, Comcast Corp. senior vice president of strategic planning Mark Coblitz is looking for new projects now that the company's VOD plans have moved beyond the trial phase.

He's also helping Comcast vice chairman Julian Brodsky and other executives to pick which start-ups the company's Comcast Interactive Capital Group should invest in. Those home networks are taking up a lot of his time, too.

Meet three of the cable industry's big thinkers-executives charged with planning what services to offer cable subscribers through the next generation of technology. Like their counterparts at other companies, these executives spend a good chunk of their time looking at current systems and trials, but they devote most of their days looking into the future-but not too far into the future.

"I think the best you can look at is perhaps five years out," said Packard, who left her post as chief operating officer of Scripps' Home & Garden Television in January to launch the company's New Ventures division.

"I'm a builder, and that's where my greatest value lies to companies, and at the same time, [Scripps Networks] CEO Ken Lowe was asking Scripps Networks to push out and build more businesses, so I frankly volunteered," Packard said. "It's really what I enjoy doing most."

While Packard is still involved in the day-to-day operations at Scripps, she said she spends the majority of her time looking at new ventures, focused on three key areas: the creation of new cable networks, exploring interactive-television ventures and looking at "platforms to create ubiquitous platforms for our brands," such as VOD and the Internet.

Scripps-which currently distributes Food Network and digi-net Do It Yourself, in addition to HGTV-will soon unveil a fourth network. Packard wouldn't discuss details of the new service, only saying that it would be in the lifestyle-programming category, which is Scripps' core focus.

The creation of new networks requires Scripps to look five years into the future, Packard said. On interactive television, Scripps so far has cut deals with Microsoft Corp.'s WebTV Networks, WorldGate Communications Inc. and RespondTV Inc.

Packard said she looks 24 months out when planning some of those services, which is when she expects the whole interactive-television arena to see "some significant action. And Web-enhanced initiatives, which is another part of what we do, is today."

Back to that digital-storage facility, which is housed at the new 80,000-square-foot technology center Scripps built at its Knoxville headquarters. Packard said she's currently exploring VOD options for the company's digital networks, which would originate from the storage facility.

For example, she said, once DIY has distribution deals with a majority of MSOs, "at that point in time, it might make sense to look at dicing it up into segments, putting it on servers and allowing a true-video-on demand experience, instead of a linear human experience."

The company would charge subscribers for videos on topics such as "How to build a deck," Packard said, noting that consumers pay $2 or $3 at video stores to rent videos on similar topics.

While Packard and Jarratt said they both spend a lot of their time focused on existing operations-such as how Jarratt is currently working on Cox's VOD trial-Coblitz said he doesn't have much day-to-day involvement with Comcast's cable operations.

He led the company's commercial launch of cable-modem service and VOD. The VOD trials are now moving into the cable division, he added.

Comcast is currently conducting a PacketCable telephony trial, so that remains on his plate. But Coblitz said he will soon pass that off to the cable division, where he works closely with Comcast Cable Communications Inc. executive vice president of marketing and customer service Dave Watson and chief technology officer Brad Dusto, who execute the development plans.

"The good news is when it moves from me and my thinking into the operating company, because that means we've actually created something that's real," he said.

Coblitz-the chairman of Cable Television Laboratories Inc.'s PacketCable committee and one of the people who came up with the Data Over Cable Service Interface Specification-said he spends about one-quarter of his day focusing on industry issues.

He was also chairman of the CableLabs DOCSIS committee.

"I'm focused on, how do you make it a business? How do we take technology and take something that is happening out there, and how do we at Comcast turn it into a business?" he said.

"And if the 'how we turn it into a business' requires industry consensus or specifications, or even standards, then the place where I try to put my efforts will be in the industry bodies that are making that happen, whether that's [the] NCTA [National Cable Television Association] or CableLabs," Coblitz added.

While he doesn't focus on applications such as delivering Internet access through a set-top box, he does look at how the company could offer direct-response advertising and home networking through digital set-tops.

Both Coblitz and Jarratt said they expect home networking-in which cable's broadband pipe will connect multiple information appliances in the home through cable or wireless delivery-to be a huge area of growth for the cable industry.

While few homes currently have multiple PCs, Jarrat said, small wireless devices, similar to the "i-opener" product from Netpliance Inc., have a big potential. Home-networking devices could include devices parents could give their kids, offering Internet access and e-mail, or devices in the kitchen that could contain recipes or other information.

"Do I want to pay another service provider $20-plus per month just to have access in my kitchen or my kids' bedroom? I think most people are not going to want to do that. I think if we can offer a solution that lets you piggyback on top of your existing broadband, always-on connection and still get those good price points, than that's the thing that's really compelling to customers," Jarratt said.

Jarratt also spends much of his time focused on the types of services Cox will be able to offer through next-generation set-tops like the Motorola Broadband Communications Sector "DCT-5000" and the Scientific-Atlanta Inc. "Explorer 6000."

The set-tops Cox has deployed often run applications based on proprietary technology, which require a significant amount of time for software integration. But Jarratt said the new set-tops, which will run services based on open standards, will change the way the company does business.

"The way we deal with vendors coming in on these lower-end boxes is, 'Are you already integrated on the EPG [electronic program guide]? Are you running on the boxes?' And if they say no and no, then we basically can't do business with them. But on the open boxes, we really can almost spec what it is we want and consider almost any vendor," Jarratt said.

Two projects Cox is aggressively pursuing now are VOD and Internet access through the television. Cox will offer a HyperText Markup Language browser through the set-top and, within three to five years, the set-tops will offer "Flash" and "Java" applications.

The VOD platform will allow Cox to layer on additional services, including offering subscribers the same functions as personal-video recorders from companies like TiVo Inc. and ReplayTV Inc. Rather than storing television programming in a set-top, Cox could store it on servers, he explained.

"If we see some of the economics continue to improve on simultaneous streaming and we can optimize bandwidth, we may be able to justify offering that service for a more compelling fee," Jarratt said.

Surprisingly, none of the development executives said they look beyond five years into the future. "Up to five years is about as far as we dare to even consider these days," Jarratt said, noting how quickly technology is changing.

Coblitz said it's hard to predict what will happen even beyond 2002. "If you start thinking about the world as, 'Oh, gee, I've come up with this great product that we might be able to do in five years,' that's nice," he added. "There's not much you can do about it today. The thing you do about it today is to make sure that the platform you develop is as versatile as you can possibly make it, and that in the rush to do a product today, you don't negate your ability to do a set of products tomorrow."

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