As you read this, I'm in the Windy City, in my role as chairman for the 52nd annual National Show. I've been coming to these shows since 1976, which seems a lifetime — and is for some of our current colleagues. Over the years, I've seen a lot of changes in our business and in the world around us.
It was these kinds of changes — and the benefits they've brought our customers — that led to this year's theme for the show: Leading the Digital Revolution. It may seem like just a catchy title until you reflect on how many of the activities we'll have at this year's convention that truly are "new and improved." Whether it's on-demand content, HDTV, high-speed Internet access, or cable phone service, it's gratifying to realize that they're all here today and in customers' homes.
We've talked about some of these services for years. Others are services we didn't even know we could provide until recently. When you walk around the show floor, you may have the same thought I will: "The future is here."
These new services are not a radical departure for the cable industry. They are just the latest in a long line of technological advances that cable has made. This is truly an industry of innovation, which doesn't just mean that we came up with some cool ideas. We are implementing them. As Harvard marketing guru Theodore Levitt said, "Creativity is thinking up new things. Innovation is doing new things."
After all, plenty of businesses have come up with revolutionary concepts and thrilling buzzwords. The cable industry claimed "interactive," "500 channel" and "broadband." But we in the cable industry actually built it, with $75 billion of our own money, and we took it to the marketplace. Cable today has 20 million digital-cable customers, 12 million cable-modem customers and 2.5 million residential phone customers. Judging by the response from consumers, I'd say our efforts have been well received.
From entrepreneurs stringing up wire in the late 1940s to visionaries using satellites in the mid-1970s, our roots are in innovation, and in creating new value for customers. All of our latest bells-and-whistles aren't about technology, but about pleasing the people who will use them. Content that isn't compelling to begin with won't be improved just because it's in high-definition and ordered at the push of a button. But content that is
compelling can be improved for the viewer with the added qualities of choice, convenience and control.
That's why Showtime and other programmers have introduced such services as video-on-demand, subscription VOD and HDTV. In the case of on-demand programming, it's clear that the notion of linear programming grids has become less necessary with the changing media landscape. There are some viewers who just want to plop down on the couch and watch what's on. But there's a growing tide of other viewers who wish to have greater control of their viewing choices. One of cable's great strengths is our ability to respond to the needs of our customers.
Spirit of innovation
This strength is also evident in cable's HDTV rollout. Consumers are increasingly interested in it and are seeking it. The number of programmers providing HD content continues to rise; and the HD Pavilion will showcase content from nine programming suppliers drawn from cable alone. More HDTV programming announcements will be made this week at the National Show. Cable operator HDTV deployment also is very encouraging, as 78 of the top 100 designated market areas — and 34 markets beyond the top-100 — are currently served by at least one cable operator offering HDTV service.
The spirit of innovation is quite visible this week in Chicago. You'll see it in programmer and vendor exhibits on the show floor. And you'll hear it ringing throughout the panel discussions and the general sessions. It's a hallmark of our industry. The competitive landscape continues to grow more complex, but if we can continue on our mission of delivering value, we'll continue to thrive.
We face challenges, but innovation is born of meeting challenges. We must reach out to an increasingly diverse customer base, respond to very stiff competition, build stronger relationships among operators and programmers, and manage the technical issues of the digital transition.
We have a great product that gets better every day. And we have an industry that has risen to the occasion – and delivered. We are leading the digital revolution.