Chicago -- Byron Allen of Entertainment Studio Networks hit a nerve when he said in a Cable Show session Tuesday that cable networks must significantly reduce their programming costs to stay competitive.
Speaking on the panel "Changing Channels: The Evolution of Targeted Networks in a Multi-Platform World," Allen, CEO of the independent producer/distributor, said it's never been a better time for independent networks to gain traction because of the competition from multi-platform devices.
"If you produce content and you produce it at an efficient price, there's an audience," he said. He went on to praise Netflix for providing an array of viewing options at an affordable price while chastising the cable industry for failing to contain costs that get passed on to subscribers while predicting viewer migration to cheaper forms of content delivery.
The sentiment didn't sit so well with the rest of the panelists, all heads of traditional cable networks, with some pointing out that viewer migration to cable platforms is merely additive to linear viewing.
"People are increasing their consumption of media," said Kim Martin, president and GM of WE tv and Wedding Central. "It's not like we're losing them, people are just consuming more."
"You need reach vehicles to make anything have scale," added Marc Juris, executive VP and GM of tru TV, saying that you have to combine a larger vehicle like cable TV and the Internet to reach a meaningful number of people.
Syfy President Dave Howe defended the cable business model as funding the necessity of expensive programming. "If you cut it beyond a certain threshold you will damage the business model and the value that you bring to the consumer."
And while Allen sang the praises of over-the-top for attracting writers and producers that want more creative freedom than a traditional network can provide, others argued the disparate nature of the vehicle can be a barrier to success.
"With YouTube there is no branding, it's just random shows with no context," said Henry Schleiff, president and GM of Investigation Discovery and Military Channel. "The importance of context that a linear channel and brand gives to these random shows and series is a very, very important element of why some succeed."
Attempting to moderate the linear vs. OTT debate, Cooking Channel GM Michael Smith calmed the mood by saying, "I don't think it's either or," citing how CDs didn't make people stop listening to radio. "What we have is a more diverse world. I see a world where everyone's right."