Cable Wants Web Video to Be Friend, Not Foe

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Las Vegas --- Millions of hours of Internet video content won't drown out the cable business, according to panelists at a discussion Tuesday morning at the International Consumer Electronics Show here.

Cable operators and other service providers will continue playing the central role in delivering all types of video programming to the home, and they will begin offering more content produced for the Web both on TV or on broadband, said speakers on the panel, “Content Is the Connection: The Migration to Multiple Platforms,” hosted by Multichannel News and sister publication Broadcasting & Cable.

“The Internet will not be able to replace the eight hours and 11 minutes of TV the average household watches per day,” said Peter Stern, Time Warner Cable’s executive vice president of product management. “There’s not sufficient bandwidth today … to deliver that video programming to large numbers of people.”

But Bill Wheaton, VP of digital media at content-distribution network provider Akamai Technologies, noted that as products such as Apple’s TV device -- announced Tuesday -- begin to gain traction, “I think you’re going to see a real run at getting a TV experience off an IP [Internet-protocol] network.”

It’s an open question, however, how much content from the Web consumers will find worth paying for or watching on a big-screen TV. For example, Time Warner Cable estimated that 31 million hours of video content were produced for public consumption in 2006. More than 30 million of those hours, according to Stern, weren't very high-quality. The bulk of that content, in other words, will be available primarily in an ad-supported model, either on the Internet or through services offered by operators.

“For only the very, very highest-quality content -- like the major series from HBO and Showtime and others, the movies from Starz -- those can survive with a subscription model,” Stern added.

Time Warner Cable expects to launch more broadband services in 2007, but Stern said it won’t be a major business until at least 2008. “You need a service provider that ensures that the product is delivered to the home,” and for a predictable monthly subscription, he said. “Until that ecosystem happens, it’s going to be a lot of PR.”

Indeed, there’s an opportunity for cable, telco and satellite video providers to co-opt broadband video content and monetize it by “leveraging the infrastructure they’ve already paid for,” said Ed Huguez, executive VP of affiliate sales and marketing at programmer Starz Entertainment.

Operators are already delivering large quantities of video-on-demand, said Jim Henderson, Comcast’s VP of digital development and supplier management, adding that the operator’s large on-demand library had served up 3 billion views through the end of 2006.

Time Warner Cable, meanwhile, has taken Web video into its network via the Quick Clips service, which provides on-demand access to content from CNN, The Weather Channel and CNBC to customers at the touch of a button.

The operator launched the service in its South Carolina division in September, and Quick Clips is now one of the top five VOD services in the market, Stern said. “That’s with just the three providers,” he added. “We fully predict that you’ll see a massive migration of Web video to the TV if done right.”

Nick Chakalos, senior director of software product-line management at Motorola’s Connected Home Solutions unit, said people don’t particularly care how they get content as long as it looks good. “Consumers don’t necessarily distinguish between Internet video and other video,” he added. “Once they see it and like it, they like it.”

To Huguez, the trouble is that it isn’t very easy today to get video on a non-TV platform. “As painful as it is to get a high-quality video download to a TV, our customers are doing it,” he added. “We’re hopeful that these new approaches make it easier,” referring specifically to the features in Microsoft’s Vista designed to enable viewing PC-based content on a TV.

Starz announced a deal with Microsoft Monday to provide its Vongo movie-rental service to Vista users.

Henderson said the hurdle from an operator’s standpoint is providing a user interface that makes it easy to share video with other devices that a subscriber has bought at retail.

“Consumers will be making their own investments, and their expectation will be that they can view video on them,” he added. “The biggest challenge is: How do you do that and make it easier to manage?”

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