Cable & Telecommunications Association for Marketing's Broadband Opportunity Conference held here last week provided the cable industry with its first major opportunity to reconvene — in person — after the Sept. 11 attacks on New York cancelled all Diversity Week activities.
Moreover, the intimate CTAM gathering, with 461 participants, presented executives with a smaller forum to trade economic notes and reconnect with industry colleagues.
"We and our customers need broadband services now more than ever," said Cox Communications Inc.'s vice president of marketing and conference co-chair Joe Rooney, reflecting on life after Sept. 11. Rooney pointed to third-quarter increases in cable-modem and digital penetration as an indication of cable's economic resiliency and appeal during tough times.
"We've got a great business opportunity for our industry," added Sean Bratches, ESPN's executive vice president of affiliate sales and marketing and event co-chair, speaking about broadband and interactive television services.
Indeed, Charles Dolan, chairman of Cablevision Systems Corp., which rolled out its iO: Interactive Optimum digital platform in late September, said the early results "are confirming everything our staff has believed on the significance of digital. It's a new ballgame."
"We never had a higher return on a direct mail piece," he said of a mailing that explained the service to subscribers.
For Dolan, Cablevision's digital platform, which includes video on demand, will be too sticky for consumers to pass up. "Once you've had VOD for awhile, you won't want to be without it," he said.
In Dolan's view, even a deteriorating economy isn't necessarily bad news for operators, as entertainment in the home only becomes more important. "I've never seen a product with the same potential as what we have on the screen now," he said.
Other conference speakers were focused on opportunities that lie just over the horizon.
Former Cox executive Maggie Bellville, who now serves as president and CEO of streaming content provider Incanta Inc., urged cable operators to look at premium services for the PC.
"You have giants in the space right now," she said, referring to Real Networks, MSN and AOL. "[But] if given the choice, [consumers] will buy from you."
Bellville cited Incanta research showing that many subscribers of high-speed data services would be willing to pay upward of $20 per month for premium content services, which could include complementary content from basic networks, music audio and video content, games and e-learning applications.
"Many say they will buy from whoever offers it first," she said. "You have a huge possibility for a payoff." Operators that have spent money on upgrades, already have relationships with consumers and they know programming, Bellville said. "You're perfectly poised to dominate this space."
Walt Disney Internet Group president Steve Wadsworth agreed, calling on the cable industry to join with content providers to co-brand by selling high-speed connectivity and new content services together, and use, perhaps, free trials and discounted offers to move modem penetration higher.
AOL Time Warner's senior vice president of broadband Lou Borrelli Jr. said his company's broadband subscribers spend more than two hours online daily, twice the time of narrowband users. AOL's latest version 7.0 has integrated high-speed content including streaming sports and news highlights, movie previews and AOL radio. "It's a wonderful complement to the core video business," Borrelli said.
Gaming was also on Microsoft Corp.'s mind, as it announced a Microsoft TV deal with Charter Communications Inc. and discussed the relationship between its new Xbox gaming console and cable. John DeVaan, senior vice president of the Microsoft's TV division, said the Xbox could help operators sell cable modems.
"It can't do narrowband," he said of Xbox connectivity. "It can only do broadband." Microsoft believes Internet gaming will be a big business and cable operators stand to benefit as Xbox users seek out broadband connections for online gaming.