Boston-AT & T Broadband CEO Daniel Somers downplayed calls from 27 religious and socially concerned institutional investors for the MSO to reconsider its decision to carry explicit adult pay-per-view network The Hot Network.
In a letter sent last week to AT & T Broadband from investors representing 2.8 million shares of AT & T Corp. stock, the group stated that it was "disturbed" by the MSO's statements that carrying Hot is a "strategic" business decision designed to beef up its flagging cable business and to remain competitive with direct-broadcast satellite.
"What management missteps are behind a situation where AT & T must turn to strategies appealing to the basest elements of our culture-violating a corporate tradition of positive social behavior?" the group's letter asked.
Somers said the MSO was standing behind its decision to carry the service, which provides a less-edited version of the kind of programming seen on Playboy TV or Spice, but fare that is less explicit than triple-X videos.
"There are many of our investors that have not said a peep about [Hot]," he added. "We're not the only ones that carry adult product."
Indeed, seven of the top 10 MSOs carry Hot, according to the network.
With the proliferation of more secure digital platforms, explicit services such as Hot and The Erotic Network are generating interest among operators, mainly because they generate 50 percent to 100 percent higher buy-rates than the milder adult fare.
Operators also charge higher retail prices for Hot while retaining as much as 80 percent of those sales, compared with 60 percent and 70 percent for Playboy and Spice, respectively.
This hasn't shielded AT & T Broadband from outside criticism from conservative groups. Last month, the American Family Association also criticized the MSO for its carriage of Hot and asked Attorney General Janet Reno to investigate AT & T Broadband for possible federal pornography-law violations.