LOS ANGELES -Senior cable-industry executives are wrestling with how and when video streaming will become a legitimate part of their business, as evidenced the Cable & Telecommunications Association for Marketing's pre-Western Show panel on the topic.
"The question is, what are the economics?" asked Time Warner Cable president Glenn Britt. Internet-protocol [IP] streaming to the set-top is years away, he suggested.
"It has to be scalable," said Britt. "It will work someday, but it's not going to happen six months from now."
The legal issues are enormous, said Courtroom Television Network chairman and CEO Henry Schleiff. "There are extra-credit issues like residuals," he said, adding that "there is no great consumer demand for streaming right now."
Still, Britt said interest in video streaming will help Time Warner Cable to sell cable modems, and Schleiff believes programmers can use streaming as a marketing tool.
"There is a way for this to be a win-win situation," said Schleiff.
Video streaming could also be used to drive customer retention, program promotion and acquisition, suggested Home Box Office U.S. Network Group president John Billock. "Streaming has some creative marketing applications," he said.
Britt said he doesn't fear content providers will use the Internet to end-run cable operators. To begin with, most Time Warner Cable program contracts limit the amount of content cable networks can stream over the Internet.
And if a network distributed their full signal across the Internet, Britt said, his MSO would stop paying for the service.
But other panelists believe money can be made through video streaming.
"The first place to focus is the workplace," said Akamai Technologies Inc. president Paul Sagan.
Americans are using their high-speed connections at work to access video-streamed content from the Internet, he said. "CNN [Cable News Network] is capturing a new profitable audience online today with its broadband content," Sagan said.
Both Sagan and Billock suggested that competition and consumer trends could force cable operators to deal with video streaming sooner than they might think. Several major Hollywood studios, Sagan said, are looking to distribute full-length movies over the Internet in 2001 for a $4 fee, paid by credit card. The idea would be for consumers to use their high-speed work connections, download a movie in 15 minutes and play it at home on their laptops.
From Britt's perspective, that looked like a lot of work just to watch a movie. But Billock said such competition could force cable operators to react more quickly.
If DSL [digital subscriber line] proliferates and promotes Internet streaming, Billock said, cable would have to respond.
"Look at the teens and the college students," Billock said. "The PC is an entertainment platform if you're a 15-year-old. We're all going to be surprised" at the use of video streaming going forward, he said.