INTX 2015 – Redefining the (Not) Cable Industry

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NCTA’s rebranded INTX: Internet & Television Expo (aka The Cable Show) finishes up today in Chicago. This show, like its sponsoring organization is having a bit of an identity crisis. Indeed, the name change may go beyond the show to its sponsoring organization.

Fourteen years ago, “NCTA” used to be an acronym for the “National Cable Television Association.” But on May 1, 2001 the Association changed its name to “National Cable & Telecommunications Association” in order to better reflect, “cable’s transformation from a one-way video supplier to a competitive supplier of advanced, two-way services including digital video, high-speed Internet, cable telephony and interactive TV.” To further reflect its evolutionary journey in self-identity, the NCTA’s iconic annual “The Cable Show” was rebranded as “INTX – Internet and Television Expo” to again reflect the industry’s transformation as it learns how to better focus on the digital media and entertainment economy. Now, there is some chatter that NCTA will once again change the name of the association, perhaps to NCTA: The Internet & Television Association: and just drop “cable” altogether.

What brave new world has cable entered? As FCC Chairman Tom Wheeler put it in his keynote address, “You deserve straight talk about what it means now that you are cable companies, video providers and network builders.” He then continued on to discuss his controversial stands on his “Open Internet Order” (i.e., net neutrality) and the Comcast/Time Warner acquisition he helped doom. Wheeler’s “straight talk” didn’t go over so well with the crowd. Liberty Global’s CEO Michael Fries drew robust applause in the panel following Wheeler’s keynote by saying, “I am baffled by the chairman’s remarks. There is a presumption of guilt for success I’ve never seen before.”

Comcast CEO Brian Roberts also had his moment during his otherwise business-like presentation about Comcast’s recent successes, including transitioning to a company serving more Internet than cable customers.

Roberts was showing off Comcast’s new Xfinity X1 remote control and user interface that responds to voice commands to bring up various viewing and other choices. “Show me the Comcast-Time Warner Cable merger,” Roberts commanded. In response, we see on the big screen Van Diesel sprinting from a house that violently explodes just behind him in a scene from Furious 7. “That pretty much sums it up,” Roberts dead panned.

Beyond the rebranding, politics, and merger break-ups, it was clear from the various panels that industry leadership clearly is focusing on developing and executing on a new business order defined by ever more capable and integrated technology platforms, innovations in content and how users want to interact with this content, and interesting new ways to monetize an emerging set of services.

For example, Time Warner Cable’s EVP/COO Media Services Joan Gillman, who oversees TWC’s advanced advertising, data and interactive solutions for advertisers and network partners, was pressed into duty across several panels exploring monetization strategies. She led a a discussion with MediaLink’s president/COO Wenda Harris exploring the implications to cable providers, oops, I mean Internet and Television Providers, offering OTT services and the future of television advertising in a SVOD (subscription video on demand) world. Operators need to figure out the economics of linear television versus SVOD in ways that keep subscribers engaged and satisfied.

When it comes to the future of television and digital advertising, these worlds are meshing quickly, especially for the “not cable” industry as it leverages it data advantages in the fast breaking era of programmatic advertising. In a panel led by the Cable Advertising Bureau’s Sean Cunningham, Zachary Cunningham (ESPN), Billy Farina (Cox Media), Mark Lieberman (Viamedia) and Brett Wilson (TubeMogul) shared their views on programmatic.

Essentially, the takeaway is that programmatic is about all types of inventory including premium avails, audience targeting data, efficient and automated workflows in the buy/sell process, dynamically serving relevant content, better modeling attribution, and optimizing campaigns. Panelists estimated that by 2020 somewhere between 20% and 100% of television ad trading will be on programmatic platforms. The 20% comes from Lieberman’s assumption that it’s a totally automated process from the buyer’s perspective. The 100% comes from Wilson’s belief that the whole underlying system will be automated and programmatic, though actual trading likely will continue involve human creativity and negotiation in the mix.

Ultimately, the panel concluded that programmatic is just another sales channel. And everyone loses if the industry can’t figure out how to avoid channel conflicts between programmatic and good, old-fashioned human AEs who as direct sellers who will continue to drive high value returns on commercial inventory.

Across the program, content people consistently agreed it’s all about the content. The non-cable executives consistently agreed it’s all about creating compelling user experiences and satisfaction subscribers. Those in charge of generating revenue have to balance the cost of content with the ability to monetize it. What’s the better business? Well top-line revenue and margins tell different stories. Cablevision’s James Dolan put some numbers to it, “For every $1 in profit I make from television subscriptions, I make $7 in profit from selling broadband Internet connections.”

Well, good-bye cable and hello Internet.

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