Uniting in the fight against over-the-top services

Uniting in the fight against over-the-top services Dominic Smith looks back at The Cable Show 2011, North America’s largest event dedicated to the Cable communications industry.

Staged in the impressive McCormick Place convention centre in Chicago, The Cable Show brings together the who’s who of the Cable industry, with a comprehensive conference programme and more than 300 exhibitors spanning the complete Cable ecosystem. It was my first time at a Cable industry event and there were some obvious differences compared with the large Telco-focused events, but also a great deal of similarity when it comes to the challenges that the Cable companies are facing.
Unlike the GSMA Mobile World Congress or ITU World Telecom which are dominated by the large infrastructure providers and device manufacturers, the big wheels in the Cable industry are the content providers such as Discovery, Disney & ESPN, Fox, NBCUniversal and Time Warner. And these media and entertainment companies really know how to draw a crowd by bringing in headline names from their own shows to do appearances and sign autographs on their stands. The biggest crowd-pleaser seemed to be Paris Hilton, but the likes of Kelsey Grammer, Nick Faldo and various other baseball / basketball / football / ice hockey stars all had long lines of people queuing for a photo with their heroes.
The keynote sessions brought together a mix of both the content companies, and the Cable networks to debate the key challenges faced by the Cable industry. Top of the agenda was the threat from over-the-top (OTT) content services, with Michael Powell, President and CEO of the National Cable & Telecommunications Association (NCTA) calling for Cable networks to become “powerful, personal and portable” in order to deliver on that all important customer experience. He also rallied the troops with an old army saying that you should either “lead, follow, or get out of the way”, and that Cable companies really can lead the way in the next generation of communications services.
Though OTT services such as Netflix are feared by many in the industry, the content companies see a much more positive outlook. Philippe Dauman, President & CEO of Viacom, commented that there’s “never been a better time for the content guys” observing that the challenge now is to provide all their great content to the consumer in multiple different ways and using different delivery channels. This view was shared by Jeffrey Bewkes, Chairman and CEO of Time Warner, who pointed out that “the stuff that people want to watch on YouTube, comes from Cable” but what the Cable industry needs to provide is a great user interface.
TV on the internet, internet on the TV
The whole TV anywhere / everywhere concept was a recurring theme throughout the show with several keynote speakers talking about the need to embrace all of the consumer screens, whether that’s TV, PC or mobile, and make it easy for customers to access their own home programming wherever they are. This TV on the internet idea is not exactly new, but the rapid rise of the iPad and other tablets is changing consumer behaviour and driving the need to make programming accessible in a more user friendly way, native to the device on which it is being consumed.
But whilst TV programming is moving to the internet, the internet is also moving the other way to the TV, with internet applications such as Skype and YouTube already being embedded in to TV sets and Cable providers offering internet access directly on their customers’ TV screens. But it’s not quite as simple as just putting internet on the TV, the user interface needs to be adapted to the different media, whilst still retaining the things such as search, recommendations, related content and so on, that make the internet what it is today.
Putting the TV content aside for a moment, if I closed my eyes and ignored the surroundings I could just as easily have been at a mainstream Telco show. The main messages coming out of the presentations seemed to be very similar:

• How to compete with the OTT providers
• The need to delight customers with a great customer experience
• The need to create a more intuitive user interface (unsurprisingly, Apple was repeatedly used as the example for innovation and to illustrate what makes a good user interface)
• The need to deliver a personalised service
• Anytime, anyplace, anywhere services

However, notable by its absence (at least in the sessions I attended) was the lack of reference to competition from the Telcos. But then come to think of it, at the Telco events I’ve attended I don’t recall hearing them talk about the threat from Cable companies either. So this got me thinking if the challenges are the same and they don’t really consider themselves to be competitors, then why aren’t more Cable companies and Telcos working together to take on the OTT providers?
A marriage made in heaven?
In many ways the Cable companies have an advantage as they have well established partnerships for the high value video content and have a revenue model built around subscriptions and advertising. However the Telcos are experts at the crucial mobility piece and are so much better at understanding the individual customer and providing charging flexibility.
Some Cable companies are now providing a mobile offering as MVNOs, but why is there not more widespread co-operation? Maybe it’s just the elephant in the room that nobody likes to talk about, but surely there is an opportunity here? Let us know your thoughts on this by posting your comments below.