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Cutting the Cord dominates Communacopia conference

If ESPN and Nielsen are right with their numbers, and there’s no reason to doubt them, cord cutting is only being done by about one-tenth of one perce

By PETER WHITE

Published: 16 December, 2010

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If ESPN and Nielsen are right with their numbers, and there’s no reason to doubt them, cord cutting is only being done by about one-tenth of one percent of US consumers. But the topic seemed to take up about 90% of the discussion at Goldman Sachs Communacopia conference. Perhaps it’s the fear of what Napster and other online music services did to the labels’ revenue, profits and headcount.

Comcast considers OTT services like Netflix and iTunes as competitors to their VoD services rather than their main pay-TV subscription service, according to Comcast CFO Michael Angelakis, speaking at the event. He said the company is re-launching its TV Everywhere online video service called Xfinity Online to compete with other online services.

“TV Everywhere, which we are calling Xfinity online TV, will be re-launched next month,” he said. “Our goal is to provide our customers with the content that they want anytime, anywhere. And that includes as we launch different services with Xfinity and what we call Project Cavalry All-Digital — that’s all somewhat connected.” Xfinity was first launched in December 2009 but its limited content did not attract many consumers.

Angelakis said Comcast’s goal is to provide its subscribers with content that they want and where they want it. It intends to provide them as much as they want “so they don’t feel they need an alternative.” He said Xfinity will evolve “in terms of how we innovate that product, whether it’s online, whether it’s on linear or whether it’s VOD or ultimately possibly wireless.” Angelakis said Comcast is not seeing cord cutting by its subscribers. He said Comcast sees other online video services “as primarily competition to our VOD business, not to our core business.”

Verizon CEO Ivan Seidenberg, perhaps having seen consumers’ transition from landline to mobile, took the opposing view. He said, “Young people are not going to pay for something they don’t need to. Over the top is going to be a pretty big issue for cable.”

“We take the over the top issue with video very seriously,” Seidenberg said. “I think cable has some life left in its model but that it is going to get disintermediated over the next several years.” Verizon has said it will make its FiOS pay-TV service available on tablets like the iPad but first has to make deals with broadcasters.

Dallas Mavericks owner and HDNet founder and CEO Mark Cuban predicted cord cutting and Netflix will disappear because pay-TV companies will lock up all content rights and expand their Web offerings. Cuban said Netflix had done a “phenomenal job” helping content companies monetize library videos but predicted its demise.

Slingbox founder Blake Krikorian said he expects pay-TV companies to take over online video and put everything behind an authentication wall that would guarantee that only their subscribers had access. Netflix succeeded only because content distributors didn’t meet consumers’ needs, he said.

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