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Cable TV companies take aim at Netflix, other online video services

There’s too much at stake not to overcome the natural tension between the cable TV companies and content owners over prices and rights for delivering

By PETER WHITE

Published: 23 June, 2011

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There’s too much at stake not to overcome the natural tension between the cable TV companies and content owners over prices and rights for delivering content over the Internet to devices like tablets and smart TVs, according to participants in The Cable Show’s initial general session.

Liz Claman, Fox Business News reporter, moderated the panel of Time Warner CEO Jeff Bewkes, Time Warner Cable CEO Glenn Britt, DirecTV CEO Chase Carey, Cox CEO Pat Esser, Viacom CEO Phillip Dauman and Comcast president Neil Smit.

Claman pointed out that’s there’s more content for people to watch than ever, but much of it is not from the cablecos: it’s mainly delivered over the Net through companies like Netflix. “How did you let that happen?” Claman asked. “How are you going to get them back?” Napster used the Internet (free but pirated music) and that destroyed the music industry, she pointed out. In a different session, the financial analyst said the cablecos must me missing something in their offerings as evidenced by the meteoric rise in Netflix subscriptions.

The panelists’ responses were, in general, to smother consumers with their offerings of Internet-delivered content. Responses included: - Comcast’s Smit suggesting personalizing recommendations. - No one knows exactly where this is going, Britt said, but the cablecos have to offer what subscribers want. - We created this chaos with broadband, said Esser, and we have to give consumers choices. - Television is the foundation, according to Dauman, and cablecos need social networking.

Content providers and the distributors have grown the pie. - Apple has shown the way with a great and intuitive experience, Chase said. Content rights are our backbone, he said, and a wild west can’t be allowed. - This is not the music industry, Bewkes said, and programs like TV Everywhere are important.

The Internet is a new morning in the pay TV industry, and the operators will offer the “best stuff” on OTT. The industry needs a better user interface for on-demand, he said. Claman asked about tablets. - Smit said consumer demands have to be met everywhere and on every device. Content owners want to get paid, he said, so the operators had worked with Nielsen to get ratings for catch-up TV.

Consumers will pay for quality, Chase said. - Consumers are sending a loud, clear message, Esser added. They want VoD and catch-up TV, he said, pointing out the success of Cox’ recent catch-up TV launch. We’re doing lots of things right, he said, but have to do some things differently. - We can’t fall asleep, Britt said, and we must embrace all the screens consumers have.

Dauman said Netflix uses massive amounts of the cablecos’ broadband. It’s also developing its own content, he said, but that’s not Netflix’ fundamental business. Viacom, which owns Paramount Studios and a number of pay-TV channels like MTV, has a large library of content on Netflix as a part of its windowing strategy for maximizing revenue. It’s not easy to produce content, he said. - There are no massive changes in the content industry, he said, pointing out that the same studios existed 75 years ago. You also have to satisfy where they want to watch. Claman said Showtime recently pulled some content off of Netflix when Netflix announced it was creating some content.

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