Cable CEOs Expect Customer Growth Even as Online Content Grows

Roberts took a pot shot at the Bells, saying their growth is flat when wireless is excluded. NCTA Pres. Kyle McSlarrow used most of his opening remarks to attack telcos and tout the group’s ad campaign challenging their claims. “Others want what we already have, without the hard work,” he said, adding that “cable must contend with pretenders.” Addressing Hill telecom reform, he said NCTA backs “narrowly targeted social obligations” applied “equally” to all firms. Asked in a press briefing if he supports net neutrality provisions, he said: “The answer is no… Our view is that it is dangerous to interfere with the marketplace.”

Bells are missing a chance to snare video customers since they aren’t yet offering widespread service, Parsons told the panel: “The telcos are way off the pace… There’s an awful lot of money to be spent [by consumers]. They're not there today.” Cable operators are adding basic customers, after years of losses, said Parsons. That datum and others should quash fears that program distribution is growing commoditized, he said.

Parsons hopes there’s a 5th commissioner on board at the FCC before a vote on Time Warner and Comcast’s proposed $17.6 billion purchase of Adelphia systems, he said. Critics have said the firms are trying to stall the FCC process to account for delays from Robert McDowell’s nomination being on hold. “We felt that it would be wise and probably in the best interest of us to have a full FCC panel,” said Parsons at the briefing. “We've used all efforts to give the information to the FCC” that’s been requested of the firms, said Roberts. “I don’t think [timing] is really up to us.”

Expanding bundles of products and content portability are the key to happy customers and investors, executives told the conference. “It’s the follow-me TV concept,” Motorola Chmn. Ed Zander said. Cisco CEO John Chambers and other execs urged a longer view. “It’s going to be about a connected lifestyle,” he said, where in 3-5 years: “you'll be able to access data anytime, anywhere: Data, voice, video.”

Firms with prominent brands stand to prosper as consumers shift content use to mobile devices and PCs, Anne Sweeney, pres. Disney-ABC TV Group, said: “Strong brands can be used to help…consumers navigate online. All these new technologies are proving to be additive.”

Gearmakers are poised to benefit from cable spending on newer products such as PVRs, they said. “There [have] never been more products to sell,” said Roberts. Motorola will keep its set top box business, said Zander, answering a question from moderator Maria Bartiromo on speculation it might be sold. “We're booming in that space,” he said. Sprint Nextel CEO Gary Forsee said use of wireless devices to access TV shows and other content will drive demand for his firm’s products. The firm will spend about $7 billion this year “to create and improve… mobility experience,” he said.

Hurdles remain. Google is disrupting traditional sectors like advertising, said panelists. “It’s going to keep us on our toes,” said Zander. “We have to learn from that, and in some cases embrace it.” If there is a silver lining to Google’s explosive growth, it’s encouraging more use of cable broadband, Roberts said: “They're also groundbreakers in showing where advertising wants to go… Cable operators have the ability to deliver one-to-one TV advertising more than any other platform.”

Cable customers must wait for some new services. A joint venture between Sprint Nextel and Comcast, Time Warner and peers, announced with much fanfare (CD Nov 2 p7), won’t go nationwide until 2007, Forsee told us at a press briefing. “We'll go into 2007 ready to launch all the markets in the country,” he said. Until then, service will be introduced in markets such as Austin, he said. Comcast isn’t fazed, Roberts told us: “We don’t feel an immediate need to have a cellphone 4-product bundle.”