WASHINGTON, D.C. – Saying cable has a central role to play in any coming economic recovery, executives here know how fortunate they are to be leading the firms they do, rather than say, an automaker.
During Wednesday’s opening general session at the 2009 NCTA Cable Show, cable CEOs sounded a note of optimism, noting how the industry has continued to post growth despite the current economic crisis.
Subscriber counts and revenue are up pretty much across the board, noted National Cable Telecommunications president and CEO Kyle McSlarrow in his opening address, prior to the first plenary session. Digital cable customers climbed 9% overall in 2008 while cable phone customers climbed by a factor of 30%. Growth continues in the first quarter of 2009, too.
And, noting that cable modems are barely a decade old, “this is still a fairly young and still developing market,” added McSlarrow. NCTA stats show Americans will save about $100 billion through 2012 by switching to cheaper cable phone services.
“How lucky we are to be in this business right now?” asked Comcast CEO Brian Roberts, who remembered his first cable job, in Flint, Mich., in 1982 where despite 24% unemployment, the company still managed to add customers. “Where else would you like to work at right now than right in this room?”
That’s all well and good, but, moderator and former FCC chairman (under president Bill Clinton) William Kennard wanted to know, what’s the next big thing? Where and how will cable lead Americans in the near and distant future, he asked, hoping for a high-tech answer. Instead he got a decidedly low-tech one.
It boils down to customer service, insisted Cox Communications president Patrick Esser. “We want to be the most trusted provider,” he said. Nevermind new products or applications, people care most about quality of service and reliability, he said. Cox has about 6 million cable subs.
Suddenlink’s (1.3 million subs) CEO Jerry Kent delivered the same message, that cable is in a very good position to deal one-on-one with customers and deliver a positive experience. His company spends 175 hours of training per year per technical service rep, for example.
“Our most valuable asset is that last mile to the home,” added Esser.
That said, the services that cable can offer, as compared to its strongest competition here, DBS, still lead growth. Roberts, for example, whose company serves over 24 million subs, noted that in March his company delivered its 11 billionth VOD stream.
But as for what’s next? That’s about bringing the video entertainment experience everywhere so that, for example, that 11 billionth stream served could be viewed on TV, or online – or on a customer’s iPhone as they travel. And MSOs down here “are looking to make that a win-win for the consumer and content companies,” said Roberts.
Cox, added Esser, is working on building the foundation for what will get its networks to that ability, including launching wireless.
Wireless pioneer Craig McCaw, who is chairing cable-backed wireless partnership Clearwire, was also on the panel, singing WiMax’s praises. Clearwire (in which Sprint is also a partner, has 100 MHz of spectrum in all major American cities). Cable down here is betting on/experimenting with wireless as a network complement.
“Wireless is a conundrum the cable industry in how we take that first step,” said Roberts, a Clearwire investor. “AT&T and Verizon are not the elephants, they are the super-elephants (in wireless) and they have all the market share… and we have a tough row to hoe… we are the wireless have-nots.”
All the while, Verizon and AT&T are making inroads in digital video with their Fios and U-Verse products, respectively.
Suddenlink’s Kent, however, openly mused on whether or not wireless will be all that important. If iPhone customers can use Skype and WiFi to make essentially free wireless calls, for example, as they can – and uptake of such an app grows, “I’m not sure I’m going to need wireless at that point,” he said.
“Half of iPhone traffic travels on WiFi” now, added McCaw, which shows that AT&T’s network (the company still has the iPhone exclusively) “can’t handle the traffic.”
Kennard also asked the tired question on whether broadband over the top players like Hulu are friends or foes of the cable industry. “I think it’s a friend because it’s powering our broadband business and for the programmers, it represents a new opportunity to try and monetize in this horrific advertising environment.”
