September 29th Addendum to the Viodi View

Digital Cable and Satellite Television Strategies:

The moderator for this session was Alex Ben Brock, Editor of Television Week. The panelists for this session were:

Michael Thorton, SVP, Programming Acquisition DIRECTV
Patrick Vien, President, Network Enterprises & Universal Studios Networks, Universal Television Group
Steve Heeb, Vice President, Product & Business Development, Comcast
Roger Keating, President, Time Warner Cable, Los Angeles
Greg DePrez, Vice President Subscription VOD, Starz Encore Group, LLC

These panelists provided a good mix of viewpoints. Some interesting tidbits that were mentioned in this panel include:

Comcast is planning on going all-digital - this is a strategic move for them. They want to open up bandwidth to give them more flexibility moving forward.
Keating of Time Warner suggested that 90% of their new customers are subscribing their digital tier - this is exceptional, as compared to industry averages.
In response to the query about cable television's high churn rates, Heeb from Comcast suggested the way the way they are battling churn is by offering a suite of features, including music channels, interactive program guide, Free VOD, SVOD and VOD. Keating added to this that an easy-to-use menu system and compelling barker channel are also important tools to increase customer satisfaction and reduce churn.
Regarding the question of whether there are "too many channels", Patrick Vien of Universal, said that, "too many channels are asleep." He expressed the need for channels to be creative both in terms of the content and the programming they create, but also in terms of marketing.
DirectTV, represented by Thorton, said that they are very selective about the sort of content in which they try to acquire exclusive rights. The NFL is one such content source. Heeb from Comcast indicated that they strongly believe in investing in programming. They see it as a, "trading chip for the future."
Starz has completed their suite of linear channels. They have focused on creating well-branded, thematic channels. Going forward, they are going to add value to these through continued on-demand enhancements and introduction of high definition versions of the programming [note: Tom Gove from Starz will be discussing their strategy at the Independent Telco Video Content Conference].
They seemed to agree that advertising in the on-demand world offers great promise, but it will probably take a decade to reach its potential. In the meantime, there are some examples of on-demand advertising that works. Starz told of how Cox added a menu item on their set-top user interface that allows a customer to pull up trailers and then order Starz On Demand with their remote control.
Regarding new technology, particularly on-demand, Keating of Time Warner said that Time-Warner's DVRs [Digital Video Recorders] are, "flying out the door." He commented that VOD has moved from a nascent technology to a real moneymaker in the past year. In fact, another panelist in another session suggested that Time-Warner is earning $3 to $4 million per month in free cash flow from their on-demand efforts.
Lastly, Comcast sees that they need to provide compelling content, where subscribers want it (e.g. television, PCs, mobile devices) and on the customers schedule. This means Comcast has to deal with digital rights issues like never before and they need to change business deals such that they can package content in ways that benefit their customers.

Click here to learn about the session, Beyond Movies: Television On Demand....

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