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| The Cable Show: Netflix No Longer the Enemy |
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The Cable Show 2012 ended this Wednesday in Boston, leaving behind several conclusions: Netflix is no longer the enemy, sports are the biggest trend and too many networks can mean trouble.
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Ted Sarandos, content director at Netflix
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New technologies and consumption habits take over the entertainment industry, making the evolution unstoppable, with new offers, devices and players constantly entering the market.
The industry is changing at a speed that's often shocking.
A year ago, Netflix was targeted by cable operators as the number one enemy. The VOD platform caused heated debates at The Cable Show 2011.
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Today, it seems as if things have changed. Netflix is no longer viewed as a threat, even being allowed to participate in a conference at The Cable Show 2012, next to top executives from Time Warner, News Corp. and Cox Communications.
Patrick Esser, president of Cox Communications, believes Netflix is currently more of a "frenemy": "In March, 40% of our customers had streamed Netflix content," he said. "That tells me that it's a very important product to my customers. And if I want to live in the world of broadband access, I need to enable this to happen."
In addition, Time Warner president Jeffrey Bewkes, stated OTT and TV Everywhere services such as Netflix have helped increase TV consumption, while also not increasing cord-cutting.
Netflix's CCO, Ted Sarandos, stated the company doesn't want to cannibalize other TV offers, yet admitted people sometimes spend time streaming Netflix content rather than doing other activities. When asked if Netflix is more Hannibal Lecter than Mother Theresa, Sarandos said it's a little bit of both.
"We're actually a little bit of both, depending on the content itself," said Sarandos. "I don't think there's a black-and-white answer of what role we play. We're additive to certain programs. Whether we are cannibalistic or not to other programs, I don't know. We have billions of hours of viewing, so we are going to take away from something."
SPORTS LEAD THE WAY
During another one of the main conferences held during the last day, sports in cable TV was the main topic, discussed by top executives from ESPN, FOX, TBS and the NBA.
The main conclusion was sports must be pay TV's great investment, since it's a product with something that makes it unique: it must be watched live.
"Sports are a main part of our culture and there's no better place to be than in that industry. It can't be topped and must be seen live, which makes it a unique type of programming," said John Skipper, president of ESPN.
In addition, David Levy from Turner Broadcasting not only agreed with Skipper, but took it one step further: "It's the only thing left that must be seen live. We know in 2026 we'll still have an audience, yet we won't know where American Idol will be ten years from now," he said.
Yet, on the down side, everyone coincided sports' TV rights will continue to get pricier.
TOO MANY NETWORKS
Last but not least, Glenn Britt, CEO at Time Warner Cable Inc., made a surprising statement, saying he believes there are currently too many networks, most of which lack a significant audience, yet make the service more expensive for the final client.
"There are a lot of general-interest networks that have lower viewership, and the industry would take cost out of the system if they shut those networks down and offered lower prices to consumers," he said.
Britt said too many companies offer their main networks with the condition the client also acquires a package of smaller channels, something that ends up increasing the service's cost.
Coleman Breland, COO at Time Warner Inc., agreed. "The elevator is full and there's no more room. This is something content providers should accept: the system is overloaded," he said.
Meanwhile, Josh Sapan, CEO at AMC Networks, expressed his disagreement. "Cable TV's growth is due to the great variety of channels. Some of the companies that started with niche products have shown their full potential over time," he said, highlighting the case of AMC, which evolved from a small channel to one of the most respected ones.
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Where Everything Grows
