LOS ANGELES--Cable industry's top executives bemoaned the ongoing authentication issues that plague TV Everywhere apps, complained about rising programming costs, and admitted to the growing threat of over-the-top players. However, they also said that without the underlying broadband infrastructure of the cable companies, OTT players cannot succeed.
From left, A&E Networks' Nancy Dubuc, Suddenlink's Jerry Kent and Time Warner Cable's Rob Marcus debate some of the challenges facing the cable industry during The Cable Show's opening session. (Photo by Sue Marek)
"Netflix (NASDAQ: NFLX) would not exist without the cable industry," said Jerry Kent, Suddenlink Communications chairman and CEO, during the opening session of The Cable Show held here this week. "There are a lot of companies that are in existence today because we spent time building the Internet and broadband business," Kent noted.
But not everyone views the OTT players as a threat. Rob Marcus, chairman and CEO of Time Warner Cable (NYSE: TWC), said that he believes that the onslaught of OTT players just makes the high-speed broadband connections that cable MSOs can offer even more appealing. "In video there is potential for competition, but it drives us to be better than we are," he said.
A similar philosophy was echoed by John Skipper, president of ESPN and co-chairman of Disney Networks. However, Skipper called upon the cable industry to do a better job of selling its offerings to consumers. "Shame on us if we don't work to sell the value of a pay subscription and a triple-play. We are allowing them [OTT players] to set the tone of the conversation. We should be saying we have a better product."
Skipper also called for a tighter partnership between programmers and distributors, noting that initiatives like TV Everywhere are not progressing as quickly as they should and that's impacting the customer experience.
In fact, improving authentication on TV Everywhere services was a recurring complaint among the programmers on the panel. "I wish our cable partners would look at how to make the customer experience better," said Nancy Dubuc, president and CEO of A&E Networks. "That part of the partnership needs to be solidified."
Turner Broadcasting CEO John Martin even called for a "call to action" over authentication. "Authentication is a barrier to usage," Martin said. "If you poll most people in audience and ask them their user name and password, most people don't know it."
In fact, Martin even admitted that he doesn't use TV Everywhere because he doesn't know all his passwords and user names. "I have three homes with three different cable providers and I don't know any of them. I don't have TV everywhere because I can't use it."
While Time Warner Cable's Marcus agreed that TV Everywhere authentication needs to be improved, he still touted the strides his company has made with its TV Everywhere app, called Fan TV. "I agree that authentication must be easier but the early returns are good …. We had 1 million unique users access our content on ways other than a set-top box last month."
Another hot-button issue that the cable execs debated was the increasing costs of programming, which in turn is causing consumer cable rates to rise. Marcus said that Time Warner Cable charges its customers the equivalent of 20 cents per viewing hour for the content it delivers, a price that he believes is fair. "We charge customers 20 cents a viewing hour. That's well worth the price of admission," he said.
However, Suddenlink's Kent said he is fearful that the cable operators may soon price the average household out of the market. "I think we will reach a tipping point and price people out of the market," he said, adding that he's not advocating a la carte pricing but instead more affordable packages. "People should have more choice than everything in an expanded basic bundle. If we don't do that, cable operators will have to raise prices," he said.
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