Cable Operators Look to Slow Video Subscriber Losses
Time Warner Cable will work harder in 2011 to stem steady defections of its core pay-TV subscribers, CEO Glenn Britt said at a Deutsche Bank conference where several media executives spoke Monday. “It’s not acceptable to me to continue to slowly lose video customers every year,” he said. “That’s been going on for too long, and we're going to put some new energy both into the product space and the marketing to hopefully slow that down.” Comcast Executive Vice President Neil Smit said his company is also working to slow video subscriber losses. “I can’t give you a time frame” for stopping the losses, he said. Comcast lost fewer subscribers in Q4 than a year earlier, Smit said. “I'd like to see that number go away."
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To reduce losses, both cable operators are working to deliver simulcasts of their program lineup in Internet protocol. That way, additional Web-enabled devices can display the programming they distribute. TWC may have to move some analog channels to accomplish that, “but we have a lot of capacity and we can use it and reallocate it dynamically,” Britt said. “That allows us to serve all these devices in people’s homes."
Turning on an IP simulcast would not be a major investment for Comcast, Smit said. “We've done some work on that and we understand what it would involve,” he said. “I think IP is coming and it will speed up the pace of innovation and it will greatly reduce the capex intensity going forward.” Comcast already uses IP to distribute its VOD and national network programming around the country, but it gets re-encoded in each market for compatibility with the company’s set-top boxes, Smit said. “It’s in the process of happening right now, and a lot of the key infrastructure has been put in place across our backbone."
TWC is working to build up its VOD library and improve its user-interface to compete better with online video providers such as Netflix, Britt said. Over time, cable operators will be able to match Netflix on those fronts, he said. As Netflix moves increasingly to online distribution and away from physical DVD rentals, its cost structure will change, Britt said. “I'm not sure what’s there has a sustainable advantage over what the traditional cable and phone companies can do."
Smit and Britt promoted Wi-Fi as a big piece of their wireless strategies. “The way you use spectrum most efficiently is you dump it onto a wire as fast as you can,” Britt said. Mobility and portability are important, and consumers want them, but consumers probably won’t abandon wireline service for wireless data, he said. “We see those offerings being more bolted on to each other, Britt said. “Wireline, plus Wi-Fi, plus some access to broader wireless” service is the combination that will “lead to the best consumer experience,” he said. Smit said “Wi-Fi is there to stay,” predicting wireless and fixed broadband will coexist.