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May 3, 2004 Volume 15 Issue 84 Use the table of contents below to jump to the stories that interest you, or use the scroll bar to browse through the entire issue. Table of Contents
It's Showtime: Moves, Basics and Buzz in Crescent City  
National preliminaries began in a cloudy, damp New Orleans as CTAM's Char Beales stepped on the porch of cable's Broadband Home and asked her opening panel what their favorite items inside were: Cox's Pat Esser liked the Jacuzzi with the built-in HD set (and a remote that doesn't short); Charter's Maggie Bellville adored the TV monitor that became a Chagall; Samsung's Frank Romeo enjoyed the mirror that also displayed news, weather and sports. But the wide-ranging discussion returned often to basics, with Esser and Bellville stressing simplicity and ease of use and reliable service above all. The concluding question illustrated the importance of the present, as panelists named cable's top priorities. For ESPN's Sean Bratches it's HSD; Esser and Romeo named video, Bellville said voice, while Ucentric's Michael Collette went more forward, saying it's the home-based broadband platform and the multi-room app. -- Sen Ted Stevens (R-AK), under the watchful eye of Robert Sachs, was testing out the treadmill in the Broadband Home Sun afternoon using a tele- aerobics instructor based in Utah (no, he wasn't breaking a sweat). -- Considering the booming growth in the country's Hispanic population, cable could be doing a better job attracting Hispanics consumers, Market Segment Group CEO Gary Berman said at Multi's 'State of Hispanic TV' lunch yesterday. Cox svp Joe Rooney admitted Cox's digital churn among Hispanics is probably higher than the company's overall avg "because we didn't do it right the first time." Cox is totally revamping its Spanish-language digital tier, he says. It's important to remember there's diversity within the Hispanic demo. -- Last-Minute Blurbs: Several nets greeted reporters with announcements Sun, including Discovery Nets US naming Turner's Jen Reichenbach vp, new media distribution, aff sales & marketing. Anime said Insight agreed to launch it next month as a 24/7 net on the MSO's digital tier. It's the 1st 24/7 pact with a major MSO. -- The early leaders in pre-convention buzz were CSTV and Trio. As early as Sat morning, Canal St merchants' windows' were displaying 'CSTV ASAP' posters and Trio was benefiting from a local Cox ad campaign, in addition to Trio's own shuttle bus ads. (Shame Trio chief Lauren Zalaznick isn't in New Orleans; she remained in NY, presumably to deal with NBC.) Done Deal
The ink's still wet, but Turner and EchoStar [DISH] signed off Fri on an affiliation agreement for continued distribution of CNN, Cartoon and several other nets. Terms weren't disclosed. Digeo Not Boxed In
"PowerKEY," the S-A [SFA] version of Digeo's "Moxi" powered Broadband Media Center will be available this fall, making the BMC available across both S-A and Motorola [MOT] platforms (Cfax, 4/26). Charter [CHTR] has ordered 70K of the boxes to go along with the Motorola Broadband Media Centers it began deploying last month in Rochester, MN. -- As the price of chipsets goes, so goes the price of the DVR. Digeo cut the cost of its "Media Center" by 40%, making the new "Moxi Mate" the industry's 1st advanced sub-$100 box. The $79 box also allows users to share digital content among as many as 4 TVs. The vendor also increased hard drive storage for bandwidth gobbling apps like HDTV by adding an additional plug-and-play unit that acts as a sidecar. Preaching Parity
CAB's road show for ad buyers now has some new research backing up the appeal for cable to receive more ad dollars, including stats that show 50% of all viewers turn on their TV with no particular destination in mind. Viewers are equally likely to go first to a cable net as to a broadcast net and are equally likely to watch either for 30 mins, says research from SRI Knowledge Networks' "How People Use TV." Cable outranked broadcast in several categories. 57% of respondents said cable consistently shows the best programs, while only 19% said the same about broadcast. 68% said cable had programs they couldn't find anywhere else, while 10% said the same about broadcast. 44% said the tend to pay more attention to ads on cable, 31% said the same of broadcast and 23% said they pay equal attention to both. "We've underwritten the latest chapter of what's been a standard study for agency research," says CAB chief Sean Cunningham, adding that the study has never before broached agency execs' "wish list" of cable/broadcast questions. CAB went with the firm after meeting with a half-dozen major agency directors who unanimously dubbed Knowledge the best provider for sophisticated qualitative TV research, CAB says. The group expects the data to make up 50-60% of their presentations to buyers going forward (the report will be mailed to agencies CAB's already met with), Cunningham says. At the Portals
The Corduroy Crew is calling on the FCC to put off any mergers by cable's 2 largest MSOs--Comcast [CMCSA] and Time Warner [TWX]--until it settles on new cable horizontal ownership rules. The rules, struck down by a federal court 3 years ago, limited a cable company to 30% of all pay TV subs (Comcast was at 28.9% last month, according to a recent FCC filing). Much to the Crew's dismay, the FCC has not adopted new rules. The consumer groups' letter to the FCC Fri was spurred by Adelphia's announcement that it would contemplate a sale. At Last
Motorola [MOT] will announce at National that its highly anticipated dual turner DVR box will be ready for deployment this summer. The OCAP-capable DCT6412, being demo'd in Moto's booth, is capable of recording HD and SD programming and has 120 GB hard drive, a DOCSIS-compatible cable modem, smart card reader and Ethernet and USB ports. Motorola also is preparing to roll out its home media, multi DVR architecture. It's basic solution--which can move DVR content to TVs throughout the home--will be ready for rollout in 4Q. The advanced solution, expected to be ready early next year, uses Ucentric middleware to connect multiple devices (digital cameras, lap tops) on the network. Tier Buy-Through
NCTA is supporting Cox [COX] in its stance that requiring customers to pay a "digital gateway" fee is not a tier buy-through violation. A few weeks ago, the FCC sought comment on a complaint Enfield, CT, filed against Cox (Cfax, 4/1). The city claimed that Cox was violating the rules by requiring subs who want premium services and only the basic tier to pay a $3.95 "digital gateway" fee for the IPG, Music Choice and other set-top services. NCTA and Cox argue that FCC precedent is clear that non-video services do not constitute a "tier." In a filing, Cox argued that "stretching the buy-through rule to restrict [the digital gateway] would be a step backward in the digital transition and consumer welfare." An Unfunny Thing Happened on the Way to New Orleans
Not even a month after announcing its planned Jan '05 launch (Cfax, 3/25), the Chicago-based Stand-Up Comedy Television (SCTV) (booth #1031) has run into a legal hiccup. Andrew Alexander, CEO of Chicago's famed Second City comedy empire, last month took action against the network's cofounders, brothers Joseph and Avi Fox, asking that they stop using the SCTV name. "They have been ordered to Cease and Desist in using the name and have yet to relinquish their position--it looks like we will be heading to court," Alexander said Fri. A spokesman for the fledgling net said a comment would be forthcoming, but did not reply by press-time. SCTV is a legally-registered trademark owned by Second City Ent, which co- produced the "SCTV" comedy series that launched the careers of Martin Short, Eugene Levy, and John Candy among other comedy legends. -- In other startup news, horror net Scream Channel (Cfax, 4/14) will not be bringing cofounder Joel Silver from Hollywood to N'Awlins. But exec suite #11 will feature Kim Bangash (late of the still-looming Horror Channel) and Steve Richards of Warner Bros talking up the net's ghoulish programming and marketing plans for its Jan launch. And be sure to swing by booth #3623 to find out about The Outdoor Channel 2, TOC's standalone high-def spin-off launching next year. It's also nice to see MBC Networks' Samara Cummins and her colleagues reserve a last-minute booth (#4337) on the floor. Check out Mon's CableWorld for other new programmers schmoozing the show. - Shirley Brady New Net Watch
Game-focused Edge TV breaks into the Big Easy today with a National Show suite, $10mln in funding and some notable players bent on a digital launch in 1Q. The channel will produce shows dedicated to card/casino/board games, fantasy sports and crosswords, including live tournament coverage from across the US, says co-founder/pres Keith Richman. Creative Artists Agency, until now rarely involved in a major degree with new cable start-ups, will assist Edge in lining up production talent, content acquisitions and new business directions. Richman and co-founders Reagan Silber and Charles Katz nabbed former ABC Family distribution chief John Burns III as vice chmn--charged with program development--and HotHouse Media as cable affiliate dealmaker. -- Simon Applebaum Salary Toss
Cablevision's [CVC] Chuck Dolan and Jim Dolan saw their base salaries last year remain at $1.6mln for the 3rd straight year, but they did earn bonuses-- something they haven't received since at least Jan '01. Chuck and Jim Dolan notched bonuses of $4.8mln and $2.8mln, respectively, in '03, according to an SEC filing. "These bonuses reflected the company's performance in exceeding virtually all of its plans, goals and objectives for the year and the leadership roles [they] played in the company's achievements throughout the year," the filing said. Insight Numbers
Insight [ICCI] posted solid 1Q numbers, slightly ahead of most analysts' projections. The 4,300 basic sub adds were especially good news for the MSO, which was hit hard by DBS local launches last year. Several analysts had expected basic sub losses (i.e., UBS' Aryeh Bourkoff expected a 1K sub loss). Revenue was up 11% year-over-year to $238mln, while EBTIDA climbed 12% to $100.6mln. HSD adds totaled 28K, while digital adds totaled close to 16K. Insight posted a $6.8mln loss vs a profit of $5.6mln a year ago. Carriage
Oxygen snagged full distribution on Comcast [CMCSA] in Chicago (800K subs). -- Tennis Channel launches today on Cox [COX] in Fredricksburg and Fairfax County, VA, and on Time Warner Cable in Berlin, NH. Adelphia launched the net over the weekend in South Dade, FL, and in San Juan, Puerto Rico. The net's recently scored launches in Denver (Qwest) and L.A. (Adelphia). -- Good Life will be rolled out on all Bresnan Communications' Rocky Mountain systems over the next 12 mos. It will become a part of Bresnan's core digital basic tier in the Rocky Mountain region, adding an additional 100K subs. -- Cable ONE added FamilyNet to its digital "Faith & Families" package. Comcast [CMCSA] added the net to its digital classic lineup in Richmond, VA, on Fri. VOD
ABC Cable will test enhancements to its Disney Channel On Demand service in the coming months that include using the service to premiere upcoming original series prior to their launches. It also wants to test set-top interactive games for the service, with commercial deployment of a "Kim Possible" game targeted for as early at this fall. -- TVN is launching free, on demand net MUSIC Unlimited this summer. It's teaming with The Sound Track Channel for the initial offering, which will consist of up to 100 music videos, concerts and specials. The channel will cross promote VOD movie offerings by offering up VOD music videos from the flicks. -- Movies via VOD have eclipsed PPV movie orders for the 1st time, says research from In Demand. Dec marked the 1st month where VOD movie orders outnumbered PPV. Other tidbits: movies with 30-day windows have averaged almost double the buy rates of titles with longer release dates, with avg monthly VOD buy rates up 71% vs '02. At year-end, cable had more than 10mln VOD users in 17 of the top 25 markets. -- Cox [COX] launched VOD in New Orleans and Omaha using Concurrent's [CCUR] "MediaHawk." (For more on Cox N'awlins doings, check out this week's CableWORLD). -- The iconoclasts at Fuse are taking a very traditional route, opting to launch Fuse On Demand (and, gosh, doing so at National, how conventional!). The selection of 75 full-length music videos, concert footage and artist interviews will be refreshed weekly. Programming
Comedy Central's '90s interview series "Inside The Comedy Mind" will make a return, showing up on Stand Up Comedy Television through a syndie deal with Television Syndication Co. Host Alan King interviewed folks like Hope, Burns, Berle, Jerry Lewis and Mel Brooks. Stand Up Comedy Television debuts in Jan. -- The History Channel will launch The History Channel En Espanol in 2Q, presenting Spanish-language programming focused on world and Latin American history, a highlight will be the series "Roots of America." Don't Miss
The opening general session (9am, Hall A) features Carl Vogel, convention chair, and Robert Sachs telling us the state of the industry; a panel follows with, so far, Stuart Varney grilling Brian Roberts and Dick Parsons. --Eat lunch with a vendor you pick up on the show floor; be different, pay! -- At the invitation-only public policy lunch today are AK Republican Sen Ted Stevens and WI's Republican Rep James Sensenbrenner. -- I'm going to nap in the afternoon; the night is too much down yonder. -- For example, the Chairman's Reception conflicts with a Scripps Nets dinner (featuring Emeril!), the WICT reception honoring Nani Shin-Wannemacher with the Bernice Coe Award, the start of Broadbus and GSN parties and more. -- Speaking of the Chairman's Reception, it's a great warm-up to our early evening soiree for the Faxies ... the invitation-only (stop me if you need one) party at the cool Harper Mansion in the Garden District where we give out (with rapidity) cable's most prestigious and coveted awards! Tomorrow's Breakfast: invitation only, is with Sec of Ed Dr Rod Paige (bless you, Cable in the Classroom). - PSM Telephony
PointOne is using National as a launching pad for its VoIP services for residential and small businesses. "StarPoint IP" service has been in trials since Oct and is now available to cable ops nationwide. -- Cox will dial up its 13th "Digital Telephone" market June 1, in Northern VA. -- ICTV and TV-telephony integrator Integra5 will develop TV- based telephony and unified messaging, a few new wrinkles on the triple-play bundle. 5 Q's with Tennis Channel pres Dave Meister
Congrats on Tennis reaching its 1-yr anniv (May 15). Any advice for the newbies at National? Be patient, be patient, and be patient. And plan accordingly. We're connected and experienced cable people; we knew 1 year after launch we weren't going to be king of the world. Launching a cable network as an independent is exciting, but it's not for the faint of heart. Your programming's been impressive, as have your Beta results. Carriage always is the sticking point. Has it met expectations? Let's you and I agree to change the way this industry looks at success (laughter). We get fixated on how many people can watch and are watching, instead of just the quality of the programming. I know it's an uphill struggle but I think you and I can do it together (more laughter). Seriously, we're pleased to have been launched by 22 different distributors in 75.2% of the country. In actual launches, we'll have been launched in a bit more than 30% of US cable systems as of May 15. These are great numbers. What about being on sports tiers? Something that's new takes longer to reach maturity and grow. So, penetration in those instances is not as great. We think it's unrealistic that these tiers will endure, just because the evidence isn't there that they're working. Historically tiers haven't done that well when the cable industry's tried them. Tennis Channel's role in the new U.S. Open Series wasn't clear at the announcement late last month. Can you clarify? We don't believe there's been a tectonic shift. We've done the bulk of the telecasting of these tournaments last year and we will do the bulk of the telecasting this year. We expect to do more hours of those tournaments in the series than all the other networks combined. 28 of 32 matches in a typical tournament occur during the week, that's what we will telecast. The USTA has set things up to try to get ESPN's exposure for these tournaments' finals. And that's great. There will be more awareness of who wins, so that will benefit tennis, tennis fans and the Tennis Channel. Who's playing in your 'dream' tennis match? Assuming I can't play with a trio of Bo Derek, Salma Hayek and Brigette Bardot--all in our prime, of course--I'd like to see legends like Jack Kramer and Pancho Gonzales using the training and tools of today's stars. Broadband
nCUBE and Digeo integrated the former's "nABLE" back office mgmt software and VOD server with Digeo's "Moxi" software platform for deployment on Motorola's "BMC 9000" series of media centers. Adelphia will trial the hybrid in LA this summer. -- Pace and Gemstar-TV Guide have integrated the latter's IPG into Pace's "DC755HD" HD set-top. CableFAX Week in Review
Industry Perspective
Bringing Broadband HomeBy Robert Sachs, Pres/CEO, NCTAWith universal deployment of broadband service in the U.S. being a Presidential priority, it's only appropriate that cable's broadband services will be front and center at this week's National Show. Broadband will be such an integral part of the show that attendees of the general sessions will be literally seated in the back yard of the Broadband Home. (More on that later.) No industry in America has done more than cable to bring new broadband services to consumers in cities, towns and rural communities nationwide. But still, broadband is not ubiquitous. We applaud President Bush, FCC Chairman Powell and congressional leaders who have called for policies to further encourage broadband investment. To cable companies, "broadband" means much more than high-speed Internet access. Broadband also means the ability to deliver hundreds of cable channels and crystal clear high- definition TV. It allows customers to customize television viewing through interactive services like Video-On-Demand and Digital Video Recorders. And it supports Voice Over IP services which will provide the significant cost savings and true local phone competition. How important is broadband to the cable industry? Just consider the statistics. Cable now has 22 million digital cable, 16 million high-speed Internet and 2.5 million telephone customers. And we're seeing growth in new services such as HDTV and VoIP. Broadband services, both the services that are delivered today and those that are the promise of tomorrow, will be on display throughout the exhibit floor at The 2004 National Show. Two exhibits that will anchor the show floor - NCTA's Broadband Home and CableLabs' CableNETr - will encompass virtually all of cable's advanced services. In fact, the Broadband Home has been so thoroughly integrated into the show floor that its back porch will also serve as the main stage for several of our General Sessions. In reflecting on the cable's growth during the last year, consider the growth in deployment of HDTV. Today, 84 million homes are passed by a cable system that offers high- definition programming, growth of 65 percent since we gathered last year in Chicago. The number of cable networks providing high-definition programming has doubled with 16 networks offering a selection of movies, sports and general interest offerings. Cable's investments don't stop with new technology and better programming. Cable companies have also invested in tools and training to provide better customer service and help consumers understand how these many new broadband services can simplify their lives. All of cable's investments make this industry a significant contributor to the economy, one that makes a positive impact in thousands of communities nationwide. Direct and indirect employment attributable to the cable industry topped one million people at the end of 2002, and our industry is creating new jobs every day. As cable brings broadband home to consumers across the United States, we should be proud about our accomplishments and excited about our broadband future. MaxFAX
Data Killed the Video Star?[With apologies to The Buggles and Robert Pitman, one-time program director.] Here we are way down yonder in New Orleans all set to eat too much rich (but truly delicious) food and dis the humidity. On the show floor, in the hallways, in the sessions and in hotel room meetings, I'll bet around 85% of the discussions will be about VoIP, cable modems, portal enhancements (which, I suppose, matter; just don't forget what Excite! did to ), VOD, SVOD, HDTV and precious little about the true basic, underlying raison d'etre that provides the base subscription revenue. Please allow me to be VERY clear, I am not for a moment suggesting that all that talk is a waste of time ... on the contrary, it is essential for cable's future growth. Besides, some of that talk will likely soon migrate in an "agile" manner to the subscriber's remote control. What I mean to bring back to the forefront of your brains is: content counts! But cable, for a variety of historical, financial and regulatory reasons, doesn't do the best job it could in packaging and marketing what we've got! It is time, perhaps via a major CTAM study project, to optimize program packaging. One thing is certain: cable cannot allow the decisions to be made by some Congressional committee or some contingent of the Corduroy Crew. It is time to redefine what and how cable packages programming. No more whining about how direct-to-home satellite purveyors have the luxury of a national footprint and, at least back in '93, the luxury of a clean slate. Time to re-emphasize local (or DMA at least) and re-jigger the programming mix to make a better customer proposition ... No, I am not suggesting a la carte. And, no, I am not suggesting the exercise should be done in a vacuum. Instead, I am suggesting that, with programmers having seats at the table (a must, just think of all those carriage contracts that exacerbate the problem or prevent alternative solutions from having that exist today), some real industry-wide market research focused on making cable better for cable and its vendors gets underway ASAP. So don't just look at the technology this week, take a look at how that technology can be used ... and visit every booth! Programmers, too!Random Notes
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