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by paul kagan
WHAT'S ON TAP IN CHIGAGO IS LESS A CELEBRATION OF CABLE'S PRESENT THAN A PARADE OF THE INDUSTRY'S FUTURE.
When the NCTA convenes its golden anniversary convention in Chicago next week, there may be fewer cable-system-operating personnel in attendance than ever. Vendors of programming, hardware and services will mill around their booths chanting their annual mantra, ?Not Enough Buyers.? (It's annual because they find enough business to keep coming back.)
Consolidation and personnel cutbacks are making operating systems progressively ? in some cases, regressively ? leaner. But you won't need to carry a canteen through a Death Valley of exhibits. The show's new demographics are changing it into a huge technology love-in, with busloads of hopeful hardware merchants and hungry entrepreneurs prowling the aisles for potential customers?and that New Age wave: strategic investors and alliance partners.
Operators will pay their respects (admittedly too late for certain buried vendors) and make mental note of the paraphernalia they'll need for the Big Bang. That's the time, a few years hence, when the newest bells and whistles will converge: IP telephony, advanced bandwidth management, super server storage, full interactivity, global interconnection on a common standard?and more.
For now, though, the inordinate capital investment of 1998-2000 has created more technology than most providers can install and implement and more than most consumers can afford. This doesn't lessen the science of the creators or the desire of the consumers. It just shoves the Big Bang ? when all paths cross ? a little further out in time.
That's one of the keys to reading a cable road map: how long it takes to get from here to there (see last week's column about patience). I expect operators in Chicago to say that a lot of the new tech isn't yet ready for prime time, a statement driven by a) scientific fact, b) the price of the new toys, c) the relative need of a given operator to upgrade and d) competitive pressure (which is tied to c).
Notice I didn't include capital on that list. Here in postcrash 2001, where bond buyers are still licking their high-tech wounds, I figure cable operators could easily fund expansion, if they saw an obvious route to revenue and cash flow. It's why they're sowing their systems with digital set-top boxes and high-speed modems, as they did two and three decades ago with new amplifiers, earth stations and converters.
What's on tap in Chicago is less a celebration of cable's always-controversial present than it is a parade of the industry's future. Like the New York World's Fair of 1939, which accurately portrayed a future nation of interstate highways interconnecting not-yet existent suburbs, the 50th NCTA show will be loaded with the expectant ecology of ITV, home networking, rich media, targeted advertising, plug-and-play devices, portable media and other things that, yes, you can do now, but that can't yet be scaled to 90 million. homes. When, then? The World's Fair was less than 20 years ahead of its time. 50th NCTA delegates might not have to wait five.
Analyst Paul Kagan writes exclusively for CableWorld. He is an active investor and money manager and often owns securities mentioned in his columns. He may buy or sell before and after the columns are published, and his positions may change at any time. Information in his columns does not represent a recommendation to buy or sell securities, nor is it a solicitation of any securities transaction. Kagan is vice chairman of Primedia Ventures, an affiliate of the owner of CableWorld.
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