NCTA: Cable execs eagerly exploiting broadband

SAN FRANCISCO--The U.S. cable industry is licking its chops over the opportunities that lie ahead, and expecting to exploit its leadership in broadband penetration to deliver a new generation of more personalized, interactive and communications-based services. That was the message of Sunday's opening general session of the National Cable Television Association in San Francisco.

"I'm more excited than ever about cable's opportunity," said Paul Allen, chairman of Vulcan Communications and a major cable investor, during an opening panel hosted by Ron Insana of CNBC.

"This is the most exciting time I have ever experienced in the industry," said Tom Rutledge, Cablevision chief operating officer.

One reflection of the changing times is a dramatically revamped NCTA event. The National Show, as it is known, is one day shorter and more focused this year, according to Steve Burke, the Comcast chief operating officer who chaired the convention committee.

"This show is less focused on making deals and more focused on thinking about the future of the cable industry," Burke said, highlighting what he called cable's "unique position." "This show is less about the cable industry talking to itself and more about having a real dialogue with the leaders of the many industries with which cable is working, including Hollywood, the high-tech sector and the telephone business," he said. "We will showcase how our worlds are intertwined."

The few words of caution were uttered by Kyle McSlarrow, the newly chosen president of NCTA, who touched on the pending "Brand X" case now before the U.S. Supreme Court, that could force the cable industry to provide open access to its broadband networks to independent ISPs.

McSlarrow made a short appeal for maintaining a light regulatory hand on IP services, such as voice, as long as basic requirements are met--including support for 911, CALEA and the Universal Service Fund, which the cable industry has agreed to provide. And he agreed that IP-based video should be treated equally to other IP services, as long as its basic requirements are satisfied, such as ubiquitous availability, consumer protections and equal opportunity employment.

But most of the discussion centered on more exciting prospects such as the explosion in online gaming, the increased customization of content development and distribution, and the real possibility for shifting revenue models that move away from basic subscription services.

Jerry Yang, co-founder and chief Yahoo at Yahoo! admitted in the opening panel discussion that his presence was a clear indication of his company's interest in doing more with the cable industry.

"I wouldn't be here if I didn't want to do more business with the cable industry," he said. "Over the next 12 months, you will see a lot of hype, a lot more experimentation around content, advertising and monetization, and the movement of inefficient advertising dollars to make sure we get the benefit."

New services can be built around search capabilities, incorporation of communications into content, and personalization, said Yang, whose company is notably paired with SBC Communications in its broadband service.

The "inefficient advertising dollars" to which Yang referred included newspaper and broadcast TV advertising, which still pull in millions despite the fact their audiences are shrinking, the panel agreed.

The cable industry wants to explore new ways of driving revenues, said Rutledge, to relieve price pressure for its subscriber services. While Cablevision's ARPU "is climbing nicely" to more than $90 a month, the hope is to capture advertising revenue and other types of usage-based income.

Bing Gordon, executive vice president and chief creative officer of Electronic Arts, sees bandwidth demand for online gaming increasing exponentially, and encouraged the cable executives assembled to begin thinking more about the younger market. "Recruit the Nintendo generation and figure out how to listen to them about convergence," he said.