MEDIA: PERSPECTIVE; Cable community now has the skills to build on content

Are some people prescient or what? Only two weeks ago we reported a speech by Adam Singer of TCI, one of the cable industry’s gurus and a man honed in the US market, in which he effectively slammed the UK cable industry. ‘Winners will win as much because of their culture as their resources...’ he said, ‘...to be an industry we have to be a community, and there is little evidence of that.’

Are some people prescient or what? Only two weeks ago we reported a

speech by Adam Singer of TCI, one of the cable industry’s gurus and a

man honed in the US market, in which he effectively slammed the UK cable

industry. ‘Winners will win as much because of their culture as their

resources...’ he said, ‘...to be an industry we have to be a community,

and there is little evidence of that.’



Wise words, mate, and then what happens? Mercury, Bell and Nynex all get

together (Campaign, last week) to form just that - a community.



What cable has been missing is some kind of jump start - a catalyst that

gives the industry the profile and the muscle its regionalised,

franchise-based structure so lacks. Putting two of the biggest cable

companies together with the only credible challenger to BT effectively

does that. Such has been the pace of Sky’s development in the last year

or so that it was in danger of making cable obsolete or, if not that,

virtually redundant. And that’s before any prospective deal between it

and BT.



Of course, cable is not out of the woods yet, but if you deconstruct the

business into its component parts you can see that it has at last

created a platform to build from. As in any other media business, cable

is about two things: distribution and content. Cable starts as an

engineering business - you spend a fortune digging up pavements to lay

the pipes. That’s the distribution bit and it’s pretty much complete,

but it appears to have left the industry exhausted and unable to get on

with phase two.



That involves acquiring the content, packaging it and marketing it,

areas in which the extra muscle of the new company will help. But the

content issue has been complicated by the question of telephony.



The question now is whether the Mercury deal means cable will try to

drive its penetration through telephony or through content. Up to now,

it has been schizoid about this, with some using telephony and some

promoting individual programmes and channels in the hope that this is

what turns the customer on. The Mercury deal suggests that Nynex and

Bell Cable will promote on telephony. In the short term, that is what

has been driving take-up and may be the correct thing to do. But it may

be that it conceals other more fundamental faults. After all, if the

telephony angle is so attractive, why is cable’s churn rate so high at

20 per cent? It can’t be the phones, so the answer must have something

to do with the content or the packaging and pricing of the content, an

area that will become more difficult as more channels become available

(see TV Report in this issue). It’s one of the oddities of cable that

it promotes itself on providing choice but actually packages content in

such a way as to minimise it. That’s a marketing issue, and one has to

question whether Mercury can add the necessary marketing culture and

savvy to what is still an engineering-led industry.



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