The message you get when you try to access interactive services on
cable just about sums it up. Please wait, it says. And you do. This is
not a technology for impatient people. In more ways than one.
It isn't easy being a fan of cable. It's been on the verge of something
big for donkey's years, but each time the industry convinces you it's
about to inherit the future, it only contrives to stumble again. It has
been in the news for all the wrong reasons as ntl tries to manage debts
of more than £12 billion. There had to be cutbacks and, last week,
the axe began to fall. Mike Hounsell, the company's overall marketing
chief, was the highest profile casualty but Charles Darley, the customer
marketing director for the residential side of the business, ntl Homes,
was also included in a list of nearly 50 impending departures.
Things look brighter at Telewest, which has no immediate plans to make
marketing cutbacks. It is pressing ahead with ad campaigns reinforcing
the company rebranding as Telewest Broadband and, in particular, backing
its Talk Unlimited and Blueyonder services. But last week it parted with
Chris Pilling, its customer marketing director. Pilling was instrumental
in the rebranding initiative.
Is this just the same old story for cable? It has always been able to
call on a unique selling proposition. In the analogue TV market it was
the fact you didn't have to disfigure your house with an ugly dish; in
the digital age, in theory, it's the best technology to offer
convergence - both broadband internet access and interactive TV.
But the view from the advertising industry is that cable perpetually
fails to make the most of its assets. And when they see cable making
marketing cutbacks, advertisers could be excused for feeling
So, please wait. Just how patient should we be with cable?
Bart Michels, the brand and communications director of ntl Homes, points
out that the industry is just entering its second phase - with most of
the construction work now done it will start to reap the return on its
investment in state-of-the-art, fibre-optic technology. Digital cable
has overtaken digital terrestrial in the UK and is chasing digital
satellite hard. Michels adds: "Interactive on cable is also succeeding.
Across Telewest and ntl, we now have nearly two million households with
access to interactive digital content, with 58 per cent of ntl's
subscribers using the service weekly and 20 per cent using the service
on a daily basis. In addition, cable delivers a range of inexpensive but
effective advertising opportunities across television, narrowband and
broadband internet. In 2002 and beyond, cable will continue to develop
as the best platform for interactive and enhanced TV. Interactivity is
cable's birth right - we built our networks with a return path, knowing
that broadband and interactivity would be central to future
communications. We've delivered the technology, we've delivered the
brand, we are delivering the value and an unmatched range of services.
We will continue to advance on these achievements for many years to
Is he right? After all, there are a number of threats to cable's
position. With Sky Digital so far ahead in the number of homes it owns
and with regard to the way that its technology is evolving, cable could
eventually become a sideshow.
And for many months now BT has been looking at using new digital
switching techniques that would allow it to turn its old-fashioned
copper wire telephone lines into what would basically be a new-fangled
cable TV and broadband internet network. It could do this itself or it
could even do it with Sky. And when it comes to telephony and the
internet, cable is facing competition from mobile.
So it's not a good time for the cable industry to blink.
Chris Ketley, the managing director of Zenith Interactive, cautions
against jumping to any rash conclusions. He states: "It is true that
there has been lots of hype and excitement in other sectors - especially
in mobile recently. That said, the feeling is that cable is not going to
go away. It's an industry that needs huge amounts of investment just to
get the basics off the ground and once you have made the investment then
you have to go out and create demand for services. The bottom line is
that what it offers is better than what can be put through the telephone
The market should continue to be patient, he adds. "It's true that
cable's marketing could have been better. It's true that consumer demand
has not been tapped sufficiently. But the market is still at an
embryonic stage. There might need to be more consolidation but I hope
the City continues to give cable the time it needs."
Dan Clays, the director of interactive media at Quantum, says: "There is
the BT threat though - and whatever BT has been saying, the threat is
still there. And it's true that Sky is far ahead and it's certainly got
the numbers. From cable's point of view there's still a whole load of
analogue homes to be converted - and it's far more of an infrastructural
issue with cable than it is for satellite. But it's not as if it's lost
that market - it's still there. The thing is that even if the cable
universe is smaller, it's still going to be important and it's always
going to be an interesting proposition. You have to see it within a
bigger picture - for instance, you have to think about how you are going
to support TV commercials running on all the channels that go through to
Telewest and ntl homes. There are lots of things we don't know about
this market. After all, we don't know where we are with digital
That's a viewpoint echoed by Adam Pace, the i-trade group head at
He comments: "Those who say that in the age of fragmentation, cable has
missed its chance, overlook several things. Cable has been over-hyped
but one day soon the whole country will be digital. More than 40 per
cent of homes currently have access to some form of interactivity and
multichannel viewing will continue to grow. While people may not be
inclined to send an e-mail on their TV, the figures seem to suggest that
the same will not apply to gambling, ordering videos or films, or even
playing games - all of which means that cable can leverage greater
revenue per customer than traditional broadcasters. At the end of the
day cable still has a major USP - its bandwidth and its return
And Pace, like Ketley, believes that further consolidation will enhance
cable's prospects: "As ntl and Telewest move closer to a merger, both
are said to have met their fourth-quarter profit targets. If they can
both weather the current financial storm and sort out their proposition
to consumers, it may be too soon to write them off."