MEDIA FORUM: Can cable ever live up to its interactive promise? - Cable has in-built advantages but it remains debt-ridden and accident-prone. Is adland right to be frustrated? Alasdair Reid reports

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

terrestrial either."

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."

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