MEDIA FORUM: What will Simon Duffy's appointment mean for ntl?

Barclay Knapp has exited ntl with a £1.3 million pay-off. Good news? And what should we expect from his successor? Alasdair Reid investigates.

Some people are never happy. Barclay Knapp (a man whose management style was too "colourful" for some tastes) had hardly been given time to finish his resignation speech when some people in the media industry were complaining that his successor, Simon Duffy, was too boring.

Duffy, who first joined ntl back in April 2003 as its chief operating officer, is regarded as a safe pair of hands. As opposed to Knapp, obviously, who was often referred to as a visionary and whose business strategy seemed to lurch from the extravagant to the desperate and back again as cable's killer breakthrough failed to materialise and debts mounted. Last week, he clearly decided it was time to take the money (a cheeky little £1.3 million pay-off) and run.

Possessing a broad range of relevant experience, Duffy has worked at a media company (if you stretch a point: we're talking about EMI), a mobile telecoms company (Orange) and an internet service provider (World Online).

He ticks lots of boxes. Only trouble is (some say), he is basically a finance director, a numbers guy. Duffy made all the expected noises at presentations last week. "I am hugely excited about the challenges ahead. Ntl is a great company with enormous untapped potential. I intend to ensure we deliver it," he enthused. But people worry he lacks oomph.

On the other hand, he had some fairly attractive numbers to present, notably the continued success of the company's broadband internet proposition - the service now has upward of 800,000 subscribers - and churn rates are down to less than 13 per cent. So at least he starts on an up.

But the ntl management was more than a little irked that its story had been all but obliterated by BSkyB's results. You'd think it would have learned to live with this sort of thing. Cable has better technology but satellite overshadows its earthbound rival by having better everything else - better marketing, better cover, bigger subscriber numbers, more channels, more interactive advertisers. And, you might add, bigger personalities.

Just what can we expect from the Duffy era and will he resolve the issue of whether a merger with the rival cable operator Telewest is inevitable?

Nigel Sheldon, a managing partner of MindShare and an associate director of the Henley Centre, argues the much-mooted merger has to remain at the top of Duffy's agenda. "It does seem to be the best option that ntl can pursue and this (management change) may well bring it closer. It makes real sense for cable to be consolidated," he states.

But even if a deal is on the cards (and it's by no means certain), that doesn't mean Duffy can take his eye off the ball operationally. "I know people have been saying he'll be a safe pair of hands but ntl, and cable as a whole, needs management that can continue to innovate. Sky won't rest on its laurels. Cable has to be evangelical about the interactive future and the question will become increasingly complex as TV dovetails with other devices," Sheldon adds.

Sheldon argues the multichannel proposition is changing and many customers are satisfied with a more limited version of multichannel available through Freeview. One of cable's perceived advantages was in interactive TV but the notion of interactivity has moved on because viewer participation can now be offered in a number of ways.

Bob Wootton, the director of media and advertising affairs at ISBA, believes that advertisers generally wish the cable industry well: "Cable has always been the platform with the highest technological specification. From a consumer point of view, if you have a decent set the TV pictures are exquisite to look at and although it doesn't offer the sheer number of channels that satellite does, its multichannel choice is pretty good. Where interactive advertising is concerned, it is unique in that it offers a big pipe in both directions, which has an amazing potential. Unfortunately, advertisers don't get up every morning saying 'how can I get more interactive TV using a big pipe in both directions?', although this is definitely the year of interactive TV. But advertisers want principally to add interactive TV to their existing television activity, they don't want to be platform proscriptive - and satellite is the natural first-choice platform because satellite offers the numbers. Satellite has also put its house in order where interactive production issues are concerned."

Both Telewest and ntl have been doing all they can to make interactivity more accessible. But to cable's enduring shame, however, it has failed to introduce anything more than the most basic of interactive advertising services. You can have a microsite and banner advertising as a portal to that microsite but you can't have the "press the red button for more information" facility in real-time broadcast spots. And this, of course, is the big deal where interactive advertising is concerned and it's something Sky is developing.

Alison Davis, ntl's head of advertising media, says that it's on the agenda but she can't talk about a timescale. "In the past we've been bitten through overpromising," she says.

Cable in general, and ntl in particular, has been talking up the broadband internet side of its business. Increased broadband penetration will certainly be a long-term benefit to the advertising industry - it will allow the evolution of more sophisticated online advertising formats including rich media and full-on video streaming. But many are frustrated by what they regard as cable's inability to push full television interactivity further up the agenda.

Andrew Howells, the founder of the interactive TV consultancy Zip Television, agrees that the biggest issue for Duffy is a possible merger with Telewest: "If that is his core objective, I think lots of people will be pleased.

It's not so much an obvious step as an absolute must. We need a competitor to Sky in the market and together the two cable companies will be a stronger competitor.

"Interactive TV has been a big disappointment as far as both cable companies are concerned. They've introduced new software and have some enhanced programming but they've never been prepared to invest in interactive advertising. That's disappointing because it's a better platform."

Because Sky has a limited return path (it has to be routed down phone lines, so it's not always on), everything is downloaded from the satellite in one mass. Viewers can play with this material to their hearts' content, but Sky doesn't know what the viewers have been doing until they choose to make their official response - a request, say, for a brochure. With cable, each new piece of content is "served" in real time as the viewer requests it.

"We need competition," Howells concludes. "We need more pressure on Sky to provide a more measurable and accountable advertising service."