Cable has always had a huge perception problem. Think multi-channel
television and the word that probably comes to mind is ’satellite’. For
a number of reasons, timing and marketing being high on the list, TV
choice has become synonymous with a delivery system. OK, not everyone
can get cable, but even those who are wired up will tell you that cable
gives you ’satellite channels’.
Cable is definitely not sexy. It is associated with digging up roads,
pulling down trees and breaking promises. It has never managed to
develop a USP.
It could be argued that the industry has started to get its act together
over the past six months or so. For a start, there’s an ad campaign from
the sector’s leading company, Cable & Wireless Communications. And the
big players are promising to gang up to stop media owners dictating
terms that effectively penalise viewers for taking satellite channels
via cable.
Last week we saw the industry’s bravest move to date. The UK’s
second-biggest cable company, TeleWest, joined forces with three others
- NTL, General Cable and Diamond Cable - to sign a pay-per-view film
deal with Warner Brothers. The companies plan to set up four movie
channels in time for Christmas. Longer term, and with digital in mind,
the consortium wants to sign deals with other studios. It envisages
setting up around 60 movie channels, offering ’near video on demand’ -
that’s where you have a cluster of channels showing the same film but
with its start time staggered.
So is this first deal part of a great leap forward? Is cable breaking
out of its encirclement and taking the campaign to the enemy,
satellite?
Perhaps. There are some rather obvious wrinkles. For instance, the
Warner deal isn’t exclusive - Warner has signed a similar deal with
BSkyB. And Cable & Wireless, although assiduously courted by the cable
consortium, is reluctant to come in on the deal. It has even been
contemplating joining forces with Sky.
A division in the ranks now would not be good news for cable. But isn’t
the Warner deal a praiseworthy start? A sign that a dull delivery system
is starting not only to raise its profile but also to think like a media
owner?
Russell Boyman, the managing partner, broadcast, of Mediapolis, concedes
cable is moving in the right direction. But he still has doubts. ’Most
new connections to multi-channel TV these days are through cable. But
they are still buying into Flextech and Sky. If this is a further
attempt to establish a unique selling proposition for cable, then great.
I’m not sure it will succeed, though,’ he says.
Paul Longhurst, the media director of Ammirati Puris Lintas, believes
this is a significant challenge to BSkyB. ’Structurally, this is all
about the big question of owning the gateway to the consumer,’ he
states. ’If you own the gateway, do you own the consumer? Can you merely
own the gateway or do you have to be a content provider too? This deal
is all about finding out.’
Longhurst argues that Sky needs cable more than most people realise -
and that reliance will increase as digital comes along. But it’s not
necessarily about establishing a USP for cable as a delivery technology.
He adds: ’Forget about wires in the ground. Think of these companies as
retailers of TV programmes. They don’t have to offer different
programmes. They might be offering them at a cheaper price and, with pay
per view, you don’t have to have huge audiences to make it pay. The
thing is that cable households might not take the Sky movie channels
because they watch only a couple of movies a month. This might seem very
attractive indeed.
’We’re seeing the market moving from subscription to pay per view. The
biggest loser may well be Blockbuster video shops.’
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