I don’t want to get too melodramatic (not to mention iambic) about it, but the collapse of the Comcast–Time Warner Cable merger has more than a tinge of Shakespearean tragedy about it. There’s an aging family patriarch (Founder Ralph Roberts), a princely inheritor to the father’s throne (CEO Brian Roberts), a high-profile and controversial advisor (David Cohen), a phalanx of nefarious (depending on your point of view) enemies, and a whole lot of bloodshed (metaphorically).
Of course the ending for all of the players on this stage has yet to be written. But having emerged from several days at the cable industry’s annual convention – now somewhat anomalously called INTX – many of the most prevalent topics of discussion and consternation could have been fine subjects for Shakespeare as well. To wit (and to woo), here are some of my most important takeaways and issues to watch post-INTX (with links for those who must brush up your Shakespeare):
Alas poor merger I knew you (not) – According to Brian Roberts, “We’re moving on.” The CEO scored some good-natured laughs and goodwill at his own company’s expense when he showed a quick video of Vin Diesel from NBCUniversal’s Furious 7 saving co-star Michele Rodriguez from a massive explosion (the deal got blown up – get it?). Although they may have been bloodied in reputation, it’s hard to see dramatic financial peril at Comcast. His annual demonstration of Comcast’s latest and greatest technology toys featured the link between Comcast’s X1/Xfinity platform and “Internet of Things” elements such as home security and electricity usage monitoring. Although Comcast never seemed to have nailed this innovation argument in the merger fight, Comcast can emerge just as strong if not stronger as a technology force in the Internet Service Provider industry. The company may well become more of a technology licensor to others of its cable brethren – with or without acquisitions. As for Time Warner Cable, we all remain in a wait and see mode, as the company’s CEO Rob Marcus and Charter Communications’ CEO Tom Rutledge unsurprisingly and quickly deflected any talk of deals between their firms. At the panel of financial analysts, one of the major predictions for the industry going forward was more merger activity – it remains to be seen which shoes fall next.
Once more (at least) unto the breach – The speech from Federal Communications Chairman Tom Wheeler was eye opening on many levels, none of which bode well for the cable industry. In fact, Wheeler’s tone and entire mien before the convention was of a gladiator towering over his prey, reviving memories of Al Gore’s dreaded reference to “Cable Cosa Nostra” in the early 1990s. Wheeler didn’t simply defend the new common carrier regime for ISPs, but went further in promising to encourage new competitors to cable in multichannel video and Internet service. And his advice to cable operators was to look beyond their own geographic markets to compete (“overbuild” as it was once called) against other cable operators. So you have an FCC Chairman who will regulate the terms, conditions and (maybe) the pricing of broadband service and at the same time seek more, and more risky, investment in broadband? Don’t expect too much mirth coming from the FCC for the cable crowd in the next couple of years.
Is a rose by any other name….still cable? I was fascinated by a discussion between National Cable Telecommunications Association CEO Michael Powell and Re/Code founder Kara Swisher, in which Swisher posited that maybe the whole “cable” name needs to go away. Powell didn’t really deny that, but no easy replacement leaps to mind (I really hope it’s not “INTX”). No matter what name you settle on, the cable industry remains challenged by its decades-long bugaboo – providing services that people love (dozens of programming networks that didn’t exist before cable television, plus a host of Internet apps delivered via broadband) but a persistently negative public perception (and sometimes reality) of unsatisfying customer service. With all the buzz of Verizon’s “skinny bundle” (it’s new “Custom TV” offering), not to mention over-the-top video subscription powerhouses Netflix, Amazon, and Hulu, and even music subscriptions services such as Spotify (all bundles), it’s pretty clear that people don’t really hate bundles. They just hate paying what they perceive as “too much” for them – and that’s cable’s biggest problem to solve.
Is this a Periscope which I see before me? If INTX attendees were playing Bingo (the office version), they would have hit bigtime with “Periscope”, which may have been uttered only a couple of fewer times than “Comcast” at the convention. Periscope is Twitter’s live video app, launched only six weeks ago. I actually “periscoped” (is that a word yet?) some of the INTX Opening Session and Twitter notified my followers without me doing a thing (thank you to the 7 people who joined in). I got a chance to spend some time with NCTA President & CEO Michael Powell at the convention, and Periscope ranked pretty high on our conversational word cloud. I’ll reserve the temptation for any crystal-balling on this, but safe to say if you want to engage in meaningful conversations about media right about now, I’d get yourself some time on Periscope.
Wherefore art thou brands? There are only two fundamental sources of revenue in the media business – the consumer (subscriptions, rentals, purchases, etc.) and advertising. It is astounding this late in the evolution of the cable business how relatively little attention at the industry’s major annual gathering is paid to the latter. Yes, there were the inevitable discussions of dynamic ad insertion and addressable advertising. But when Periscope crushes advertising on the word cloud, something has to change.