The cable industry has no shortage of things to crow about at The Cable Show 2013 in Washington, D.C.
AMC’s hit series “The Walking Dead” recently became the first cable show to top the scripted-TV ratings, finishing second only to “Sunday Night Football” in total ratings for the 2012-13 season. HBO’s “Game of Thrones” wrapped its third season Sunday and is continuing to gain viewers across multiple platforms: linear viewing in its prime-time Sunday spot, repeats, on demand, DVR and streaming via HBOGo.
While those are just two examples — the stars of A&E’s lower-brow “Duck Dynasty” were a big draw Monday at the conference — they illustrate both the successes and the looming challenges facing the cable industry.
Streaming services such as those offered by Netflix and Amazon are revenue sources and drivers of content discovery — for now. The escalating costs of programming, especially for sports, hasn’t led to massive cord-cutting, but consumers’ patience will be tested as more options become available. The cable bundle has endured amid some withering criticism, allowing for a large and diverse content universe. And the industry has been able to weather DVR and video on demand — even find great success in those segments — but eroding top-line numbers will eventually force changes.
The panelists for The Cable Show’s opening session conceded all this — Charter Communications CEO Tom Rutledge said the blurred lines between Internet and television are making it difficult to sort out business models, but was quick to point out: “It’s all television.” AMC Networks chief Josh Sapan said streaming is helping to boost AMC’s ratings from season to season by keeping them in the conversation and increasing their exposure, but there’s always a risk that it quickly turns from friend to foe.
Executives from Jawbone, which makes connected devices, and Vox Media, which runs The Verge, among other sites, said the cable industry needs to move faster and be less afraid of failure.
“You cant be afraid to disrupt anyone, especially yourself,” said Vox CEO Jim Bankoff.
Some of that slowness could be seen in a later session on “New (and Cool) Approaches to Content Recommendation.” Executives from Cox Communications and Comcast Cable talked about the recommendation and personalization features of their latest user interfaces. They said Netflix and Amazon have prepared users for this kind of service, but added that they were being careful in their approach, not wanting to disrupt the habits of currently satisfied users.
The fact remains, however: Netflix and Amazon have been doing this for years. Is moving slow the right call when you’re already behind? TiVO executive Jeff Klugman, also on the Content Recommendation panel, hinted that it might not be wise to wait for users to demand a change — that sometimes you have to take a risk.
The thinking behind breaking up the cable TV bundle in favor of a la carte is this: Customers will eventually tire of paying for so many channels they don’t watch. But consider Netflix: Does anyone complain that they’re paying for all those movies/TV shows they don’t watch? The key, perhaps, is Netflix’s recommendation service. It takes an oppressive amount of choices and turns them into personalized, consumable lists. The range of choices is still there — it’s just presented better.
Cox’s Len Barlik said users’ changing habits are “making all of us raise our games.” Comcast’s Charlie Herrin called the new expectations “liberating.”
But Barlik and Herrin are going slow on recommendation and personalization because they don’t want to alienate viewers who know what they want when they turn on the TV. That’s seemingly prudent, but everyone has to know how to find what they’re looking for by now. If cable providers can take the increasing amount of content being offered and personalize it, viewers may re-embrace having so much to choose from. End mindless channel surfing, and you might help save the bundle.