Small, Midsized Cable Operators Ponder HDTV

Panel at The Independent Show Discusses Challenges, Concerns

By Linda Moss -- Multichannel News, 7/30/2007 5:57:00 PM

Monterey, Calif. -- HDTV may be a bandwidth hog, but it’s a compelling product that independent cable operators need in order to compete against satellite, several cable executives said Monday.

“It’s a race against satellite to get more HD on,” said Steve Weed, CEO of WaveDivision Holdings. “It’s a big issue, but we’re ahead of them today.”

Weed was a panelist during the opening session, “The Decision Makers,” which kicked off The Independent Show here.

That panel of small and midsized cable operators talked in depth about their challenges and concerns near-term and longer term, in the next five years -- a discussion that also addressed the Feb. 17, 2009, digital transition and retransmission consent.

The group described bandwidth constraints as one of their top issues, especially in an era when they need to be offering more HDTV services to compete with rivals such as DirecTV, which boasts -- and is heavily advertising -- its promise to launch more than 100 HDTV services.

“Last year was a great year,” Weed added. “Most of us took subscribers from satellite. And a large reason for that is that we got HD launched before they did. DirecTV responded -- we kicked the giant in the toe and they responded by spending millions of dollars on an ad campaign saying, ‘Back to the Future, 100 channels of HD.’”

Panelist Jeff Ross, president of the Armstrong Group, also cited the importance of HDTV.

“Looking at some of the competitive threats that are present and are coming, I think it’s important for us to continue to grow our HD product,” Ross said. “We are the choice for HD product today, but I do think [DirecTV] will come out with tonnage … but we as cable operators have the ability to pick the right content. It’s ours to lose.”

His cable company is now offering 20 HDTV services and its looking to double that number, to 40. And customers particularly want the broadcast networks in HDTV, according to Ross.

Weed added that the primary focus for his company is going to be HD video-on-demand -- “an opportunity to have hundreds of hours of HD content available to the customer when they want to watch HD … It doesn’t need to eat up a lot of bandwidth. Maybe that’s a better way of beating DirecTV at this HD race.”

Panelist Kay Monigold, CEO of Buford Media Group, said her company -- its largest system has 15,000 subscribers -- is just starting to roll out voice, so it will soon be able to offer the triple-play bundle of video, phone and high-speed data.

“We don’t have any HD right now at all,” Monigold said. But she added, citing customer demand, that Buford is looking to roll out HDTV at some systems this year. “We feel like we’ve got to have some HD offering,” she said.

Panelist Steve Severn, NPG Cable’s chief operating officer, said that in rural Arizona -- where his company can’t pick up the broadcast HD signals out of Phoenix but still has HD content -- those markets without broadcast HD are growing at only one-tenth the rate of those with broadcast HDTV. “So consumers want the broadcast HD content,” he added.

Under questioning from moderator Steve Effros, president of Effros Consulting, the panel lamented the bandwidth crunch they face as smaller operators. They talked about some of the solutions, such as switched digital video, going all-digital, or -- in order to make room for HD channels -- moving networks off basic to digital.

Part of the session dealt with the way cable can leverage helping in the digital transition to get help from Washington on other issues, such as retransmission consent.

“This may give us some negotiating ability that we haven’t had,” Monigold said.

Ross said cable companies have a “great opportunity” to solve the issue of analog-TV sets being rendered useless in 2009 if they are able to downconvert digital signals to analog. “We as cable operators really do have the solution,” he added.

The panel also bemoaned cable’s less “sophisticated” skills, compared with the telcos, when it comes to marketing and customer service. “Customer service is the key to our future success of retaining our customers,” Ross said.