DENVER — Cable operators, networks and other programmers must learn to establish new business models in an age of video downloading and streaming services.
That was the common theme expressed by panelists who participated in the first annual Summit on Intellectual Property Digital Media, held this week here at The Cable Center.
HBO Chief Technology Officer Robert Zitter kicked things off Tuesday morning with a keynote that addressed some of the shifting tech trends and how they are impacting the traditional television business model.
Among those trends are the costs of hard disk, flash and RAM-based memory, which are falling faster than Moore’s Law in the processing world. That, he said, is enabling consumers to buy devices that can store video, “and every year it can store more.”
In connection with that, the speeds for consumer Internet access services are surging. While newer ADSL2+ technologies aim for speeds as high as 24 Mbps, most of today’s HFC plant is built out to handle capacity of roughly 5,066 Mbps, while top-end fiber-to-the-home networks push the bar a smidge higher – about 5,166 Mbps.
Other trends include the emergence of digital home networks and their ability to connect PC-stored video to television screens.
Those trends have serious implications for today’s TV business models.
Ron Lamprecht, the VP of new media for NBC Universal Cable, acknowledged that TV models, in the wake of time-shifting and portability, have changed and grown more complicated than they have been over the past three decades.
“We are really more of a content creator than a traditional packager and distributor of content,” Lamprecht said, noting that a critical question today is how networks can protect their multi-billion-dollar business while also playing a key role in these new forms of distribution.
It’s an easy question, “but the answer is so complicated,” he said.
Programmers and networks have to address an audience that is quickly fragmenting. Although some shows still command a large audience, that audience is not as large as it was 10 years ago.
A key challenge is how to “reassemble that audience,” Lamprecht said. These days, networks have to ensure that their shows can get to all the places that consumers want to access them.
The new models are also affecting the content creators, which can’t make enough revenue on traditional theatrical and TV channels, according to Rich Fickle, the EVP of strategic development for Ascent Media Group. Now, they have to account for global distribution on multiple platforms.
Starz Entertainment Group, meanwhile, is participating in these new distribution models, particularly with Vongo, the company’s recently launched direct-to-consumer Internet video service. Vongo complements SEG’s premium video services offered in partnership with cable operators and DBS firms.
“Where you are is where we’ll try to get [content] to you,” said Joe Cantwell, VP of marketing, advanced services for SEG.
Lamprecht added that “we want to be there,” if there’s an opportunity for his company to distribute content to cell phones or other devices. He also acknowledged that such content must also be protected thanks to growing digital piracy issues. He said Battlestar Galactica, a popular series on SCI-FI, represents his company’s most pirated piece of content.
Despite the potential threat Internet-delivered video services represent to cable operators, it’s not necessarily viewed as a big concern in the short-term, noted Vince Groff, director of video product development for Cox Communications.
“If I were only in the video business, I might be more concerned,” Groff said, noting that high-speed data represents Cox’s largest growing business.
Zitter reiterated HBO’s position that place-shifting, despite its use of the so-called “analog hole,” could infringe on network copyrights.