The National Cable Television Cooperative said it has reached an agreement with Evolution Digital to make the WiFi and video solutions provider’s suite of broadband and Android TV products available to NCTC’s more than 700 service provider members. 

As part of the deal, NCTC member operators can access Evolution’s OpenSync certified devices as well as its line of Android TV hardware including eSTREAM 4K, EVO FORCE 1 and EVO PRO.

“This new agreement further builds upon the trusted and long-standing relationship between Evolution Digital and NCTC,” Evolution Digital chief revenue officer Marc Cohen said in a press release. “We are excited to continue our close partnership to enable best-in-breed services for the connected whole-home ecosystem. Evolution Digital’s acumen for delivering the latest innovative technology at a competitive price point, coupled with NCTC’s reliability and efficiency for managing materials and transactions, breeds reliability and promptness with the service providers that we jointly serve. We look forward to working closely with NCTC.”

News of the Evolution deal comes on the heels of an enhanced partnership agreement between the co-op and OpenVault that will bring technical solutions and data-driven analytics to NCTC members to help improve broadband business outcomes. 

As part of that agreement, NCTC members will have access to OpenVault’s lineup of tools to improve network performance, subscriber satisfaction and monetization. NCTC and OpenVault also will provide the NCTC-OpenVault Industry Trends and Analytics Report, a customized report containing leading indicators and analysis to help NCTC members make informed business decisions and stay ahead of broadband usage trends.

As part of the preferred partnership, OpenVault will drive value to NCTC members via:

“Since 2012, OpenVault and NCTC have had a great partnership. OpenVault’s tools enable our Members to make data driven decisions to better manage and monetize their networks as consumer demands rapidly change,” NCTC director, technology innovation Zach Cutrell said in a press release. “This new agreement only strengthens our relationship, expanding on the available feature set while introducing new pricing options for even our smallest Members.”

NCTC and OpenVault (Booth 315) will make the first edition of the customized OVBI report available at The Independent Show July 24-27 in Orlando, Florida. In addition, OpenVault CEO and founder Mark Trudeau, Cutrell and other NCTC members will discuss broadband usage trends during an NCTC-members webinar on August 18 (2 PM CT).

“NCTC members’ commitments to network performance and customer satisfaction have been huge contributors to broadband’s near-ubiquitous footprint,” OpenVault chief commercial officer Josh Barstow said in a press release. “Working more closely than ever with NCTC, we can deliver the solutions and expertise operators need to bring the full value of broadband to the communities they serve.”

The thermometer reads into the triple digits at the NCTC’s Lenexa, Kansas, office on a late-afternoon June Tuesday, and Lou Borrelli has his sleeves rolled up.

Now 13 months into his tenure as CEO of the National Cable Television Cooperative, the veteran cable executive has been busy transforming the entity, once almost entirely devoted to program-licensing negotiations for its smaller cable operator constituents, into something more useful for cable’s more consolidated connectivity age.

Choosing an odd metaphor for such a hot day, the part of the NCTC’s iceberg poking out of the water is The Independent Show, which is finally set to conduct its first live, in-person event of the COVID-19 era, convening in Orlando, Florida, July 24.

Exhibition space is sold out, Borrelli said, and he expects to exceed the attendance numbers of the NCTC's last in-person convention back in July 2019, and the metrics of the 2018 event, as well. He calls the Independent Show the “last big cable convention,” and he might be right about that.

One of the big unveilings at The Independent Show this year: The National Cable TV Cooperative will have a new name.

“I’m not going to tell you what it is,” Borrelli said, guessing Next TV's next question. “I haven't even told my people what it is yet.”

The name will convey the NCTC's new priorities and focus — a transitional crossroads already traversed by the now-merged SCTE and CableLabs, among other groups serving the cable industry.

In short, what was once a thriving constituency of small, family-owned companies four decades ago when the NCTC was formed has whittled and consolidated into around “700-plus” operators, many of them having forsaken the long-since-very-profitable business activity of bundling TV channels.

Borrelli, a New England native whose last job in a cable industry players uniform was leading Kingston, Jamaica-based Digicel's cable broadband operations, has worked with the NCTC board of directors to come up with some clever initiatives.

Prime example: “The Connectivity Exchange,” which unifies NCTC member companies into singular network platforms, able to pursue big national RFPs.

“Collectively, we represent 40 million digital connections, a third of the country,” Borrelli explained. That, of course, is bigger than either Comcast or Charter Communications. And the beauty of it is, the NCTC can “fill in the holes” for the RFPs the big cable companies go after, too, seizing "complimentary" opportunities.

“If the USPS is looking to get connectivity for 1,000 post offices, we can bid,” Borrelli explained.

NCTC is just getting started with the Connectivity Exchange, which will be amply showcased at the Independent Show. ■

Dialing in to MVNO Deals

Meanwhile, another big Indy Show topic will be MVNO deals, something the org board and constituency have grown increasingly interested in lately as they observe the mobile growth happening at Comcast, Charter and Altice USA.

Negotiating these wholesale wireless network deals has become less and less complicated, Borrelli said, with many of the technical and business hurdles now out of the way.

Video tech is still a big focus for the group, as well — for example, NCTC has been talking to Comcast about licensing Xfinity Flex for its members.

“They could be in Walmart, they could be in Best Buy, they could be wherever,” Borrelli said “But I think we could be very helpful in distribution of that technology.”

“We’ll be ready to go next month,” he added, noting Orlando’s showcase. ‘We’ve hit all our targets.” ■

Sometimes art imitates life a little too closely.

For the hit AMC show The Walking Dead, the lockdowns, social distancing and related protocols associated with the COVID-19 outbreak, which is nearing its one-year anniversary, presented a particular challenge. How do you keep arguably the largest cast and crew in scripted series production safe while at the same time ensuring that new episodes of the still-popular show continue to be produced? For AMC Studios, the production arm of parent AMC Networks and the producer of The Walking Dead, it was a truly collaborative effort. 

All across the television industry, distributors and programmers have walked the fine line between being able to get out their products, satisfy their audiences and customers and meet growing demand, all while keeping their employees safe. For cable operators and networks, that has meant adhering to Centers for Disease Control and Prevention (CDC) protocols and finding new ways to deliver products to consumers. For programmers, it has also meant in some cases finding ways to limit cast sizes and production crew exposures in unique ways. 

The premise of The Walking Dead comes uncomfortably close to an all-too-familiar reality — a global pandemic of questionable origins causes widespread death leading to a zombie apocalypse and forcing the non-zombie survivors to find a safe haven. For the show, which finished its 10th season in 2020 and was headed into its 11th and final season later this year, the dilemma was how to keep the cameras rolling and the 250-person crew — including 22 actors — safe during a real-life pandemic. After some thought, executives, producers, showrunners and writers on the series came up with a unique solution, creating six episodes as an extension of its 10th season that would focus on specific characters and require smaller casts. 

“Creative people are creative,” The Walking Dead executive producer and showrunner Angela Kang said in a Twitter video on making the extended 10th season. “If there is any superpower that we have as people that are making television or movies, is that we are supposed to think of out-of-the-box ways to do things. So I think you’ve really seen people stepping up to figure out how to make these processes possible at a really difficult time for everyone.” 

AMC Networks chief operating officer Ed Carroll said the decision to produce the six extended episodes was made to keep people safe, but it also resulted in some of the best programming in the show’s decade-long run.

“Many of the best episodes of The Walking Dead are the ones that are based on character,” Carroll said in an interview, adding that the show wouldn’t have lasted as long if it relied only on the zombie scare. “You really need to care about the characters. … We were able to do that and get everyone back to work safely, and take a very big show and make the set quite a bit smaller, but I think creatively accomplish some of our best storytelling.”

Character-Driven Episodes 

The first of those six episodes aired on Feb. 28, titled “Home Sweet Home” and focusing on Maggie Rhee, who left the series in season nine and is played by the returning Lauren Cohan. Other episodes are focused on Saviors’ leader Negan (Jeffrey Dean Morgan), Daryl (Norman Reedus) and Father Gabriel (Seth Gilliam). 

COVID-19 protocols were the same on the TWD set as in all other AMC Studios productions — having an on-site epidemiologist; constantly testing and monitoring crew and actors for the virus; thoroughly cleaning before, during and after shooting; practicing social distancing; and essentially keeping people segmented. But in the six new episodes, the writers and producers crafted narratives that gave them the ability to use two different directors and shoot them in a sequence that kept one unit away from another. 

“What you have to do is rethink the entire operation, so your actors are only with the actors they need to be in a scene with and the crew is only coming into direct contact with other crew members that are essential to do their job,” Carroll said. “You’re minimizing the number of people on an active set, and I include network executives in that. We would normally be making set visits for all sorts of reasons. We’re just not doing that. We’re having our interaction with the cast and crew via Zoom or Teams. When you take a big show that is a multifaceted compilation and you reduce it as best you can, you break off small segments of the operation and keep them as discrete as possible.”   

The Walking Dead was unique in that it lent itself to character studies. Other series on the AMC slate won’t likely go the same route.

 “As we’ve all gotten better at the protocols, we think we can go back to a larger canvas of storytelling for season 11 and certainly for our other shows as well,” Carroll said. “Ideally, if you think about years from now, if people are catching up on a show, you wouldn’t want them to be able to say, ‘Oh, those must have been the COVID episodes,’ because they look and feel different.”

AMC Studios is getting back into its production stride, Carroll added. Better Call Saul was expected to start production on its final season in early March, and season 11 of The Walking Dead is in production in Georgia. Prequel Fear the Walking Dead started production earlier near Austin, Texas, although there were some delays because of the frigid weather in that state.

AMC also is more than halfway through shooting the premiere eight-episode season of Kevin Can F**k Himself, and is starting production on the second season of  Walking Dead: World Beyond. Later this month, production starts on 61st Street, a criminal-justice series based in Chicago. Production for many of WE tv’s reality programs has been ongoing, either via Zoom or other means.  

Other Production Restarts

Many other content companies have resumed production in one form or another, including Fox Entertainment, which said it is adjusting and adapting for the “new normal” when it returns, with all scripted series — 9-1-1, 9-1-1 Lone Star, Prodigal Son, The Resident and Last Man Standing — in production. 

In addition, all of the studio’s pilots that were ordered last year have been in production and are scheduled to deliver in mid-to-late March, including comedy This Country from Jenny Bicks and Paul Feig, based on the BAFTA-winning BBC format, for 2021-22. Fox Entertainment is also creating new pathways for projects, including opening writers’ rooms for two dramas with an eye toward series orders: Our Kind of People, a co-production with 20th Television, based on the acclaimed novel, from executive producers Lee Daniels and Karin Gist; and an untitled music drama. 

Fox Entertainment added that its animation efforts, including its in-house studio Bento Box, which produced The Great North, Bob’s Burgers, Duncanville and upcoming series Housebroken, has been largely unaffected by the pandemic. Bento Box has added new crew members since the pandemic began and also will produce an untitled Dan Harmon animated comedy scheduled to premiere in 2022. 

It was about a year ago, March 11, 2020, that the World Health Organization called the COVID-19 outbreak a pandemic, with the first statewide stay-at-home orders issued shortly thereafter. To date, the pandemic has claimed more than 2.5 million lives globally (including more than 500,000 in the U.S.), forced millions of people to work or go to school from their homes and impacted nearly every aspect of everyday life. While hopes have been heightened by the slow but increasingly steady rollout of COVID-19 vaccines and the deceleration of cases in the U.S. and elsewhere, for the TV industry it is anything but business as usual.

For starters, the pandemic is far from over, even as there appears to be some light at the end of the tunnel. While the number of daily cases was down in the U.S. in January and early February, according to the Center for Disease Control, it began to tick up toward the end of the month. According to reports, there were 77,804 new COVID-19 cases in the U.S. as of Feb. 25, up from 55,195 as of Feb. 21. That number started to trend down again — there were 50,925 cases on Feb. 28, down 26% in the past two weeks, with 1,129 new deaths, down 21%. New strains of the virus were found in Houston and other parts of the country, but as vaccinations increase and funding for more widespread deployment is baked into the $1.9 trillion federal COVID-19 relief bill currently before the Senate, optimism that cases will continue their steady decline is high. 

Stay-at-home orders, implemented to halt the spread of the virus, also helped drive cable broadband subscriber growth to record highs, as the top three publicly traded cable operators added more than 4 million high-speed internet customers in 2020. While that level of growth isn’t expected this year, many operators are looking how to address the market as more consumers return to the office. 

At Mediacom Communications, the focus has been on making higher speeds available to its customers. Broadband speeds of 1 gigabit per second are now accessible in all of its markets, and the payoff has been strong.

The need for speed has been evident at the company. Mediacom reported a threefold increase in 1 Gbps customers year-over-year, and said 14.6% of its broadband subscribers take the 1 Gbps tier. That compares to about an 8.5% take rate for 1 Gbps service on average nationwide, according to OpenVault Broadband Insights.  

While most operators aren’t expecting the same broadband growth this year, some are looking closely at how their customers’ work habits could change. Some anticipate a hybrid approach between office and home will become more of the norm. 

“As things start to open up, we see customers that will still work from home permanently or on a hybrid basis and will continue to want to have a better connection that can give them that comfort that they can get their work done,”  Mediacom senior VP customer service and financial operations Tapan Dandnaik said.

To that extent, Mediacom has raised speeds for some levels of service and boosted usage allowances. The current usage allowance levels are 1, 2 and 6 Terabytes for its 100 megabits per second, 300 Mbps and 1 Gbps tiers. 

“We want customers to get the best speeds and the best service and make sure what we have for the customers is the appropriate service at the appropriate price point, so there is value in what we’re offering,” Dandnaik said. 

Charter Communications added more than 2 million broadband customers in 2020. While the No. 2 U.S. cable operator did see some customers migrate to higher speeds, chief operating officer John Bickham said that for the most part, subscribers found they could do a lot with less. Charter raised minimum speeds in most of its markets to 200 Mbps last year, and offers 400 Mbps and 1 Gbps service as well. Bickham said there are a few markets where 100 Mbps is still the minimum.

“We saw some upgrading,” Bickham said. “But fundamentally, if you have a 100 Mbps level of service in your home and it’s solid, there is hardly anything you can do that requires more speed. ... If people want a high level of speed, we’ll sell it to them.”  

Cable operators across the board moved to incentivize workers that had to remain in the field, either through bonuses or other means. Charter pledged to raise the minimum wage it paid hourly workers to $20 per hour by 2022, and said it is well on the way toward that goal. 

Charter also has teamed up with healthcare company Matrix Medical to vaccinate employees who want it on-site. According to executive VP, human resources Paul Marchand, the plan is to establish 50 to 60 megasites at Charter facilities across the country, working with local and state health departments to secure dosages and vaccinate employees that request it. 

Marchand added the company realizes that employees do and will have alternatives to get the vaccine — some are already getting it if they qualify — and that is OK, too. But he added that vaccines are expected to become more widely available in the coming weeks and Charter wanted to be prepared. 

“I can envision in the next four to six weeks on-site, maybe starting in one or two locations and building over time, we will be able to provide shots to our employees,” Marchand said. 

The pandemic accelerated cable’s long-desired plans to move toward self-installation. Comcast claims that more than two-thirds of its total installations are done by the customer. At Charter, self-installs are at about 80%. That pace is likely to continue.

“Don’t undersell self-installation,” MoffettNathanson principal and senior analyst Craig Moffett said. “It’s here to stay, and the MSOs will only get better and better at it.”

Remote Control

While all the emphasis has been on the general public working from home, most cable employees had to perform their tasks remotely and have performed amazingly well under the circumstances. For some workers — especially customer-service representatives — remote work could be permanent. 

“Work-at-home CSRs are a game-changer, particularly if we go back to having a tight labor market like we had pre-pandemic,” Moffett said.  “Among the biggest costs in running call centers are recruiting and training new employees, and one of the biggest reasons for turnover in call centers is lack of childcare. The ability to have CSRs working from home is transformational.”   

At Mediacom Communications, about 95% of CSRs work remotely, Dandnaik said. But he added that anything could change. 

“The thing is, we’re in March and if you asked me the same question in June, I hope to be able to say we have some kind of rotation,” Dandnaik said. “I think things are evolving. At some point in the future, I don’t know when, we will come up with the ideal hybrid approach to make sure we are adjusting to the new normal.”

Mediacom will be flexible with its employees and take their personal situations into consideration, he added. 

“We operate in 22 markets,” Dandnaik said. Where our call centers are, we have 10 or 12 locations. Every market is different and every situation is local.”  

Bickham said he expects the return to normalcy will most likely happen at a gradual pace.

“I think it goes away very slowly in terms of the impact on how people behave and where they work and how they go to school,” Bickham said. “It happens over an extended period of time. It’s not going to be like it was a year ago, when everyone went home and all of a sudden you had this very dramatic change.”  

Comcast chairman and CEO Brian Roberts, in a January conference call with analysts to discuss fourth-quarter results, said moving customer-care workers from offices to work from their homes has worked so well, the company is “leaning towards embracing this model permanently.” In 2020, agent-handled calls were reduced by more than 16 million, Roberts said. 

“We are working hard with our communications and marketing efforts to enhance awareness of all we have to offer, which enables us to take cost out of the business while delivering a better experience for our customers,” Roberts continued. 

More than half of Charter’s CSRs are working remotely, but the hope is that once the pandemic subsidies, more will be able to return to the office. 

Although Charter came under some criticism for its approach during the early days of the pandemic, Marchand said the priority has always been to adhere to CDC standards, as well as the varying standards by state. And while Charter is complying with all federal and state requirements, once the pandemic is over, it would like to get as back to normal as possible. 

Weighing an Office Return

Charter has in some cases started a scheduled approach, where some workers would work one week in the office, some two weeks remotely and so on. While there will always be exceptions, he said, overall the company would like to get back to a place where most workers are in the office.  

“In the end, we think work is best done when we are together in person,” Marchand said. “We think collaborating, innovating, leading training, on-boarding all is best done, is most efficient, effective and rewarding and frankly, the best employee experience, when we’re all together. That doesn’t mean some situations don’t necessitate some people working remotely, and that in the future we may continue to have that.” 

AMC’s Carroll said he too misses the days when most of the team was at the office. While there have been some benefits to working remotely — Zoom meetings, he said, can sometimes run more efficiently than in-person ones — he said personal interaction is important on both sides of the business.

“On the client side, we do miss the client contact,” Carroll said. “We are doing it remotely, and that seems to be OK, but
you don’t find out as much about what’s happening with your clients on a 30-minute Zoom call as you do over lunch.”   

While some programmers and operators may crave a return to in-person meetings, the pandemic may have dealt the final blow to large conventions. 

The shift from huge trade shows to smaller, regional and local confabs had already been happening years before anyone had even heard of COVID-19, primarily due to massive industry consolidation. In 2017, NCTA–The Internet and Cable Television Association, ended its annual cable show, INTX, after 65 years. In a blog post at the time about the decision, NCTA president and CEO Michael Powell wrote: “Large trade show floors, dotted with exhibit booths and stilted schedules, have become an anachronism.”

But Moffett said the ultimate demise of the large cable convention shouldn’t be blamed on COVID. “There’s no need for a big centralized show if the alternative is making one visit to Philly, one to Stamford, one to Atlanta and one to Denver, and then calling it a day,” he said.

Other more regional shows managed to survive, even through the pandemic. ACA Connects and the National Cable Television Cooperative held their annual get-together, The Independent Show Reimagined, virtually Sept. 29-Oct. 1, 2020, and said the event had a record 848 registered participants. Plans are to hold a hybrid event July 11-14 in Minneapolis. 

But larger shows like CES, which was held virtually Jan. 11-14, drawing about 81,000 attendees (down from 170,000 in 2020) — have come under more intense scrutiny. In 2022, the CES event is expected to be a hybrid live and online event.

The Consumer Technology Association, which produces CES, declined comment. 

It may be too early to predict the long-term effect on events, NCTA senior VP of strategic communications Brian Dietz said. He noted that smaller or more-focused conferences like the Society of Cable Telecommunications Engineers-International Society of Broadband Experts (SCTE-ISBE) Cable-Tec Expo, the Women in Cable Telecommunications (WICT) Leadership Conference and National Association for Multi-Ethnicity in Communications (NAMIC) conference were still very strong.

Virtual Events Draw Crowds

Attendance at the virtual SCTE-ISBE Cable-Tec Expo 2020 broke records, according to the group. WICT said registered attendance at its virtual 2020 Leadership conference was 860, besting the previous mark set in 2018 of 818 attendees. NAMIC said attendance for its virtual 34th Annual Conference was up 40% over the prior year. 

The SCTE plans to hold its next Cable-Tec Expo in Atlanta in October, the same month as the WICT Leadership Conference is scheduled for New York. The 35th annual NAMIC Conference is scheduled for Oct. 5-6 in New York.

The consumer-focused San Diego Comic-Con, used by TV programmers as a showcase for their newest offerings, also postponed the live event set for July 23-25 to 2022. Organizers said they will hold a virtual event this year, as well as a potential smaller live event in November.

But the jury is still out for larger conferences.

“I think it will be more interesting to see what happens with conferences like CES in which 150,000-plus gather in tight quarters for a week,” Dietz said. “That concept certainly seems to be more at risk because we are all now so much more educated about public health safety and how germs can spread rapidly.”

Whether big changes come and stick is about as uncertain as predicting when the pandemic will eventually peter out. But it is obvious that after a year (and counting) of relative isolation and disruption to the normal way of doing business, something has to give. Whatever it is, hopefully it will lead to a year ahead of living a bit less dangerously. 

CommScope has added to its Distributed Access Architecture (DAA) portfolio, announcing the debut of the RD1322 2x2 Remote PHY module.

The new device is expected to begin service provider testing later this year. It installs directly into CommScope’s base NC4- and OM4-series fiber nodes.

Cable access equipment sales have been sluggish of late—they were down 38% in the first quarter, according to Dell’Oro Group—as operators mull how to move forward with DAA.

But CommScope, which closed on its $7.4 billion purchase of Arris earlier this year, believes sales will pick up in the second half of 2019, and it’s trying to match that market.

“Cable MSOs are beginning to wait for remote PHY architecture to mature, which is impacting spending along with the general reduction in capital spend,” CommScope CEO Eddie Edwards said during the company's Q1 earnings call. “With demand for bandwidth continuing to grow at an exponential rate. We expect this trend to reverse and for investment in network capacity to increase throughout the year.

CommScope’s DAA portfolio includes its RPD, Remote PON, R-PHY Shelf, Video Unified Edge (VUE), ICX Switch family, and hybrid E6000 I-CCAP/CCAP Core products. It also features a full suite of virtualized products, including the E6000 Virtual Core (vCore) and vManager framework of tools, including industry-leading monitoring, management, and traffic engineering functions.

“As global operators continue to invest in tomorrow’s 10G networks, the outside plant will represent a primary budget focus,” said Kevin Keefe, senior VP and segment leader of CommScope’s network and cloud division. “Our RD1322 2x2 RPD is the answer for operators looking to maximize their existing infrastructure to deliver tomorrow’s networks and services as quickly as possible.”

Added said Jeff Heynen, research director, broadband access and home networking, Dell’Oro Group: “CommScope has one of the largest footprints of optical nodes among major cable operators worldwide. As cable operators continue to distribute their access networks and increase both upstream and downstream bandwidth, the RD1322 2x2 RPD is an option, as operators choose from a variety of DAAs and pathways as they bridge to tomorrow’s networks.” 

After revolutionizing the linear pay TV space decades ago, Discovery Channel founder John Hendricks is finding inspiration in the Golden Age of Television, when shows were regularly sponsored by big conglomerates like Texaco, to help support the next stage in TV’s development: streaming video.

Hendricks’s latest venture — streaming video service CuriosityStream — is lining up major sponsors to back its lineup of fact-based programming, much the way television shows did in the early days of the medium, sort of a new twist on the old Texaco Star Theater.

“The big news for us is this other model, bringing sponsors who are desperate to get at the missing viewers who are abandoning linear,” Hendricks said. “When [consumers] are watching Netflix or Amazon Prime, they’re outside the advertising universe [and advertisers] can’t reach them. What we’ve tried to do is develop a way that the advertisers can work through us to get to those missing viewers, who are some of the most valuable viewers on television.”

Reaching Young Non-Linear Viewers

Subscription video-on-demand services are gaining with consumers because most young, affluent viewers just don’t watch linear TV any more.

“If you’re a [car maker], you’ve got to get to them,” Hendricks, who founded Discovery Channel in 1982, said. “And your spots just aren’t reaching them on cable.”

CuriosityStream, advised by former CBS and Discovery Communications ad-sales chief Joe Abbruzzese, is securing six major sponsors for its factual documentary/science/nature/innovation programming service. Sprint is first out of the blocks with Sprint Theater, which debuted Aug. 2.

Other advertisers in the automotive, banking and financial services, insurance, energy, aerospace and pharmaceuticals industries are expected to follow before the end of the year.

Each show will be preceded by a “non-skippable” 15-second pre-roll featuring sponsor messages, but the core content will be without commercial interruption.

“What we’ve been working hard on for the last six to eight months is, how would you integrate sponsored revenue in the world of streaming on demand, where the consumer doesn’t want to watch commercials?” Hendricks said in an interview.

“Joe [Abbruzzese] and I made the rounds, at the top levels of agencies, and also going to clients. They’re all just ready for it, because they know they missed the wagon on Netflix. You can’t buy a sponsorship on Netflix.”

With about 120 million subscribers worldwide and 56 million in the U.S., Netflix has drawn the attention of the entire pay TV business. Hendricks has done his homework, too. In a new white paper titled “Undeniable and Unstoppable,” Hendricks estimates Netflix could have as many as 600 million subscribers worldwide in the next 20 years. Globally, he estimates that 1 billion households capable of streaming video will triple to 3 billion by 2038. Global SVOD households will balloon from 250 million in 2018 to 1.5 billion by 2038. “It’s like the old days of cable,” Hendricks told Multichannel News.

“The pipe dream, of course, is that at some point, which I don’t think will happen, is that Netflix may say why can’t there be a presenting sponsor at the next season of The Crown, and AT&T writes a huge check,” Hendricks said, adding that his plan would work best with high-quality, scripted and unscripted fare. Sponsors, he said, are eager to associate with high-quality fact-based programming.

CuriosityStream is now offering a free version on the web — Curiosity Showcase — that Hendricks hopes will whet viewers’ appetites, with 18 program titles and sponsored content.

CuriosityStream plans an ad blitz to promote the service. It is using the same ad agency as its exclusive sponsors to get the word out through broadcast, cable and digital media.

This new relationship also will allow Hendricks and CuriosityStream to lower consumer prices. The SVOD service is currently available for $5.99 per month but Hendricks said the plan is to reduce the cost to the consumer to $19.99 for a yearly subscription or $2.99 per month.

Hendricks’s streaming service is already available as an SVOD product on several traditional pay TV offerings from Comcast, Cox Communications and Dish Network, and less traditional outlets like Sling TV, StarHub in Singapore, Amazon’s Prime Video Channels, Sprint Mobile TV, Apple TV, Samsung, Roku, LG, Sony, Vizio, VRV, YouTube TV and others. The service said more than 9 million unique visitors have sampled its online platform and in excess of 900,000 global consumers are now paying subscribers either directly or through bundled packages offered by distributors.

That’s short of the 2 million to 3 million paying subscribers Hendricks had hoped for when he launched CuriosityStream in 2015. But the new sponsorship plan is two-pronged: in addition to representing a steady ad revenue stream, sponsors are also expected to promote the service as well.

Broadband Is Key for Video Business’s Future

Goals: Innovation, Reliability, Connectivity

Byron Allen: Programmers ‘Cannot Be Big Enough’

Johnson Stresses Content and New Distribution Model

T-Mobile’s Binder: 5G a ‘Game-Changer’

ANAHEIM, Calif, — With broadband speeds doubling every two years, operators need to focus on innovation, network reliability and connectivity to drive results, experts said at The Independent Show.

CableLabs chief operating officer Chris Lammers noted that, according to Nielsen’s Law, high-end users’ bandwidth needs will grow by 50% every two years. With that in mind, Lammers said ultimate speeds will rise from 1 Gigabit per second in 2016-17 to 10 Gbps by 2023 and 100 Gbps by 2029.

Operators need to ensure their networks are up to snuff to deliver higher speeds and to know who their competition really is, Shentel senior vice president of cable Tom Whitaker said. While 5G wireless is getting a lot of press, in many cases the technology isn’t economically feasible for small communities.

Whitaker pointed to a Verizon Communications 5G deployment in Houston that cost the telco about $15.50 per covered point of presence (POP). In a smaller market, such as Lexington, Va., 5G could cost $55 per covered POP.

“Maybe 4G is a better option, a better long-term solution for many wireless networks in most of the small towns where we do business,” Whitaker said. “So, I wouldn’t get all jacked up about 5G unless it’s in a bigger town.”

Deploying fiber also has a halo effect on the entire company, said TDS Telecom director of product management and development Scott Schultz. While TDS does better in areas where it has deployed fiber, the halo the network gets from offering the service extends to areas it hasn’t upgraded yet. Take rates for copper-based services increased about 9% in neighborhoods that haven’t gotten the full fiber treatment yet, Schultz said.

“Even when you don’t have fiber to add, it works,” Schultz said.

ANAHEIM, Calif. — Sports teams and networks could find themselves in a spot in the next five years, as the windfall in rights fees expected as online players like Amazon and Facebook enter the fray could force distributors to make tough decisions on which channels to keep, according to Sanford Bernstein media analyst Todd Juenger.

Juenger, making a presentation at The Independent Show, said that for most distributors, the rising cost of sports has been a conundrum: live games drive TV ratings, but a shrinking number of consumers consider sports channels to be must-have.

Some 40% to 60% of viewers don’t care about sports, Juenger said, and that indifference is global. Even in soccer-mad England, where the English Premier League is available a la carte, only about half of video subscribers pay for it, according to Juenger. In the U.S., the Super Bowl may draw an audience of 150 million people, but that still means half of the country isn’t watching.

“Do you think they want to pay you $100 a month for a video service that is mostly based on sports when they can have Netflix for $10 and Amazon for free?” Juenger asked. “I say no.”

TV Sports Costs Are Rising Fast

That is becoming increasingly evident in the subscriber erosion over the past seven years at the premier sports channel, ESPN. According to Juenger, ESPN has lost about 13 million subscribers since 2011. At the same time, overall sports programming costs have increased by $10 billion.

The trends are not good among younger viewers. According to millennial market researcher Ypulse, the percentage of 13-to-36-year-olds in the U.S. who say they watch sports live on TV is down to 63%, from 86% two years ago.

“They [ESPN] are asking you guys to pay 7% escalators each year,” Juenger said. “You’ve still got 87 million households paying for sports, but only 60 million want it. I don’t think you can continue to get money from people for sports they don’t want to watch.”

Some analysts believe the advent of legal sports betting — approved by the U.S. Supreme Court in May — could help boost ratings and draw in viewers who may have not watched live games in the past. Others aren’t so sure.

Pivotal Research Group media analyst Brian Wieser said in a recent client note that live sports viewership is largely driven by big events. When those tentpoles are taken out of the mix, viewership shows a steep decline.

“In contrast to news, sports has struggled generally, although the genre still remains an important source of viewing of traditional TV,” Wieser wrote. “In aggregate, it represents an outsized source of costs, revenues and strategic leverage between networks and distributors.”

Adding to the pressure is that programming margins are pretty anemic already, and could drop to zero in the next five years. According to Juenger, Disney’s deals for NFL Monday Night Football and Major League Baseball expire in 2021, while its National Basketball Association pact ends in 2024-25. Fox’s MLB deal also ends in 2021, and its NFL pact expires in 2022.

“Does anybody think that Amazon, Facebook and Google have no interest in this?” Juenger asked. “In the next round, they are going to be knocking at the door, and they are going to be bidding more, not less. So your network partners are going to be faced with this decision, ‘Do I try to outbid Mark Zuckerberg and try to pass it on to you guys, or do I walk away from sports?’ ”

Operators have three choices, Juenger said: Keep every channel, pass along the increases to consumers and continue to lose subscribers; keep paying high fees, don’t raise prices and make up the difference on broadband (as large operators like Comcast are doing); or make a tough decision and start dropping networks.

“You can’t keep paying everybody more money on the network side, to resell a multichannel video product that you will be reselling at a loss,” he said. “So the calculus you have to do is, ‘Who am I paying that my consumers care about the least?’”

Juenger added that it would be hard to drop Disney, which has ESPN but also Disney Channel, ABC and Freeform, and after its mega-deal with 21st Century Fox closes, will include FX, FXX and National Geographic. But other segments are experiencing similar declines to sports, and that may offer relief for some operators.

Cut Back on Kids’ Fare?

Viewership in the children’s segment was down 28% in the last quarter — its worst in history — after already having fallen by half in the past six years, Juenger said. The only business segment that has had a similar drop in the past six years is national retailer Sears.

“Why are MVPDs continuing to force every household to pay for five or six kids’ networks, when the data says only 40% of households have kids at all, and among the 40% that have kids, they aren’t watching?” Juenger continued. “Because of the Internet being able to distribute video at scale now, consumers have alternatives.”

That could play into the trend, especially among smaller cable operators, to offer broadband-centric packages that emphasize access to SVOD offerings like Netflix and Hulu rather than traditional content bundles, he added. “Maybe there is a better solution for you [consumers] than a $90 cable package with 150 networks of which you only want three,” Juenger said.

Cable providers, programmers and vendors gathered at the Disneyland Hotel last week for The Independent Show, the annual convention co-produced by the American Cable Association and the National Cable Television Cooperative. Conversational themes at the Anaheim, Calif., gathering included responding to new video consumption habits and meeting broadband demand.

ANAHEIM, Calif. — Video isn’t quite dead yet, it’s just taking a different train, panelists at The Independent Show testified. Small operators are finding ways to pair content offerings with broadband to satisfy changing consumer habits.

At the conference’s opening session, moderated by Multichannel News managing director of content Mark Robichaux, executives at top midsized and small operators picked apart the business, which has been dominated over the past few years by broadband and commercial services. The panel insisted that despite rising programming costs and changing viewing habits, video is still an important arrow in cable’s quiver.

Cable Has Faced Threats Before

Video is taking a different form and, instead of traditional lineups packed with linear networks, smaller operators are offering the product through broadband apps and OTT services.

Schurz Communications vice president of cable Brian Lynch agreed that the video business has evolved, but added the industry has seen this before.

“The video challenge is a real one, but we’ve survived DirecTV and Dish [Network] in 1993 to 1995,” Lynch said. “The outcome of that was, we got better and stronger. I think the same thing is going to happen with the onset of OTT. It’s a clear risk; we have time to solve this, but the main focus has to remain high-speed data.”

Fidelity Communications president John Colbert said most of Fidelity’s new customers are single- play broadband. In the last 36 months Fidelity grew broadband by 36,000 customers, half of whom were single-play broadband subscribers. He added that making it easier for customers to navigate between different OTT services has helped grow that segment.

“The ease of that transition supports the fundamental growth of high-speed data,” Colbert said. “Video consumption is going up.”

At Cable One, one of the first cable operators to move broadband to the front seat years ago, chief operating officer Michael Bowker said ease of use is essential for success.

“Our goal is, we don’t view [video] as friend or foe,” Bowker said. “We want to enable our customers to have access to consume the video product however they want. If they’re doing that over my [high-speed data] pipes, then I win in that scenario.”

Broadband is fueling most of the growth of small cable and it doesn’t show any signs of letting up soon. Colbert said in some recently acquired markets, penetration rates are in the high 30% range.

“I don’t see why we can’t have 70% penetration” in those markets, Colbert said.

Sen. Deb Fischer (R-Neb.) will address the Independent Show in Orlando July 25.

Fischer, who is a member of the Senate Commerce Committee, will be interviewed by American Cable Association president Matt Polka.

"ACA is very delighted that Sen. Fischer will be on hand to discuss the key issues that she and her constituents across Nebraska care so much about," said Polka. "Her leadership on providing 21st Century telecommunications services in the hard-to-reach spaces of the State and country mirrors so many of ACA's perspectives."

For example, Fischer was among a group of senators who recently asked FCC Chairman Tom Wheeler to further study the impact of its set-top box proposal on smaller pay-TV providers before proceeding to vote on a final order.

Also on the agenda are remarks from FCC Commissioner and former chair Mignon Clyburn.

The show, which focuses on issues facing independent cable operators, is being held July 24-27 at Walt Disney World's Swan and Dolphin Resort.

Kansas City-- Finding a small cable operator complaining about high programming costs at the Independent Show is easier than finding a barbeque joint in this city.

But a group of analysts tried to persuade the cable faithful here that programmers shouldn’t be the focus of their fear and ire…Silicon Valley should be. 

The panel, “Wall Street Update for Main Street MSOs,” was featured at The Independent Show, the annual confab for small and mid-sized cable operators hosted by the American Cable Association and the National Cable Television Cooperative

Indeed, far from carping about increased programming costs, cable operators should feel good about their business. New digital entrants destroyed the newspaper, music and Yellow Pages business, but the cable industry has largely avoided the mass migration of subscribers and revenue to new digital entrants. 

“This is the only industry to date that has been able to fight the onslaught of digital platforms, and so far no leakage”  said Laura Martin (pictured), a managing director at Needham & Co. -- a testament to the collaborative relationship between cable operators and programmers. "If that fractures, said Martin, "seventy percent of gross revenue will disappear.”

Overall viewing of TV content on more devices in the home is up, Martin said, which should provide more cover on price increases. In round numbers, cable’s $75 billion of subscription revenue, in addition to $75 billion in advertising revenue, is up roughly 20% over the past five years.  Moreover, “all those consumers that are whining to you that they can’t possibly pay more money are paying another $3 billion to Netflix and another $1 billion in subscription fees.” 

“You’ve got a better mousetrap – it’s just a question of execution,” said Naveen Nataraj, a senior managing director at Evercore Partners. 

Martin suggested the operators in the room think more holistically about their business. True, video margins are getting squeezed, compared to broadband margins, but video content, in not so many years, will be moving to toward a more interactive, real-time experience. Cable operators have a strategic advantage with the double bundle – and far better discovery than online sites such as YouTube.

“You should think of your video and broadband product as integrated” because of interactive possibilities around the corner…”only you can do those fast speeds two way.”  “Keep the bundle… the bigger the bundle the better,” Martin said.

“These Silicon Valley companies are much more threatening enemies to you than your content companies are,” said Martin. Google, for example, has 50,000 employees and $55 billion in revenue last year with $20 billion in free cash flow. “They lose money on Google Fiber and they don’t care.”  Their intent is to disrupt and they have “plenty of money to play with” 

All disruption starts at the low end where there’s no economics and in time it moves up into the profit pool, Martin said. Google Fiber is “losing a fortune”  trying to get cable to invest in higher speeds.  “They want free access to fast speeds so they can innovate and deliver things over your pipes for free… they’re coming after you and they have big teeth…”

As independent operators settle in Kansas City this week for their annual convention, they’ve got more on their minds than just barbecue and blues. In the group’s hometown this year, National Cable Television Cooperative and American Cable Association members have gathered to hash out the myriad issues facing small, midsized and independent cable operators: the skyrocketing cost of programming, Internet-protocol delivery of video and data, retransmission consent and TV Everywhere.  Multichannel News editor in chief Mark Robichaux caught up with ACA president and CEO Matt Polka to hear what’s on his legislative agenda for members.

MCN: As you head into Kansas City, what would you say are the three biggest concerns for your membership?

Matt Polka: From a business perspective, it is really trying to embrace all things (IP) and all things broadband. With the changing nature of our industry, it's rapidly moving into the Internet of everything, and that makes it incumbent upon our members in their unique markets to provide the same kind of services that a consumer would expect in New York or Los Angeles or Chicago.

 So we're going to be doing a lot at the show focused on [Internet protocol] and broadband for everything, basically, and encouraging our members to be very active in embracing that future. So that's No. 1.

No. 2, on a daily policy basis, it's keep up the fight. After many, many years and a lot of battles in Washington, we are succeeding in moving forward in seeing Congress and the [Federal Communications Commission] act on outdated rules and regulations, primarily broadcast carriage, retransmission, consent regulations. The FCC's actions this year in March on coordinated retransmission-consent negotiations prohibit that collusion by broadcasters; the House passed its version of a satellite extension bill last week that included aspects of retransmission consent reform that set the stage for a larger Communications Act, when these outdated regulations can be eliminated.

The third thing is to begin to encourage, from my perspective at least, Washington to act now, while it can, on important broadband policy issues before they get out of hand and become unmanageable. My example here is, as it relates to the FCC's open Internet proceeding and other consideration by Congress, [is that] while the FCC and Congress talk about regulating Internet service providers and prohibiting any discrimination of blocking by ISPs, at the same time that the blocking and discrimination that's occurring today is happening by content providers — not cable operators, not ISPs.

So whether it's the CBS Corp. blocking Time Warner Cable broadband customer’s access to CBS online programming or Viacom blocking access to some 50, 60 of our member companies and their broadband subscribers access to Viacom online programming because these companies, our members, didn't agree to renew the big Viacom programming bundle. That’s got to stop. This is content that Viacom freely makes available over the Internet to anybody. But they single out and target our members' broadband customers, and deny them access to what they make freely available over the Internet, just because our members didn't want to agree to pay for the big bundle any longer.

MCN:  You recently told the FCC that these new rules wouldn't protect openness unless they extend to content providers, right?

MP:  That's exactly right. And we said any examination of open Internet rules, for the simple sake of fairness, has to include a consideration and regulations and restrictions on content provider's actions to block or discriminate because frankly that's where we see it.

And it's not just Viacom. What is to prevent others, a Google, a Netflix, an Amazon, from doing the same thing? Companies like Google say we fear what Comcast could do to us. Well, we fear what Google could do to us. What if Google came to our  members and said that if you want all of your broadband subscribers to be able to use Google as their homepage, pay us $2 a subscriber per month before we give you access to it — what's to prevent that? The answer is nothing.

So if there is going to be an examination of what the rules of the Internet road should be, it must include similar restrictions on content providers.

MCN: What about net neutrality rules — where do you stand on that?

MP: No Title II. The fact is that because of the FCC's previous policies on Internet deployment and regulation of the Internet under chairman [Michael] Powell in particular, and then under chairman [Julius] Genachowski, the Internet principles basically allowed a relatively light touch of regulation to encourage further broadband deployment without a heavy-handed regulation.

And that becomes increasingly important for small companies simply because we have always complained about — rightfully so — the unique and disproportionate heavy-handed impact of regulation on smaller providers, compared to larger providers. We, as smaller providers, have been able to significantly and successfully deploy broadband in some of the most remote markets in the country because of Congressional and FCC policies to encourage that.

MCN: You recently applauded a Mediacom Communications memo to the FCC that said the market is dominated by these giant programmers, broadcast and cable,who are engaged in a “coercive practice” of bundling and “unjustified volume discounting.”

MP:  Mediacom's letter was right on point. In Washington, everything's a fight, so it takes time. But what will bear out in the instance of what's outlined in that letter are just the facts of what's happening in the marketplace.

Consumers don't want the big bundle, that's why they're cutting their cord or shaving their cord for more Netflix, Amazon, Hulu, etc. It's a way for them to express their desire for choice, which they can't get on cable, and which we as cable providers, at least independent cable providers, would like to give them.

But consumers are rejecting the big bundle of Viacom and Disney and Fox and Comcast/NBCU because all they get is a big bundle of ever-increasing programming that they have to pay more for and generally don't watch. We support that effort toward reform in that area and we'll keep fighting to try and give our members the ability to give our customers more choice.

MCN: Rupert Murdoch recently made an offer for Time Warner Inc. What do you think the impact of a merged Time Warner Inc. and 21st Century Fox will be in the current marketplace?

MP: Once we saw Comcast announce its acquisition of Time Warner [Cable], which was quickly followed up by AT&T and DirecTV, we predicted that it wouldn't be long until we see the same kind of thing on the content side. And that's going to happen.

So the outcome of that will not be good for consumers. I mean its great for these big companies that have leverage that can negotiate the prices that they want to manage their own economics. But at the end of the day, somebody's got to pay that, and when a Comcast-[TWC] or an AT&T-DirecTV can get a lot and better volume discounted price, that difference in economics has to be made up somewhere.

So our members are going to feel the brunt of that, and our consumers are going to feel the brunt of that, not to mention just the further lack of choice and control consumers will have over what will be an ever increasing bundle now controlled by even fewer hands.

That's why you see, in this most recent Viacom renewal for our members, 50, 60 companies of our members said, “No, we don't want it. We're not going to renew. We're going to put on replacement programming. We don't want it.” That's why you see that happening and you'll see that happening more often.

And No. 2, you'll see operators basically say, “Hey look, cable programmer, you want to charge whatever you want to charge? We're simply going to tell our subscribers that we're just simply passing through the costs every time, that if they have any complaints, here's your number.” They can call you or they can call the FCC, or their congressman and senator.

MCN:  Sinclair Broadcasting has been on your radar this year with the Buckeye CableSystem retransmission fight. Will these continue?

MP: The broadcasters want to sell themselves like a cable channel, right? But we have no choice to get comparative or lower-cost programming either from another lower-cost station or even to say no if we don't want to pay for it, because the law says we have to carry it.

I think if the broadcasters want to be bought and sold like a cable channel, then all of the protection, the monopoly protection that they have that gives them an exclusive right in their market and the ability to keep out any competition, as well as the ability to mandate that we carry them, all of that has to go out the window.

Retransmission consent is not an issue where our members are not willing to pay for a valuable service if delivered but it's about more of a free marketplace for those services and that doesn't exist today. The only reason why a Sinclair can hold Buckeye and its customers hostage for six months is because of these outdated regulations where Sinclair could care less about the customer. All they care is about the bottom line.

And all I hear from the broadcasters about my free TV is garbage because broadcasters do not want consumers to receive broadcast television free over the air. They don't want that. If that happened, where consumers all said we're going to get an antenna, their business would die. Their business is based on extracting fees from cable operators, blaming cable operators and then saying, “Hey we're the free local TV station.”

MCN:  Are you encouraged by the latest movements on the Satellite Television Extension and Reauthorization Act?

MP:  It’s a huge step forward for the House to pass a bill that contains aspects of retransmission-consent reform. People said it would never be done. The broadcasters said it will never be done. They have used their smear tactics, their mud-slinging, blaming cable operators for taking away free TV. It’s just not true.

And frankly, despite the efforts of the [National Association of Broadcasters] and TVfreedom.org, now the focus moves to the Senate. The Senate Commerce Committee is moving forward on a bill that they have been working on on a bipartisan basis.

The time has come for members of Congress and consumers all across the country to say, “We are done with this type of outdated monopoly regulation and we want choice, we want true freedom where we're not forced to carry channels and we can better determine what we want to see without broadcasters telling us what we have to watch.”

MCN: You've got fire in the belly.

MP: Absolutely, we're ready to roll. We are as fired up as ever.

The National Cable Television Cooperative, the buying group representing more than 950 mostly small- and medium-sized operators across the country, unveiled a new logo at its annual members meeting in Kansas City Monday.

According to a statement from the NCTC, the red, white and blue logo encompasses the monogram  “with a circle of cooperation leading to a representation of a consumer broadband connection.”

“The new brand and logo better demonstrate NCTC’s commitment to bridge relationships and the economics of a collective group responsible for delivering on the promise to connect consumers with the world of digital entertainment and information”, said NCTC president and CEO Rich Fickle in a statement.

The new brand will be integrated into all elements of NCTC’s operational and promotional structures and processes over the remainder of 2014.

NCTC, which is celebrating its 30th anniversary this year, was formed in 1984 as a way for small operators to jointly buy programming and equipment. Many of its members from around the country are in Kansas City for The Independent Show between July 27 and July 30.