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Cable Chiefs: The Sky is Not Falling

A group of top cable network executives assembled in Los Angeles Wednesday exuded optimism in the face of the recession.

“I go to bed every night feeling like we’re going to figure it out,” says Doug Herzog, president of MTV Network Entertainment Group and a panelist at The Hollywood Radio and Television Society’s “Cable Chiefs Newsmaker Luncheon” at the Hyatt Regency Century Plaza Hotel.

Even as the economy continues to careen and technology and consumer habits change in rapid-fire style, the panelists say a confluence of factors are keeping cable networks in one of the best positions in the TV business. Cable’s dual-revenue stream model of advertising and carriage fees is of course one of the biggest things fortifying the sector.

However, the ability to exploit branded content – particularly that the networks own -- across various technologies, platforms and partnerships is another big reason to have hope, the panelists say.

The numbers back up the positivity, says panelist Henry Schleiff, president-CEO of Hallmark Channel-owner Crown Media Holdings. Schleiff points to recent media conglomerate earnings reports that show cable networks represent rare areas of strength among big companies’ portfolios. “It’s one thing that’s working,” he says, though “maybe they’re not doing as well as they should be.”

As content becomes easier to watch on-demand, it’s a good thing from the content producers’ point of view, says panelist Jeff Shell, president of Comcast Programming Group: “The business models will follow that.”

Particularly with strong branding, “you can exploit your content past television,” says Rich Ross, President of Disney Channels Worldwide, “but you do have to get in at the beginning.”

Content ownership is key, Ross says, adding that Disney Channel owns 95% of their content. “But if people don’t know who makes it and it’s free, it doesn’t just go off TV, it goes into thin air,” he says.

In the best-case scenario, brand leaders are able to create a 360-degree experience. “You can use technology for a greater, deeper experience,” Ross says. “That’s better for the consumer.”

Lifetime Networks President-CEO Andrea Wong says the evolving TV landscape, tech advances and habits right now are “additive,” that more people are consuming more media.

“More people are watching TV, more homes are being wired for cable,” Wong says.

“You can’t bury your head in the sand,” she adds. Among Wong’s strategies for growth is “getting more creative every day with integrations” such as a deal Lifetime made with Unilever on upcoming miniseries Maneater. The sponsor is written into the script, Unilever is advertising, putting up marketing money and even marketing the mini in products in the store, she says.

It also doesn’t hurt that new research and measurement systems are debunking old myths about advertising that were not favorable to much of cable’s business, Schleiff says. Hallmark has a strong following among baby boomers, who Schleiff says research is proving more than ever to be a powerful demographic for ROI.

“One of the transforming things in our industry right now is the impact of research,” Schlieff says. “If someone’s marketing budget is cut in half and they’ve got to move product, they have to know the best way to do that,” he says.
Schleiff even asserts that part of the failure of the auto industry can be traced to confusion about one’s audience: “They didn’t know who was buying cars.”

Finding new ways to work with operators and marketers and still keep the viewer happy is the priority going forward, Herzog says.

One thing most panelists are not optimistic about is the idea of brand-new cable networks. Shell is in the minority on the panel who will go as far as saying he sees potential there. Most panelists say that aside from brand extensions, such as the year-old Hallmark Movie Channel or Lifetime Movie Network, there is little room for new channels.

Shell insists the demand exists, particularly for networks featuring HD content. “Last decade’s digital is this decade’s HD,” he says.

Rod Perth, co-founder of ReelzChannel and past HRTS president, moderated the luncheon panel. Approximately 700 guests attended.