A classic episode of
The Honeymooners
involves yet another of Ralph's get-rich-quick schemes. He buys a shipment of forgotten all-in-one kitchen utensils for next to nothing. With a little help from Norton and a live TV commercial, he figures to make a bundle and move Alice into a swankier apartment-one with, say, three rooms. Ralph brands his ticket to the good life Chef of the Future.
The organizers of the Western Show are a little bit like Ralph and Norton. But their product isn't a kitchen gadget. It's Cable of the Future, an all-in-one contraption that's part TV, part telephone and part computer. IT CURES ALL THAT AILS THE MODERN FAMILY. One came away from the Western Show feeling he had sat through a three-day infomercial from the makers of Oxyclean.
Well, isn't that the job of a convention-providing a showcase for what's possible, what's coming-during the few days a year when executives are relieved of the day-to-day headaches of running their businesses? Sure, but the unrelenting talk of interactive TV and VOD and Internet access and EPGs and IP telephony suggests that the industry can't sell Cable of the Present anymore-or simply is no longer interested.
Cable of the Present is all that boring stuff: HBO, Showtime, ESPN, MTV, USA, Lifetime, A & E, Discovery, C-SPAN and excuse me for not listing all the other familiar cable networks that my limited space doesn't allow. It's the product that delivers 99.9% of cable's revenue today. It was broadband before broadband was cool.
In his financial analysis of the top eight cable operators a week ago (B & C, Nov. 27), Wall Street media analyst Rich Billoti reminded us that, despite the Cable-of-the-Future hype, it's still a Cable-of-the-Present business. Right now, he said, Cable of the Future is nothing but a drag on earnings. Heavy capital spending to prepare the way for new services by AT & T and Cox "so far doesn't correlate to revenue growth," he said.
Given the uncertain prospects of Cable of the Future, I would say that operators and their convention organizers had better start selling Cable of the Present a little harder. The last word I heard from my cable operator-Cablevision in Chatham, N.J.-is that my monthly cable bill was going to go up another 5% in January. In the real world-the world beyond the Los Angeles Convention Center-most cable operators' only real means for boosting revenue and cash flow is jacking up rates as high as the Washington watchdogs and competition will allow them to.
I'm not sure how far the regulators will let cable go, but the competition is making it tough for operators to take rates much higher. The week before I learned of the Cablevision hike, I picked up a brochure on the latest DirecTV offering at my local Blockbuster store. For the $60 I pay Cablevision each month, I could receive via satellite many more "cable" networks, access to a ton of PPV movies and a capable electronic program guide.
For a few dollars more, I could subscribe to out-of-market sports. All that's stopping me from making the leap from land to sky is the $200 one-dish-two-receiver installation charge and the prospect of losing some local broadcast signals and Cablevision's regional news service. It's a toss up for me. But millions of others have already opted for satellite.
Given the heavy spending that the major operators are doing to upgrade their systems, it is a safe bet that some of the two-way services will materialize and help keep customers from straying to the birds. But it would be a mistake to concede any customer between now and the unknown when the new services come online.
How about an NCTA convention in June dedicated to selling Cable of the Present: retaining subscribers and finding new ones? That would be refreshing and help reassure investors. (Given that it's also the convention's 50th anniversary, it would be nice to remember Cable of the Past.)
Needless to say, Ralph's dreams of cashing in on Chef of the Future came crashing down along with the set of his TV commercial. But he was OK. He had kept his job with the bus company. There must be a lesson in there somewhere.
