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Davatzes dumps on cable's digital drive

Chicago - The theme of this year's cable show may be "We're Making Broadband Happen," but A&E's top executive thinks some cable operators and programmers are going about it all wrong.

On a panel at the show's second general session, Davatzes said he favored a methodical, calculated approach to adopting both interactive television and video-on-demand and pay-per-view services.

"If you were manufacturing cars, you wouldn't roll out everything you had in the pipeline at the same time because you'd be broke," said Nickolas Davatzes, president and CEO of A&E Networks. "What you want to do is roll it out to people to get used to and then give them something new or upgrade."

Broadband is giving cable operators the chance to deliver a range of advanced voice, video and data services, but the rate they should be introduced to consumers sparks debate; the debate over how much/how soon is at least a subplot of this year's cable show.

"Technology chasing a marketplace is the avenue to disaster," Davatzes said.

A&E has taken small steps toward broadband content. The network is preparing its first big major digital video project, archiving 900 episodes of its popular Biography series that will be ready to be sold as a pay-per-view product by the fourth quarter. Likewise, he said, the network also has been cautious with interactivity on its Web site, although a real-time history trivia game has been popular, attracting up to 50,000 visitors at once.

This cautious approach to broadband mirrors A&E's conservative Internet strategy. While some networks spun off separate Internet divisions, hired hundreds of employees and created original content, A&E tried to keep it simple. And as other networks, including Discovery and Fox, were forced to retrench, A&E acquired information-service Web site in January to provide content for the channel's pages.

Cable operators on the panel with Davatzes agreed that consumers have trouble conceptualizing broadband technology.
"Consumers don't get it until they see it. Once they have it, it's absolutely epoxy glue," said Michael Willner, president of Insight Communications, which has made digital set-top boxes available to all its subscribers.

But Willner and AT&T Broadband President Dan Somers disagreed with Davatzes' desire to slow down. They applauded digital cable's growth rate (4 million to 12 million subscribers in the past three years, according to Somers) but emphasized the need to expand more rapidly.
"I'd like to see things happening more quickly throughout the industry because sometimes it gets a little lonely out there," Willner said. "Everything I am hearing from my colleagues is that they are absolutely committed to the interactive platform and searching for their own brand and their own way of doing things and they will launch very aggressively going forward."

Davatzes, Willner and Somers agreed that broadband services need to provide customers with value.

"We can't deny the changing technology that's rushing towards us," Davatzes said. "We have to learn to embrace it, or it will run us down, but we should do it in a way that really mirrors the interests of the consumer."
- Allison Romano