Julian Clover reports from Madrid where a confident cable sector looked for new monetising moments.
The theme for Cable Congress 08 was New Video Services: Driving Growth. The difficulty is that most of the time the video services belonged to a third party who planned to use cable’s ever expanding broadband networks to deliver content that would also compete with operators’ TV bundles.
Once more European cable has to wrestle with whether or not it should be in the content business itself or just provide the pipe for other people’s handiwork in the form of over the top video delivery. Virgin Media CEO Neil Berkett was clear that such services, combined with video on demand and the digital switchover process provided not so much a window of opportunity, but a complete set of patio doors.
Video on demand has become cable’s clarion call, Berkett quoting figures that show the half of Virgin subscribers that use the VOD service produce an average of 22 views per month, The problem for Virgin and for other operators is the ability to create what Time Warner’s chief marketing officer Sam Howe described as a “Monetised Moment”.
Time Warner has enjoyed success with Startover TV, where subscribers joining a programme late can instantly return to the top of the show. “We thought at first who would want this, get a DVR, but the usage rate is 4 to 5 times a month by 80% of users.” It has also proved popular with the networks because unlike with digital video recorders the advertisements cannot be skipped.
Howe admits it is difficult to quantify the effect Startover and other innovations have had on churn, though overall he says it has fallen by 15% in areas where Startover is available. The concept then is to offer customers a basket of services that would decrease any possibility of them even contemplated a shift to the evil satellite or telcos trying to claw back market share through IPTV. Speakers had clearly drawn lots beforehand on which technology to bash. The reality is that even DTT brings pressure in markets that have been used to a basic analogue package for just a few Euros.
Nevertheless, European cable is very much in a growth phrase, the financiers outwardly confident that the sector will survive the credit crunch. Outgoing president Manuel Cubero reported double digit revenue growth, Cable Europe members between them bringing in €17.9 bn in 2007, an increase of 12.6%.
Digital TV also continues to grow, sometimes pushed by regulators, and total growth of 40% sat beside figures of 300% in Central & East Europe.
The glaziers are hard at work on those patio doors.
