April 10, 2006

Insider’s View: As Satchel Said, Don’t Look Back

In spite—or because—-of its competitive advantages, cable must fend off complacency.

By Stuart Lipson

Cable has always found a way to survive and even thrive when threatened. In its best moments it has created positive change. Three examples of that positive change: mere cable networks became major entertainment companies; MSOs multiplied their services; and cable succeeded at selling broadband to the masses.

Operators will once again need to innovate to conquer the latest challenges from the satellite companies and telcos. First, though, operators must make sure that whatever allowed the satellite industry to grow to its current size—whether it was complacency or DBS' digital platform or both—does not reoccur with the telcos. Complacency is a real danger; it's the evil twin of cable's very real competitive advantages.

Cable has at least three primary advantages against satellite and telco competition: 1) it has large clusters of television and broadband customers in most markets, unlike telcos; 2) it has a long and deep tradition of innovation; and 3) it has a proven ability to respond to competitive pressures. (There's already a chink in cable's armor: Satellite's carriage of local signals has reduced cable's local advantage.)

Cable operators also have long-standing relationships with cable television network brands and their marketing, advertising sales and public affairs initiatives. Cable has more internal media inventory and communications tools than any competitor. Cross-platform and on-demand advertising opportunities extend cable's reach into the business community. Cable can work closely with local broadcast stations to produce local broadband content and create revenue and marketing opportunities.

Yet these very advantages could lull operators into a sense of false security.

A PLAN FOR SUCCESS

Speed and communication, however, can defeat stasis, and are critical cultural factors. Get deals done quickly. Eliminate corporate barriers that put the fear of stepping on someone else's agenda ahead of smart, new ideas. Share system-level revenue and outreach successes across all markets. Find a programmer or advertiser that wants to be a real partner. One who wants to work with you to use every advantage you have. Share advantages and resources with those partners so they can go back to the well and get more for you.

Corporate headquarters should provide scalable public affairs and outreach opportunities with localization opportunities. Regional management can provide additional resources and focus for the operations they serve. This already exists; just look at the CTPAA Beacon Award winners for ideas to build on. Conversely, the people in local operations who talk to customers every day and live in their communities are the best resource in a competitive environment. They need to know that everyone behind them is running as hard as they are to stay ahead of the competition. Because it is coming fast.

Stuart Lipson is a 17-year veteran of the cable business. He has worked with, among other companies, SeaChange International, Court TV, RASCO, ACTV, Incanta and ICTV. He is the founder of Media Bridges, LLC, a strategic business development company.