Cable fights to take the strain as rivals gather on the horizon

It is time for cable services to get their act together, or they will lose viewers to satellite and new digital terrestrial channels. Torin Douglas is BBC Radio’s media correspondent

There is good and bad news (and not just the fact that its parent company is pulling out of the UK) for Videotron cable subscribers.

The bad news is that, unlike other cable companies, Videotron won’t be screening the Bruno-Tyson fight.

The good news is it is belatedly carrying the programmes of Live TV, so its viewers will be able to see Kelvin MacKenzie’s live “reconstruction” of the bout. Two boxers – one a former sparring partner of Bruno – will act it out, blow-by-blow, based on the Sky pictures and expert commentary.

I wish news of this creative breakthrough in cable’s sports coverage had been known last week, when a group called Women In Cable invited media correspondents to give their opinion of the cable industry. Sadly, but not surprisingly, our views were mainly negative. I felt obliged to describe my disenchantment with Videotron (MW passim) which culminated last September in my decision to switch back to satellite. Others had their own sorry tales.

However, Women In Cable did try to hit back. Christine Mitchell of General Cable revealed that cable’s average penetration among its potential customers is not 22 per cent, as we are always told, but over 30 per cent. The lower figure only relates to the penetration of cable television (and even that, as Mitchell points out, is higher than that of BSkyB among its potential audience). When you add their telephone-only customers, the cable firms have contracts with 30 per cent of the households they pass.

So why did General Cable not mention this the previous day when announcing its disappointing results to the City? Why are the industry’s spokesmen not putting forward the more upbeat view taken by Mitchell?

Maybe the forthcoming 12m advertising campaign through J Walter Thompson will put this and other more positive points across. And hopefully, the cable companies will be better prepared to capitalise on it than before, in terms of efficient customer service, competitive pricing and a comprehensive choice of channels.

Cable could soon face another competitor in the world of multichannel television. Digital Terrestrial Television – to be created by the Broadcasting Bill – is currently occupying more industry brain power and conference platforms than any other media topic. DTT could offer between 18 and 30 new channels, widescreen pictures, high-quality sound – all through existing roof or set-top aerials. The snag is viewers must buy a new set or decoder.

It is still not clear what might be shown on those channels – or even whether any broadcasters will take up the opportunity to launch them. They must decide by June, which is one reason Barry Cox of ITV, Michael Starks of the BBC and BSkyB’s David Elstein are to be found most days on a conference platform in a London hotel, airing their views and fielding questions on DTT.

All make it clear they are interested (though BSkyB could also launch Digital Satellite Television, offering hundreds of channels). What none of them seems prepared to do, however, is shoulder the huge burden of marketing the concept to the public.

They will pay for new programme services, and are willing to pay someone else – such as BT or the commercial transmission company, NTL – to transmit them. But they won’t subsidise the cost of the decoders and they won’t pay the advertising and marketing costs required to convince the public this new type of TV is worth having. They all want to piggy-back on someone else’s investment.

Cox thinks this problem may not be insurmountable. He told last week’s conference, organised by the Convergent Decisions Group, that at least one retailer believes the public will beat a path to this superior mousetrap’s door. A knottier problem for ITV and Channel 4 is that they must share a single DTT multiplex with S4C and Teletext, and it is already overcrowded.

So what programmes might persuade viewers to buy DTT? Cox said the fundamental need is for a strong pay sports channel to challenge BSkyB’s. The BBC is thinking about a 24-hour news channel and expanded BBC1 and BBC2 services. Channel 4’s general manager Frank McGettigan suggested splitting a channel by daypart into three, four or six specialist services, paid for by subscription or pay-per-view.

Carlton’s chairman Nigel Walmsley said DTT could bring the long-discussed ITV2 – rescheduling existing programmes, innovating in a way ITV cannot do on its own, and exploiting rights across two channels as the BBC does. He said the other “non-aligned” multiplexes would need to offer sport, films, regional programmes and “events” to create an attractive package for viewers.

Will all this be enough? Much depends on whether the TV sets or boxes providing DTT will also pick up the hundreds of digital cable and satellite services. As the BBC’s Michael Starks says: “We need to ensure we don’t build railways of different gauges.”

Broadcasters were then asked a very pertinent question: “Will the new channels be exclusive to DTT or could they be shown on cable?” No-one knew. But if they can, DTT could actually be a boost rather than a threat to the cable operators.

Provided they carry the programmes, of course. Perhaps Videotron viewers shouldn’t hold their breath.

Latest from Marketing Week

NOT REGISTERED? IT'S FREE, QUICK AND EASY!

Access Marketing Week’s wealth of insight, analysis and opinion that will help you do your job better.

Register and receive the best content from the only UK title 100% dedicated to serving marketers' needs.

We’ll ask you just a few questions about what you do and where you work. The more we know about our visitors, the better and more relevant content we can provide for them. And, yes, knowing our audience better helps us find commercial partners too. Don't worry, we won't share your information with other parties, unless you give us permission to do so.

Register now

THE BEST CONTENT

Our award winning editorial team (PPA Digital Brand of the Year) ask the big questions about the biggest issues on everything from strategy through to execution to help you navigate the fast moving modern marketing landscape.

THE BIGGEST ISSUES

From the opportunities and challenges of emerging technology to the need for greater effectiveness, from the challenge of measurement to building a marketing team fit for the future, we are your guide.

PERSONAL AND PROFESSIONAL DEVELOPMENT

Information, inspiration and advice from the marketing world and beyond that will help you develop as a marketer and as a leader.

Having problems?

Contact us on +44 (0)20 7292 3711 or email subscriptions@marketingweek.com

If you are looking for our Jobs site, please click here