Alternatives to cable and satellite carriage are exploding. That’s why programmers tout their brands—and flirt with cable’s competition—even as cable remains the dominant distributor. By Shirley Brady Programmers once considered cable operators their first and most important partners. Cable industry conventions—such as this week’s National Show or the now-defunct Western Show—used to be chock-full of ribbon-cutting ceremonies as these "cable" networks celebrated important milestones. These days, however, networks are just as likely to launch with cable’s satellite competitors, EchoStar and DirecTV. Programmers increasingly are looking to use cable’s telco competitors, Verizon and SBC, as video launchpads. Cable carriage still is critical to networks’ success. After all, more subs and higher ratings beget ad dollars, higher rate cards and more opportunities to break out of the clutter. But consumers are more drawn to big media brands—ESPN, MTV, etc.—than their local cable operator’s brand. That’s why Comcast pursued Disney, hired Jeff Shell away from TV Guide to supersize its content strategy and has been stocking its linear and nonlinear cupboards with high-profile programming. When Matt Strauss, Comcast’s VP of VOD content development, told a CTAM Denver chapter meeting last month that Comcast treats VOD "as a new destination—we are on the brink of a new revolution," he was talking about more than video programming for TV. "My focus is really on nonlinear, and it’s almost platform-agnostic," Strauss says. "Over time, video will be consumed mobilely, no different than what we already see with music. On demand is our foundation, but it’s also cross-platform opportunities with broadband, with handhelds, with delivering content wirelessly to automobiles—which Comcast demo’ed at the CES Show. It’s really, when you get at the heart of what we’re doing, all content. And then making that content available on as many platforms as consumers are consuming." That’s one reason why NBC acquired Universal: It needs a substantial library that’s copyright-cleared and ripe for packaging, distribution and licensing. All TV networks have become platform-agnostic, which these days means much more than just having a website. The Weather Channel, CNN and ESPN are a few of the early entrants in the mobile video market. Weather is relaunching its logo and updating its look in the third quarter to stand out on cell phones and other devices, says Wonya Lucas, the channel’s EVP, marketing. Networks looking for non-cable revenue opportunities now have a long list of platforms from which to choose: telco TV, broadband/streaming, "mobisodes," on demand, cell phones, personal/mobile devices, DVR, podcasting, interactive, games, DVD, high definition, Akimbo, DAVE TV, USDTV and more. These days, programmers’ affiliate sales and business development executives are as likely to hit CES each January, or an Intel or Microsoft developers’ meeting, as they are a cable industry confab. Already, one must-attend for programmers is EchoStar’s annual dealer rally; now they’re also meeting with Yahoo and Google’s video teams. Taking the "Cable" Out of Cable Nets Programmers no longer consider themselves "cable" networks, according to the more than 25 programming executives with whom I spoke leading up to this week’s National Show. From well established to start-up, independent to consolidated, they consider themselves platform-agnostic "brands" or "media networks"—anything but "cable networks." Each wants to be future-proofed and ready for convergence, or at least willing to experiment with new platforms and technologies. They’ll see what sticks with consumers and advertisers and what will drive their core business—getting eyeballs to their programming. An exec from a multi-network programming group told me of an internal conflict at his company over the question of removing "cable" from their name, just as ABC Cable Networks Group rebranded to Disney Media Networks a year ago. The conflict entered on the fear of reprisals from their cable operator affiliates. "We always consider ourselves technology-agnostic, or platform-agnostic," says Albert Cheng, SVP of business strategy and development for Disney and ESPN Media Networks affiliate sales and marketing. "So we started on cable, went to satellite and potentially will be on other carriers that might be getting into the business. Viewers will still be watching television, so the core of our content will be primarily a television-viewing vehicle. The core linear network is still the centerpiece of our content delivery." Programmers who see the linear brand as their core business, such as Oxygen founder and CEO Gerry Laybourne, echo that sentiment. While Laybourne is exploring wireless and other outlets, she’s investing in creating original VOD content for one reason. "I am a cable person," she says. "I grew up with these guys. Because I grew up in cable, it’s where I’m going to start." Laybourne backs up that claim by serving on the board of Insight, an Oxygen affiliate. "It’s fantastic to think like a cable operator—it’s part of the reason why we’ve gotten so involved in VOD," Laybourne says. "These guys have invested $95 billion in the infrastructure to support all of our communities. And they don’t get the proper credit they deserve. Seeing it from an operator’s standpoint and seeing about their margins and their challenges and the competition from satellite, it’s all part of my education." The One TV World In today’s consolidated media landscape, broadcast nets own cable nets, which should lead to more cross-network deals. An exception is Viacom, which is splitting its cable nets from CBS, prompting skepticism from Sanford C. Bernstein analyst Michael Nathanson, who told The New York Times: "It’s a mathematical certainty that cable’s going to slow down. The notion of watching TV in a linear fashion is going to be turned on its head." Already, MTV Networks is pursuing convergence strategies on the non-CBS side of Viacom’s house. It’s getting ready to launch a music downloading service that leverages MTV’s brand loyalty with teens. MTVN also expanded its digital music and media group to get ready for other interactive content plays. Last month, it named Nicholas Lehman SVP, strategy and operations, to help SVP Jason Hirshhorn lead an expanded digital content team. "They will play a key role as our company continues to serve our audiences on every level and on every platform—online, digital wireless or gaming," said MTVN Music Group president Van Toffler in a statement. Networks are starting to take advantage of the advertising opportunities in these newer platforms. Case in point: NBC Universal. After its merger closed a year ago, NBCU consolidated its ad sales business across its broadcast and cable networks. This past January, it signed Volkswagen to a five-year global marketing deal worth $200 million. The deal embraces NBCU’s television brands (including product placement across its networks), studios, theme parks, DVDs and virtually all corners of the company. Unthinkable a year earlier, the deal started with Universal’s film division and was crafted by the corporate ad sales and marketing team. It’s adding VOD and new digital opportunities to its future cross-platform Olympics deals, which generated more than $1 billion of traditional broadcast/cable network ad sales for the 2004 Athens Games. Advertisers are starting to value "cable" networks’ more targeted programming and demos, leading Carat Digital EVP Mitch Oscar to use the term "broadercasting" to express his largesse toward all television networks and their nonlinear touchpoints with consumers. Turner Broadcasting has been most vocal in trumpeting the "one TV world" view to advertisers. "One of the things that I’ve been preaching internally, and it’s starting to resonate externally, is that it was a huge difference way back when cable first started," says David Levy, president of Turner Entertainment ad sales. "Right now, we’re in 90% cable penetration. That leaves the broadcast-only home at 10%, and I don’t think we’ll ever get in 100% [so] we’re probably pretty close to where we’re going to be maxed. At this point right now, all playing fields should be equal." What does this mean for linear TV and nonlinear—wireless, broadband, VOD—platforms? "Everybody’s equal," Levy says, citing research that TV viewers typically watch an average of 14 channels. "When it’s an equal playing field and everybody has got the same distribution mechanisms, it’s the brands that are winning out." Responding to advertisers’ thirst to test digital distribution of his brands, Levy cut a deal with Nokia that leverages TNT’s coverage of the NBA. Once a pre-game show with Charles Barkley & Co. ends, viewers can continue to listen exclusively to their banter on a Nokia phone for two to three minute segments. "We’re all testing the new technology," he says. "I’m not saying it’s delivering gazillions of dollars and millions and millions of viewers. But it’s another way to get your branding message out there, and to do it in unique ways. If we feel we’re disrupting the program, or disrupting the viewer’s enjoyment or experience, then we won’t do it." Although Turner’s networks brands don’t call themselves "cable," Levy is quick to add that he values cable operators, particularly when he’s wearing his other hat, as president of Turner Sports. "I don’t look at any sports property unless it fits three criteria: Does it work for our brands? Does it work for our advertisers? And does it work for our cable operators? We’ve always had that philosophy. We’ve also looked at opportunities of national sweepstakes or contests that have local extensions. So we do work closely with our cable operators. Not every deal, by any means, but certainly the ones that make sense to bring down to a local level." The Premium Example Even premium cable programmers, which don’t sell ads, are using other distribution platforms to enhance their subscription businesses. HBO is as jazzed about DVD sales and SVOD growth as its core linear programming. Starz is testing the waters on streaming its content via Starz! Ticket, a subscription service with RealNetworks. Showtime built huge buzz around its launch of Fat Actress last month, using cross-platform marketing that included teaming with Yahoo to webcast the series’ entire first episode. In March it also promoted the pre-show of its live Usher concert with a simulcast on Viacom sibling MTV, and hired its first-ever VP of product integration to oversee off-network marketing relationships to complement its original programming. "We’ve got to sell, and we’ve got to sell every month," says Showtime chairman and CEO Matt Blank. "These promotional and marketing aspects are all programming-driven, and they’re also driven by the unique structure of our distribution business. As you get more distributors in the category, product promotion becomes more important. Building the brand on the back of all this proprietary programming is our No. 1 priority, whether it’s Fat Actress or L Word or Usher or all the great stuff that we’ve got coming." Even as they strip "cable" from their names, programmers still participate in cable industry efforts, whether fighting a la carte, family-friendly tiers and indecency battles in tandem with the NCTA; sharing marketing insights on CTAM committees; tackling VOD measurement with the Cabletelevision Advertising Bureau; solving technology issues with CableLabs; supporting progressive industry groups such as Cable Positive, WICT and NAMIC; or donating programming to the Cable Center archives. That’s over and above their local ad sales, affiliate marketing support and public affairs partnerships. There’s also a perception among viewers that, as much as they think of TV as a seamless environment, they still find the best programming "on cable." That’s reflected in the non-broadcast networks’ ratings growth, the slew of awards each year and critics’ increasing attention to non-broadcast networks, including smaller niche services and digital networks. That may be the best hope that whatever TV networks call themselves—and whomever else they dance with—they continue to be mindful of where viewers prefer to be: on cable. "Viewers don’t sit home and say, `I think I’m going to watch a cable network tonight, or I think I’m just going to watch broadcast tonight,’" says Discovery Networks president Billy Campbell. "Cable’s done a great job eating into broadcast’s share because almost all cable, and we certainly consider ourselves leaders in that area, [is] really strongly branded. Broadcasters today are struggling with their brands. When we do research, almost no young viewers say, `I’ve got to watch X broadcaster tonight.’"

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