A High-Tech History—Cable Reinvents Itself
By | August 9, 2012
Larry Satkowiak
One of the more remarkable features of the cable industry has been its ability to reinvent itself. And technological innovation, much of it developed by the industry itself, has been the prime mover of that evolution. Indeed, it is within the context of technological innovation that I find myself explaining to people how the cable industry has evolved. I divide the history of cable into three distinct periods: the era of the pioneering entrepreneur, the era of satellite and the era of innovation.
The era of the pioneering entrepreneur: 1948 — 1972. Community antenna television gets its start by solving a key problem for the consumer: How do I get a television signal? Television was a new industry; broadcasters delivered their signals within large metropolitan areas. However, the signals operated best with a 75-mile radius. If you lived out-of-range, you typically hoped that a new station would open in your area. In September 1948, the FCC banned the creation of new television stations when it found that its earlier solution for spectrum allocation did not work in the age of color television and unpredictable interference. The public outcry at that time prompted some very resourceful people to deliver the existing distant signals through a coaxial cable—and an industry was born.
The era of satellite: 1973 — 1999. Satellite technology opened up a new set of possibilities for an industry that by the early 1970s was struggling with high interest rates and escalating operating costs. In 1973, the demonstration of satellite technology got cable operators thinking about ways to lower costs, increase quality and develop new business models. This era also paved the way for the delivery of new content and HBO, CNN, ESPN, Showtime, C-SPAN and many others became household names, expanded our world and gave us new alternatives for entertainment. The 1984 and the 1992 Cable Acts presented new opportunities and new obstacles to an industry already looking at personal computing and the Internet.
The era of innovation: 2000 — the present time. As the 21st Century dawned, the hot new technology was the Internet. It seemed everybody had an AOL address. You may remember the 28.8Kbps modem that defined www as the “world wide wait.” The cable modem changed all that by introducing high-speed broadband that would revolutionize the Internet and pave the way for the high-tech companies of today. We saw the triple play emerge as cable challenged the monopoly of the phone companies and brought prices down for the consumer through direct competition. Others also entered the cable business, and the term MVPD arose as a way of describing the new, competitive environment for cable programming. We were amazed at HDTV and delivery of content on an iPad or your wireless telephone. It seems that this era will introduce the greatest changes to the cable industry, as we find it hard to define what the word “cable” even means to people today.
So, how do we interpret this information? Do we really have enough data points to discern a pattern? Maybe. It seems that the cable industry reinvents itself every 20 – 25 years, which is somewhat typical of a high-tech industry—at least those that survive and thrive. The seeds of change appear long before the next cycle begins as new ideas mature into new directions. If we assume that the 20 – 25 year pattern holds, then it is possible that the next inflection point for the industry is emerging right now.
Certainly, regulation has played a role in the growth of the cable industry. As each era reaches maturity, the newest technologies challenge the existing regulatory framework and new regulation becomes inevitable. And heavy-handed regulation can stifle innovation.
The challenges to the cable industry are numerous, but this is clear: It is a highly creative, high-tech industry. If the past gives us any clues about the future, I would expect that we might not even recognize this industry ten years from now. It should be an exciting ride.
(Larry Satkowiak is president and CEO of The Cable Center, the nonprofit educational arm of the cable industry. The Center preserves cable’s enduring contributions to society, strengthens relationships between cable and academia and unites the industry around the advancement of exceptional customer service. www.cablecenter.org)