Look for Cable in the Truck

Dozens of cable executives plan to converge in Las Vegas this week for the Consumer Electronics Show.

But while DirecTV Inc. and EchoStar Communications Corp. will flaunt their latest products inside the convention hall — including Dish Network-branded TVs and new interactive TV services

SEACHANGE 'CAN’

Video-on-demand server vendor SeaChange International Inc., which first brought the truck to CES last year, is lending it to the Cable & Telecommunications Association for Marketing during this year’s show. A banner for CTAM’s “Only Cable Can” initiative will adorn the 80-foot truck, which will feature displays of cable VOD programming.

“Like all the partners [in the CTAM on-demand consortium], we’re doing what we can to collectively promote the virtues of on-demand television. This is our contribution to the group,” said SeaChange spokesman John Coulbourn.

Long a bastion for satellite providers, CES has become a more important convention for the cable industry, as operators look to expand into retail to help market HDTV programming packages and other new products. The convention drew 130,000 attendees and 2,400 exhibitors last year, ranging from television manufacturers to firms that install DVD players and other electronic gadgets in cars and boats.

“It’s a great advantage to look at their products and make cable even better, through partnering and working with [CE companies],” said CTAM CEO Char Beales. “And because there’s a lot of media there, it’s a great place to promote Only Cable Can and the new products that cable has, like on-demand and HDTV.”

Since last year’s CES, CTAM and its cable-operator members have partnered with Panasonic Consumer Electronics, Sony Corp. and Samsung Electronics America on nationwide HDTV-marketing campaigns.

Centered on the “Only Cable Can” theme, the campaigns marketed cable as the best way to watch events such as the Summer Olympics, football games and the National Collegiate Athletic Association Men’s Basketball Tournament.

Cable has made progress in partnering with consumer-electronics firms. But the industry still trails satellite in terms of retail distribution.

GET WITH PROGRAM

Some analysts say the operators need to focus on crafting deals with retailers to motivate sales reps to pitch cable over satellite.

“The Circuit City salesperson is incented to sell TV sets; they’re incented to sell cable wiring, which they make as much money on as the TV sets,” said Leichtman Group market researcher Bruce Leichtman. “They’re incented to sell power cords. They’re not incented to sell programming.”

Beales said CTAM representatives and some of other members of the group’s CES contingent, which will include about 25 cable operators and 25 programmers, plan to meet with retailers at the convention. A key goal would be to drive the number of HDTV programming packages cable operators sell to customers, she said.

“We’ve got to close the gap between the number of people buying sets and the number of people buying service for HDTV,” Beales added.

Time Warner vice president of sales channel development Charles Haugabrook said MSO representatives plan to meet in Las Vegas this week with retail customers to discuss promotions for the second, third and fourth quarters. He said they’ll also meet with CE manufacturers, content companies and other CTAM members, and that they’ll discuss new Only Cable Can initiatives for 2005.

Time Warner Cable has made a big push to expand into retail, and its products are now featured in 700 stores nationwide, including Best Buy, Circuit City, Staples, CompUSA and Ultimate Electronics.

“The number of customers that we have gotten through retail, compared to a year ago, has increased threefold,” Haugabrook said.

The emergence of digital cable-ready HDTVs, which first debuted last year at CES, might also help operators on the retail front.

The new sets, which were the result of an agreement on a plug-and-play standard between cable operators and CE manufacturers, allow consumers to decode scrambled programming by inserting a CableCARD into the back of the set, which is leased by their local operators.

Cable operators installed more than 10,000 CableCARDs last year, according to the National Cable & Telecommunications Association. But the first line of digital cable-ready TVs don’t allow viewers to use VOD and other ITV services, since they rely on a one-way standard.

Cable operators, CE manufacturers and DBS firms have been negotiating terms for a two-way plug-and-play agreement — but NCTA and CEA executives said they don’t know when a two-way agreement could be reached.

DISHES ON DISPLAY

CES is the biggest convention of the year for cable rivals DirecTV and EchoStar. Last year, EchoStar turned heads when it placed a 22-foot-high blow-up pig at its booth to boost its “stop feeding the cable pig” campaign.

EchoStar spokesman Marc Lumpkin said the pig won’t return to Las Vegas this week.

Lumpkin said EchoStar plans to display a new line of Dish Network-branded liquid crystal display HDTVs at the convention, manufactured by a Japanese consortium.

EchoStar will also unveil new interactive TV channels at CES, including a shopping channel, Lumpkin added.

DirecTV, which displayed new multiroom DVRs at last year’s CES, plans to unveil new interactive services at this year’s convention, said spokesman Bob Marsocci. Those include three new “mosaic channels” that DirecTV will launch this month — Newsmix, Sportsmix and Kidsmix, which will allow subscribers to view several channels from the same genre on a single screen.

The Consumer Electronics Association booked several top cable executives to speak on panel sessions at the show. MTV Networks CEO Judy McGrath will give an address on Jan. 6.

A Jan. 7 session, entitled, “Now, a word from your cable company,” will feature Motorola Broadband Communications Sector president Dan Moloney, Insight Communications Co. CEO Michael Willner and Scientific-Atlanta Inc. chief technology officer Robert McIntyre.

A panel focused on the “battle for control of the digital living room” will include Charter Communications Inc. CEO Carl Vogel, Philips Semiconductor CEO Frans Van Houten and Digeo CEO Jim Billmaier.