Cable Operator Success Depends on Solid Triple-Play Delivery and Customer
Service Differentiation in Near-term; Compelling On-Demand Platform Roll-outs
in Longer-term
NEW YORK and LAS VEGAS, Jan. 24 /PRNewswire/ -- NATPE 2005 --
PricewaterhouseCoopers today released its state of the cable television
industry report titled, "Big Bets for the U.S. Cable Industry: Key
Opportunities for Future Revenue Growth," at NATPE 2005 Conference &
Exhibition at Mandalay Bay Resort in Las Vegas. The report assesses
challenges confronting the U.S. cable TV industry and offers perspectives on
growth opportunities for both operators and networks.
The report finds that for cable operators near-term growth will come from
non-video services such as high-speed data and telephony. Additionally,
operators should pursue growth in local advertising revenues.
PricewaterhouseCoopers recommends that cable operators:
* Anticipate a true telecommunications carrier video threat. Having
already made significant investments in network modernization, cable
operators should aggressively market their broadband access and voice-
over-IP (VoIP) services before the incumbent local exchange carriers
(ILEC) catch up.
* Focus on a solid triple-play execution and pursue wireless service to
add to the bundle. Cable operators should consider collaborating with
mobile operators not tied to an ILEC to offer a bundle that
incorporates wireline and wireless service.
* Develop and communicate the value proposition of on-demand platform.
With deep relationships with both cable networks and consumers, cable
operators have a critical and unique role in making the on-demand
platform a compelling offering and a success.
* Consistently improve and deliver high-quality customer service to fully
realize the benefits of investments in an upgraded infrastructure
capable of delivering a triple-play bundle. Customer service
differentiation will be essential to acquire and retain customers.
"The U.S. cable TV industry is at a crucial turning point as competition
intensifies among cable operators, telecommunications carriers, and satellite
operators to provide multi-channel TV and other services," said Ted Schaefer,
partner, PricewaterhouseCoopers LLP. "Cable operators must respond quickly in
this battle to 'own the home' by taking advantage of their current position
and offering a solid bundled service offering of video, voice, high-speed data
-- and even wireless. Longer term, operators must develop the value
proposition of the on-demand platform for both consumers and cable networks."
PricewaterhouseCoopers' report also provides analysis and recommendations
for cable networks, suggesting that in the short-term they should place their
bets on developing and airing high-quality targeted programming and seeking to
expand advertising revenue streams with new marketing and sponsorship deals.
Those networks with strong brands and large content libraries should leverage
syndication and brand extensions, as well as develop business models for
broadband and mobile Internet content delivery.
PricewaterhouseCoopers recommends that cable networks:
* Invest in the highest quality programming content. In addition to its
positive impact on a cable network's brand and market value, the
development and popularization of a small number of hit original
programs will generate syndication revenue opportunities.
* Develop a richer stable of original broadband content that takes full
advantage of the high-speed Internet, adding to its appeal as an outlet
for exclusive content as well increased throughput.
* Develop strategies for taking advantage of the increasing number of
video outlets. The emergence of the on-demand platform, broadband
Internet, mobile Internet, and digital video recorders (DVR) has
increased consumer options for video content consumption.
* Engage advertisers in the value of targeted advertising via the on-
demand platform. Networks and advertisers will then have access to
more accurate and detailed customer data for targeted and effective
advertising.
* Diversify the advertising stream through unique marketing and
sponsorship opportunities associated with programming.
"While the rise of DVR technology will not cause irreparable damage to the
television advertising marketplace, this is a wake-up call to both the
networks and the advertising industry," said Peter Winkler, global
entertainment and media marketing director, PricewaterhouseCoopers LLP. "The
traditional 30-second TV ad format needs to be supplemented by innovative
sponsorship and marketing efforts between broadcast and cable networks,
advertising and media buying shops, talent agencies, and corporate marketers."
The report's findings incorporate analyses and viewpoints from senior
executives at A&E Television Networks, Comcast, Time Warner Cable, NBC
Universal, DIRECTV, ESPN, Fox Networks, Oxygen Media and Showtime Networks.
For an electronic copy of the complete PricewaterhouseCoopers report, Big
Bets for the U.S. Cable Industry - Key Opportunities for Future Revenue
Growth, visit the "publications" section at http://www.pwc.com/e&m.
About PricewaterhouseCoopers
PricewaterhouseCoopers' Entertainment and Media (E&M) practice is
comprised of a network of more than 3,000 practitioners providing audit,
advisory and tax services to help clients manage risk, maximize shareholder
value and support M&A activities. It addresses business challenges for its
clients, including developing strategies to leverage digital technology;
marketplace positioning in industries characterized by consolidation and
convergence; and identifying new sources of financing. Known as an industry
thought leader, the E&M practice publishes the annual Global Entertainment and
Media Outlook and other surveys and white papers highlighting current and
future trends in the industry. The E&M practice is part of
PricewaterhouseCoopers' Technology, InfoComm, and Entertainment & Media (TICE)
practice.
PricewaterhouseCoopers (http://www.pwc.com) provides industry-focused
assurance, tax and advisory services for public and private clients. More
than 120,000 people in 144 countries connect their thinking, experience and
solutions to build public trust and enhance value for clients and their
stakeholders.
"PricewaterhouseCoopers" refers to the network of member firms of
PricewaterhouseCoopers International Limited, each of which is a separate and
independent legal entity.
SOURCE PricewaterhouseCoopers
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CONTACT:
Laura Schooler of PricewaterhouseCoopers,
+1-646-471-3229, laura.schooler@us.pwc.com; or Ray Yeung,
yeung@braincomm.com or Jill Gumberg, gumberg@braincomm.com, both
of Brainerd Communicators, +1-212-986-6667, for
PricewaterhouseCoopers
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