The US cable industry has a new face and its poster child is Brian Roberts, CEO of Comcast, the largest US cable operator following its acquisition of AT&T Broadband. Roberts was the featured speaker at the opening session of this year's Western Cable Show. In past years you could count on the opening session being full of flash and show biz. Speakers frequently included folks like Ted Turner and John Malone, and they were often entertaining, provocative and irreverant. Brian (and the North American cable industry) seems to warrant a new set of descriptors: low key, thoughtful, bottom-line oriented and articulate.
Although Roberts spoke about the opportunites he sees now that the acquisition of AT&T has been completed, he also acknowledged with strong words "the crisis" of several situations. He applied the term to AT&T Broadband's loss of 525K basic subscribers this year. "Tragic" was the word he used to describe the reality that one third of customers in the sophisticated, hi-tech San Francisco Bay area are not able to get high-speed Internet access via cable. Fixing these situations is clearly "job one", along with getting the new Comcast's margins up.
The message of Roberts speech was more about the need to re-unite the cable industry and present a united focus on satellite, their primary competitor, than on the new technologies which are generally front and center at the Western show. His focus is on competently rolling out what already exists and making the customer experience the best it can be. The order of priorities for services is digital cable, cable modems and VOD. Services like telephony using voice over IP will come later.
Because the foundations of the cable business are in getting consumers to pay for delivery of video content, Roberts declared that "TiVo is the Napster of our future". He said it's incumbent on MSOs to develop a viable pay model for the future, but also acknowledged that "the genie is out of the bottle". Not surprisingly, this quote generated much commentary on the Internet. We found the statement to be strange, since at the same time Roberts uttered those words, his newly acquired AT&T Broadband was offering TiVo with a $50 rebate (see http://attbroadband.tivo.com) and one TiVo model is AT&T branded.
Roberts and his team clearly have a huge job ahead in improving the entire customer experience, accelerating technology development and capital spending (especially for upgrading the AT&T plant) and simultaneously responding to Wall Street pressures for free cash flow. However, with some of the excellent folks on their team, we wouldn't bet against them.