The exiting programmers and absent operators will certainly be missed, but there do indeed seem to be plenty of techies to fill in the gaps as technology nearly overwhelmed last week's annual Western Cable Show.
Attendance at the annual Western show hit an announced 32,800, up about 4% from last year's convention. That's good news for sponsor California Cable Television Association, which is grappling with the loss of major exhibitors including Home Box Office, Showtime and, insiders say, Comedy Central, as industry takeovers leave buying decisions in the hands of fewer and fewer cable operators.
Networks are finding it better to divert the $500,000 to $1 million cost of exhibiting into other affiliate sales efforts. But technology companies such as Sun Microsystems, 3Com and Microsoft are, for now, taking up the slack, trying to convince the world how broadband they can be.
The biggest secret of any trade show-how many attendees worked for buyers and how many were merely booth bunnies working for exhibitors-remained secret. Cablevision Systems Corp. Chairman Charles Dolan decided at the last minute to come out, intent on spending two days walking the exhibition floor and hearing what people said in various panel sessions.
Dolan said he finds crawling technology booths invaluable, looking primarily at video-on-demand gear this year. But he recognizes he's one of the few operators who still do. "When you see an actual cable person, you jump up for joy," Dolan said.
Henk Hanselaar, CEO of video-on-demand equipment vendor DIVA Systems, said that the network defections don't matter to him. "You have to be here," he maintained. "You need the buzz, and you'll be noticed if you're not here."
John Burns, president of distribution for Fox Family, said, "The main complaint is that there are no operators here and there's nothing but programmers standing around and looking at one another. The value would be enhanced if there were more operators." Still, he finds that he and his executives need to "walk around this floor and see how the networks are programming, how they are thinking, how they are marketing and what they're going to do. We can walk around the floor and see what the competition is doing."
Senior cable executives missing in action included Charter Communications Inc. Chairman Jerry Kent, Cox Communications Chairman Jim Robbins and Time Warner Cable Chairman Joe Collins. Time Warner Inc. Chairman Jerry Levin was in town, but not in evidence at the show itself. Those attending included Liberty Media Corp. Chairman John Malone, AT&T Broadband Chairman Dan Somers and Insight Communications Inc.'s Mike Willner, but all were speakers at the show.
The high profile of interactive technology and IP telephone-gear makers couldn't dissipate the shadow cast by crumbling media and Internet stocks, reflecting investors'loss of confidence in cable systems'and network owners'core strategies for expansion. The executives have all made bet-the-company pushes into Internet and interactive services, either investing billions on now-ailing content plays or expensive upgrades of cable systems to carry heavy electronic traffic to consumers.
Moderator Ken Auletta, who has covered media moguls extensively for
New Yorker
magazine, joked about how rapidly the industry can change. "Many of these people were wealthier last year than they are this year. Last year, America Online was an adversary, now they're a member of the fraternity."
Finally, Michael Armstrong, AT&T Corp. chairman, and John Malone, Liberty Media Corp. chairman and unhappy AT&T director, "were talking freely."
But the executives called Wall Street's pounding of media and Web stocks indiscriminate and short-sighted. "It takes time to roll this stuff out; it's just now near," said USA Networks Chairman Barry Diller. "It's almost there. Everywhere I go, I just see fatter distribution systems..Fatter distribution systems are the best way to bring this revolution to consumers."
AT&T Broadband Chairman Dan Somers particularly bristled when asked, given the drop in its stock price, how long AT&T has to "get it right." Somers responded that "I hope you're only a shareholder in AT&T not Sprint, Worldcom, Priceline, Amazon," all companies that have been pounded on Wall Street. He maintained that AT&T has lived up to 95% of the promises made when it took over Tele-Communications Inc. last year, to aggressively deploy digital cable, high-speed Internet and cable telephone service in pursuit of higher revenues and cash flow.
Even AT&T critic Malone said that heavy investment in launching new services is "deferred gratification," but the investors want to be gratified within 90 days, "at most." He firmly believes in a large, ultimate payoff. But when companies like AT&T "push down the accelerator, you push down current results. Dan's got both feet down."
However, with "any kind of disappointment or delay, you get enormous punishment."
None of the executives was willing to harshly criticize federal regulators'lengthy review of AOL's takeover of Time Warner Inc., whose executives are conspicuous only in their low profile in Los Angeles this week.
Malone, a Republican with libertarian leanings, said that regulators should only act when they see actual abuse of consumers. But Somers said that despite the likely requirement that AOL open Time Warner's cable systems to other Internet providers, something that many cable operators oppose, "I don't think out of this will come anything that is damaging to the merger. I think it will be helpful to the long-term direction of the industry."
There were the usual mishaps. Oracle Corp. Chairman Larry Ellison can move at Internet speed but missed his scheduled appearance because his private jet couldn't land at a fogged-in LAX. A group of Philippine executives almost couldn't make it because of political unrest there, then fretted they wouldn't be allowed back in. FCC Chairman William Kennard canceled a speech, though it was unclear if he ever agreed to be there in the first place.
