Cable Executives Vow to Stem Subscriber Losses

NEW YORK -- Top cable executives at a Deutsche Bank media and entertainment investor conference in Florida on Monday said they want to focus on doing away with or at least reducing basic cable subscriber losses, which have led to investor concerns about cord cutting due to cheaper online alternatives.

They also discussed Netflix's streaming video service and cable operators' response.

"I hate losing subs," said Comcast Cable boss Neil Smit at the Deutsche Bank Securities Media & Telecom conference in Palm Beach, Fla. "And I'd like to see that number go away -- that loss."

Discussing when that may happen, he said: "I can't give you a timeframe."

Time Warner Cable chairman and CEO Glenn Britt also said that cable firms must concentrate on winning back video customers.

"We need to really to focus on that with a renewed intensity," he said, adding that it is "not acceptable" to see an eroding video user base every year. "That has been going on for too long."

He once again cited the weak housing market as a key driver of declines. "Until the housing market settles down, we're not going to see robust category growth," Britt suggested.

Both Smit and Britt said that Netflix's streaming video service has a great user interface and offers cheap content, but cable operators are starting to address interface issues and are expanding on-demand content, while also having access to fresher movie fare.

Netflix only offers older content, while many cable users want to see current content and movies, Smit said.

"We can more than match that functionality," Britt said about Netflix and its interface, adding that adding VOD content is key. "We just got to build up the library."

Overall, he concluded about Netflix: "I'm not sure what's there that's a sustainable advantage."

Asked if cable operators could introduce usage-based broadband pricing over time, which some analysts have argued could also be a way to slow down Netflix usage, Smit reiterated that Comcast had no such plans.

But Britt reiterated that he expects the industry to move in that direction over time.

Meanwhile, Time Warner chairman and CEO Jeff Bewkes reiterated at the Deutsche Bank Media & Telecom Conference that there is a place for deals with Netflix and other subscription-based online players for TW and the rest of the content industry - with a focus on older library product.

With Amazon.com having entered the streaming space and other companies considering it, Bewkes said he would love to see "more vibrant competition" in the space over time.

Asked if a la carte channels and pricing could be in cable operators' future, Bewkes said: "We think the bundle is the best model" since it allows broad- and narrow-reaching networks to survive, therefore ensuring more diverse programming offers.

In an a la carte world, "very chaotic" pricing increases and more chaotic advertiser support are key risks.
But Bewkes also said he feels TW's cable networks would do well even in an a la carte world.

Britt also said that pure a la carte would not make sense, because it would hurt the user experience and make reduced content offers more expensive.

But he said TW Cable will continue to look to offer lower-end packages a la its much-discussed TV Essentials package with only a few select channels.