|The 2013 Independent Show, hosted by NCTC and ACA, brought over 1200 people (including family members and guests) to San Diego, CA on July 28-31 in Orlando, FL. This special edition of nctcnews |
All sessions were recorded and the videos are online for members at www.nctconline.org/tis. There is no charge for viewing the videos from the meeting. New this year: two highlight videos that give you brief clips from each panel; see key comments from 5 sessions in just minutes!
In addition to the “live on tape” session videos, several speakers used PowerPoint slides and those are posted separately for member review. (Viewing the PowerPoints can be done quicker than viewing the video, but the video provides full context for the speaker’s key points. The PowerPoints are incorporated into the videos.)
|155 member companies were at the conference, with 301 members from those companies at the meeting. Exhibitors (programmers, technology suppliers and service companies) sent 567 people to the meeting. Press, invited guests and family members made up the balance of the 1200 attendees.|
|NCTC has compiled the following highlights from the 2013 Independent Show conference in San Diego, CA. Over the three days, NCTC and ACA presented 8 educational sessions featuring 30 speakers. In addition, NCTC and ACA hosted their respective Annual Member Meetings and completed their elections for the 2013 slate for each organization’s Board of Directors.|
NCTC Business Overview
In the Members Meeting, Judy Meyka, NCTC’s EVP of Programming, noted how much the tenor of negotiations have changed over the past few years, citing recent press reports about the networks drive for more revenue. (See the graphic on the “Programming Landscape”.) “Very rarely do programmers come in anymore and actually want to enter into a partnership with you. They really come in prepared for a fight,” Meyka told members.
Part of the challenge in these negotiations, Meyka noted, is the change in network compensation. Ad revenue used to be the primary source of income, or at least half of a network’s expected revenue, but with the ad revenue now split over so many networks and tied to network performance, the license fee revenue is now the leading source of network income.
In addition, programmers routinely note that if NCTC pays another network “X”dollars, then we should pay X+ for their network. NCTC, Meyka commented, has done the best we can in trying to negotiate these deals and additional deals that are currently under negotiation. (See the “Programming Update” chart.)
“Believe me, once when we sign on the dotted line we’re not always satisfied, either. We’re trying to find ways to make the deals more palatable and easier to administer,” Meyka said.
Rich Fickle reinforced Judy Meyka’s earlier comments in his remarks at the NCTC Members Meeting, noting that we know the programming deals are hard and that fact won’t change in the near future. He noted that NCTC must be prepared for these tough negotiations: “For renewals that are happening in 2014, we have already started our strategy and planning. The key thing, the source of our ability to negotiate better deals is your support…We actually need members to work with us upfront as opposed to after the negotiation’s done.”
Fickle told members that by pre-committing to an agreement (within defined deal terms), we will be in a better position to negotiate with programmers, especially if that pre-commitment prevents programmers from fragmenting the membership with direct deals.
Corey McCarthy, SVP of Business Development and CFO, spoke to members about some of the recent deals he’s concluded and continues to work on in the Technology Solutions business area. He opened with an appeal to members: “We have dedicated account managers who are working really hard on your behalf…to solve problems and work with our suppliers. I would ask that if you are going to do a project, give us a chance. Give us a chance to look at your project list and get you a quote; we’re trying to be as responsive as we’ve ever been.”
Over the three days in San Diego, NCTC and ACA presented eight educational sessions in addition to each organization’s respective members meeting. NCTC President and CEO Rich Fickle hosted a Cable Leader’s Panel where NCTC Board Chairman Ed Holleran reserved a chair on stage for a key factor in all cable operator’s business: the customer.
“It’s the customer we really have to keep our eye on and try to meet his needs,” Holleran said. “That customer is really changing; their needs are changing…with the growth of over-the-top and other solutions, what the customer is saying is this is what we haven’t been able to provide them.”
Speaking from the audience during the Programming Panel, NCTC and ACA member Bob Gessner took Holleran’s words to heart when he called out programmers about the high cost of programming. All panelists emphasized the value of cable, but value doesn’t always equate to affordability for customers.
“We’re not saying your product is junk. We’re not saying it’s not a good value. But we need the ability to offer options. We—and all of America—like your product, but there are times when it becomes too expensive,” Gessner told the programmers. He told of older customers crying in the cable office because they can longer afford basic cable.
The cost of programming, the growth in over-the-top content and the shrinking margins in video dominated discussions on several panels, including the Financial Panel led by Corey McCarthy, NCTC’s CFO and SVP of Business Development.
Analyst Craig Moffett told members: “There is no single strategic issue that comes close to the challenge the whole [cable] ecosystem faces because of the rise in programming costs.” He said that with the lack of sub growth, caused both by market maturity and the increase in the costs of cable, programmers are pushing even higher rate increases to meet their revenue projections.
“I liken it to a car that’s headed for a cliff and the closer they get to the cliff the harder they step on the accelerator,” Moffett said.
Patrick Knorr, Wave Broadband, spoke about a long-term trend that is changing how video is consumed. He noted Wave is working to stay on top of the changes; they are supporting over-the-top platforms and listening to their customers. “Our customers are telling us they want to do this. They want access to these products and it’s our job to make that as easy as possible,” Knorr commented.
Adapting is critical, as Knorr also noted he sees real issues with the future of the traditional video product. “It’s not dead, but I do think it is terminally ill. Two trends are going to make that inevitable. One is the increasing quality of over-the-top content, and at the same time the incentive to sample that content grows every time we have to do a basic rate increase.”
On Tuesday morning, ACA President and CEO Matt Polka introduced acting FCC Chairwoman Mignon Clyburn who spoke via a pre-recorded message to members. Chairwoman Clyburn commended members on their efforts to expand broadband’s reach into rural communities. “In many of these communities, consumers have no other choices for these services, which means that without you, millions of Americans would be bypassed by the digital revolution,” the Chairwoman noted in her comments.
Phone: (913) 599-5900 | Fax: (800) 825-0357 | Email: Lisa Miller