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The Future of TV: How Do Networks Plan to Stay Competitive?

September 25, 2013 at 12:00 AM EST
Today's technology lets consumers watch shows without a cable connection or even a television. What's next for broadcast networks, cable providers and their places in the media market? Hari Sreenivasan talks to Brian Roberts of Comcast about staying competitive and the legal battles with companies who stream TV for free.
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JUDY WOODRUFF: Broadcast TV networks, no surprise, are clamoring for new viewers this fall. But beyond the traditional scramble for ads and ratings, the networks and the companies that own them are also preparing in to do battle with an entirely new set of competitors.

Hari Sreenivasan gets the perspective from one of the industry’s biggest players tonight, part of our occasional series on the future of TV.

HARI SREENIVASAN: With all the new ways to consume media, phones, tablets, laptops, you can now watch TV shows without a television set or a cable connection.

But established companies are reluctant to give up their hold on the media industry, among them, cable giant and owner of NBC, Comcast. It’s the largest cable company in the U.S., and one of the biggest broadband Internet and home phone service providers. In 2011, it acquired NBC Universal, making it a major content player in the market.

NARRATOR: We can’t wait to show you what’s next.

HARI SREENIVASAN: But new companies are starting to threaten media veterans like Comcast and their service models. One of those is Aereo, which allows customers to stream live free TV to phones and computers for a monthly subscription fee, but without paying a cable bill.

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The CEO and founder of Aereo, Chet Kanojia, says that there is a transformation under way in the media industry.

CHET KANOJIA, Aereo: The goal of Aereo was to create an alternative, to create a parallel system almost, if you will, because the current system in which you get television is a highly integrated, monopoly-based sort of system.

HARI SREENIVASAN: But companies like Comcast and other broadcasters have taken Aereo to court, saying it’s stealing content. So far, Aereo has prevailed in two decisions in federal court. The battle over Aereo is not the only clash of late.

Earlier this month, Time Warner and CBS reached a deal over how much that cable company would pay the network for the right to transmit CBS’ content. During the summer, CBS was temporarily blacked out for a month for Time Warner systems in eight markets totaling three million viewers.

HARI SREENIVASAN: You have said multiple times that TV will change more in the next five years than possibly ever before. Explain that.

BRIAN ROBERTS, Comcast Corporation: Well, you have this fantastic moment in time with all the technologies progressing so quickly by iPads or tablets that the last foot may be wireless.

You have Wi-Fi getting better and more ubiquitous. In the case of Comcast, we’re taking a lot of our technology into the cloud, so you don’t need a new box every time you want to innovate. And it’s all speeding up. And so it’s an exciting, invigorating time for the industry and for the consumer.

HARI SREENIVASAN: So, is the definition of television kind of changing back into that of an appliance? It’s just a bigger screen to view this content?

BRIAN ROBERTS: I think the definition of television may be that, but I think the definition of what the consumer gets and what the consumer expects to get is every piece of content whenever and wherever they so choose to have it. Sometimes, it’s — quote — “free.”

Sometimes, it’s part of a bundle. Sometimes, it’s pay-per-view. Sometimes, it’s all about advertising or search. But one way or the other on whatever device you want, we like to get as much access as possible. And that’s what I think Comcast’s strategy has been all about for about five years.

HARI SREENIVASAN: We’re seeing a general decline in cable subscribers, but we’re seeing an increase in broadband subscribership.

So, do you see a tipping point, where the economics of cable television as we know it today are challenged because more people just want the pipe? They don’t necessarily want to pay for…

(CROSSTALK)

BRIAN ROBERTS: I think that’s a bit overblown.

I think we still have as many customers basically as we started the year. So, I think the consumer is still saying, I want live sports, I want all those channels. Some customers say, I don’t need that. But most customers do. And it’s really important we stay in touch with our customers and try to over time have more packages and flexibility than perhaps we have historically offered. And that’s part of that tension that is healthy that is going on in the marketplace.

HARI SREENIVASAN: So, I recently moved to New York, and I had to sign up for cable. And it was one of those scenarios where I actually don’t watch the other 52 channels the you’re selling me. I just want these six. Is unbundling ever going to happen?

BRIAN ROBERTS: Well, I look at PBS.

If you had to pay separately for just PBS, probably, sadly, not a majority of Americans would do that. So there’s many channels, whether it’s Discovery Channel or C-SPAN or many, many others, that just aren’t viable. You can’t just buy the sports section of The New York Times. You take the whole paper.

So, that’s been the historic model. That’s what advertisers have wanted. And that’s made it the best deal for consumers. And every study that — most every study I have seen supports that economic rationale.

But there are some things that are getting very expensive. And if there’s a way to say to some of our customers, you don’t have to take everything, here’s a different package, we are trying to do that. We have been experimenting with that. Other companies are as well.

HARI SREENIVASAN: One of the significant disruptions that’s on the horizon is this tiny startup called Aereo. And, essentially, they say, listen, we’re the extension of an antenna, that we are not in violation of the spirit of the law.

And, obviously, content producers, distributors, including, in one lawsuit, PBS here in the New York market, all say that’s not the case. But why are they wrong?

BRIAN ROBERTS: There is a law that says you have to get the consent of that broadcaster before you can retransmit their signal.

And that’s what CBS Time Warner was all about that, that CBS retransmission fee. So here comes a company that says, I don’t want to pay that fee. Well, I understand that, but I don’t think that’s the law of the land.

HARI SREENIVASAN: So, let’s say we have this conversation 10 years from now. What does the television landscape look like?

BRIAN ROBERTS: You know, I wish I had the perfect crystal ball, but I think for the last 30 years, we — nobody’s ever been able to say quite what’s next.

So if I had to guess, there’s going to be a lot cheaper device, tablets if you will, whether it’s eyeglasses or watches or a little bit of everything. I think personalization is clearly a trend. I want what I want. It’s my TV, my device, my phone, so we’re doing a lot of that.

Speeds are mind-boggling. The capacity of storage is mind-boggling. So our bet as a company is to try to be part of broadband, be part of Wi-Fi, have a wireless relationship, have a content relationship, and trying to touch as many parts of that changing landscape as possible. But I think it’s going to be very exciting. Consumers are going to love it. And I can’t wait.

HARI SREENIVASAN: All right, this is from the Internet audience. A lawyer in Seattle asks, “Can Mr. Roberts see a day where there are no traditional networks and merely streaming options?”

BRIAN ROBERTS: Well, anything’s possible, but will there be a lot of choices that don’t involve networks? Absolutely.

But even you’re starting to see on the Internet, if you look at YouTube channels, there’s themes and there’s ways to get to content that in effect is some of the function of a network. And I think that there’s — it’s hard for me to imagine a world with no networks in 10 years.

HARI SREENIVASAN: Do you think the Internet will become a utility, just like power and water?

BRIAN ROBERTS: You know, I hope not.

I don’t think regulation is the answer and the government setting standards. I think it’s a race to innovate. And if you look at the last 10 years, it wasn’t — one of this — innovation, whether it was a tablet or whether it’s our cable box getting smaller and more powerful, and now taking the DVR and putting in the cloud, so you can have it on any device, these things are all changing because there’s less making it like a utility and more a competitive industry, where you’re on edge, you’re excited, but you’re racing.

HARI SREENIVASAN: Brian Roberts, thanks so much for your time.

BRIAN ROBERTS: My pleasure.