It’s been a good couple of months for cable companies. Comcast is buying NBC; TW Cable’s stock is having a nice run and Cablevision’s profits tripled in the third quarter.
What’s most striking is how effectively they are leading their enormous customer base into the new world of on-demand, time-shifted television viewing. VOD usage is showing double-digit month-over-month growth and DVR subscriptions are soaring. (Driven much by cable’s efforts, more than 1/3 of US TV households now subscribe to DVR.)
The DVR story is actually quite compelling in its own right. Maligned by the advertising and programming communities for its ad-skipping capabilities as recently as a few months ago, DVRs are now seen as a powerful ally, adding millions of viewers (now tracked by Nielsen), giving some faltering shows new life and adding much needed ad revenue to the networks. That’s right – adding ad revenue- because, it now turns out, only 50% of DVR users actually skip the commercials.
In a recent blog post, Mark Cubin wrote with religious fervor about the enormous opportunities created by DVR technology:
"Do you not realize that the DVR is the one device that can save all things traditional and holy to your business and stock price? That the DVR is what every internet based TV delivery device or service aims to be when they grow up? That the more powerful and feature rich that you allow DVRs to become, the sooner your customers, the people that pay an average of what, $80 dollars a month to consume your content, will realize that all the capabilities that the internet pundits predict that the future of the internet will offer, are available today for the DVR ?"
The cable operators are making every move to be sure they control their own destiny as video consumption habits change with breathtaking speed and dozens of competitors eye the ultimate prize of the living room TV screen. (Including, now, game consoles like the Xbox 360 and PlayStation 3.)
Comcast and TW Cable's still somewhat nebulous TV Everywhere plan has captured the attention and imagination of the media blogosphere. Through an online authentication system, TV Everywhere will provide cable customers access to premium cable programming online anytime they want.
Like VOD and DVR, TV Everywhere could become another enormously successful product that keeps the cable companies firmly in front of consumer viewing behavior and at the top of the video distribution food chain.