CTAM SUMMIT On Their Marks

Cable networks eye the one-stop shopping future of subscription services.

Having survived the scare of upstart satellite television networks grabbing the early lead in pay-per-view programming in the 1990s, cable TV executives vow they won’t be caught with their pants down again.

Tremendous opportunities are emerging in the convergence of the Internet, entertainment, and telecommunications industries, and the cable industry realizes it must reevaluate its marketing strategies to sell itself as a one-stop shop for customers.

That was the main theme of the Cable Television and Marketing Association’s Digital Gold Rush Summit, which drew more than 2,000 of the cable world’s best and brightest to Boston in July.

The conference kicked off with a keynote from Robert Pittman, ceo of America Online, Vienna, VA, who warned cable executives entering the online world that they’ll need to shift gears for the new medium. “The television business wants to market with flash,” said Pittman. “But what works on TV doesn’t necessarily work online, where consumers don’t like it when you take control.”

While the cable industry is used to dictating terms to both consumers and advertisers, growing alternatives are putting power back into consumers’ hands. “Choice and convenience will dominate from now on,” Pittman said. “It’s about entertainment `when I want it.’ That’s why consumers want 100 different channels when they really only watch 15. Brands and convenience will be the only factors that keep a new audience.”

Some marketers see the future marriage of television and the Internet as the perfect advertising platform. “The participatory nature of online is a great way to sell,” noted Robert Friedman, president of New Line Television, New York City. “People already play Who Wants To Be A Millionaire online and vote online for the MTV Awards.”

More Than Marketers Future marketing initiatives must find ways to customize for the individual, according to Cox Communications ceo Jim Robbins. “Consumers want bundling,” said Robbins. “If they want one bill, give them one. If you can get one guy in there to set up everything – phone, TV, computer – that’s going to give us a dominate position, and provide tremendous cost-savings. Every new customer for Cox today costs $1,000 to acquire.”

Advertising packages will change as original programming gives way to pay-per-view models. “Ten years from now, video will be 50 percent of the business,” predicted Robbins.

The summit also addressed the potential future drop in ad revenues facing the cable market (which hit a record $3.7 billion this year). For brand advertisers, pressure is coming internally, as ad dollars are distributed more thinly over a growing variety of advertising choices.

“Advertising budgets are getting the minority of dollars today,” said Paula Sneed, president of Kraft Food’s Glenview, IL-based e-commerce division. “Now is not the time for us to polarize and start fighting over an increasingly smaller pie.”

Other speakers called for cable networks to take a more direct role in working with advertisers, rather than just serving as a conduit for the message. “We need a renaissance of creativity, and we’re not going to find it on Madison Avenue,” said David Verklin, chief executive officer at Carat North America, New York City. “The 30-second TV spot is endangered. Today it costs $300,000 and it’s a mini-movie production. In the near future, we’ll be cranking out 10 commercials at $30,000 total and using what works best.”

Rather than create promotional spots for women’s cable network Lifetime, Carat developed an informational series on breast cancer awareness. The programming attained a rarity for advertising: It boosted the brand and did some social good in the process. (Viewers wrote the network thanking them for the program.) A similar PSA-ish effort called “Our Lifetime Commitment: Strong Women” generated more than $2 million in ad sales from local affiliates, Verklin said.

MuchMusic USA, Bethpage, NY, the “other” music channel, used the CTAM Summit to announce MuchMusic Frontrow Concerts, a new program that enables cable operators to showcase their broadband and digital services.

For example, AT&T Broadband will co-sponsor a Hanson concert at Chicago’s House of Blues in October that will be made available to Windy City AT&T customers through local access channels. The show will also be customized for broadband delivery to AT&T’s local cable modem customers.