Time Warner Cable tests tech to hold viewers

Effort intended to stem defections to TiVo services that are killing traditional linear programming.

Reuters

May 5, 2005 5:00 a.m. PT

3 min read

SAN FRANCISCO--Time Warner Cable is testing a new technology that could help television programmers corral audiences in an age when viewers have increasing control over what they watch, a top executive said this week.

Time Warner Cable, a unit of media giant Time Warner Inc., is pitching an on-screen digital navigation tool that will let television networks point viewers to sister stations or to new services such as video on demand.

Using the new tool, viewers can click on a pull-down menu during broadcasts to channel-surf to any number of a particular network's sister properties. A pull-down menu on CNN would point to CNN Headline News or even CNN on-demand.

The technology being introduced by Time Warner Cable, the second biggest cable operator in the United States, would aim to give programmers some measure of control over audiences, even as they have more choices.

"Envision a world where TV networks are not only programming their linear service, but also part of the video-on-demand server," Glenn Britt, CEO of Time Warner Cable, told Reuters in an interview at the annual cable show in San Francisco this week.

Video-on-demand services and digital video recorders are seen undercutting traditional linear programming schedules, which networks use to set advertising rates. Advertising-supported television continues to drive the bulk of programmers' sales.

"If you're running one of the many networks, you spend a lot of time worried about the schedule," Britt said. But by adding video on demand, "the whole way TV networks are programmed, when you have linear and VOD, will change and evolve to ways consumers like," he said.

Video on demand also could sap revenue from reruns shown in syndication, which helps program producers swiftly recoup development costs, analysts have said.

That hasn't stopped the $50 billion cable industry, which delivers television services to more than half of U.S. homes, to aggressively push ahead with plans for on-demand services.

Cable operators gathered in San Francisco at the show sponsored by the National Cable Television Association this week are pushing new products from digital telephones to wireless devices to gird against competition from telephone companies intent on entering the video market. Video on demand has been positioned as a service that could help prevent subscribers from defecting to satellite television providers.

Over the next few years, cable companies are expected to lose market share to satellite television competitors DirecTV Group and EchoStar Communications.

For Time Warner, its new video-on-demand push would be a third try at offering shows on command.

Technology behind Time Warner's new tool was originally developed for another ambitious, but ultimately doomed service, called Mystro, which aimed to give viewers a radically more expansive trove of shows and movies.

Time Warner never launched Mystro TV after it ran into complications securing copyrights to shows.

Time Warner's new onscreen navigators, which have yet to be named, are being tested in a small market in North Carolina. Time Warner Cable is in early discussions with programmers. Britt said CNN, another unit of Time Warner Inc., has already signed on for the test.

Time Warner Cable is also set to test a new service, called Startover, that lets viewers who miss the first few minutes of a show, start from the beginning of the broadcasts.

"We've barely begun to exploit the technology," Britt said.