HDNet’s Cuban Tells Small Cable It Will Fend Off Netflix, Web Assault
SAN FRANCISCO -- Smaller cable operators were reassured that they'll withstand the onslaught of Netflix and over-the-top video. The words of comfort came late Tuesday from Chairman Mark Cuban of cable programmer HDNet, whose personal fortune came from Internet broadcasting. “Netflix replaces going to Blockbuster and buying the stack of DVDs that you had, because it’s primarily library stuff,” he said in a keynote at the American Cable Association’s and the National Cable Television Cooperative’s Independent Show. Cuban added “It kind of loses its cachet over time.” He said Netflix will remain complementary to cable service, because it won’t be “able to offer new content” that can compete directly with conventional pay TV.
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Cuban encouraged grumbling and even payment demands from content owners that stream online, directly and through set-tops like Roku’s, appointment programming such as sporting events and news that cable operators are paying to provide. “I don’t think it’s right to have your cake and eat it, too,” he said. “You can’t serve two masters. Sports leagues can get a little greedy.” Cuban owns the NBA champion Dallas Mavericks.
"The digital side of cable offers a lot more opportunity” than the Web does, contrary to conventional wisdom, Cuban said. “All of these promises of the interactive services on the Internet side never happened,” he said. “They're happening on the cable side.” VOD is “just exploding” on cable, because of the medium’s extremely high reliability, Cuban said. It beats “anything anyone’s going to do on the Internet side.” He gently chided his side in the battle only for “a little bit of hesitancy in the cable industry to trust what’s happening on the technology side."
The Web is held back in video entertainment by its very scope and variety, Cuban said. “There are so many competing standards” online that a video ad must be created in “umpteen different formats, he said. And “the promotion is still too expensive” to attract a reasonable-sized audience, Cuban said. An Internet series is considered a huge hit if over six months it draws 100,000 viewers, the number that his HDNet can draw all at once for a popular program, he said. There have been attempts to create original online programming for years, and the result online is “10 zillion channels and nothing’s on,” he said. All the efforts “go away at some point.”
Packaged programming will persist even as Internet-style digital transmission wins out, Cuban said. It’s fundamental that “you don’t want to search for something to watch,” he said, adding, “You don’t want to have to work to watch TV. When you watch on the Internet, you have to work, even on Netflix.” Getting to desired programming “has to be the path of least resistance,” Cuban said. He said, “People still surf the program guides” on pay TV “a lot more than they surf the Internet, and that bodes very well for television over the next 10 years."
4G represents a larger threat to the wired broadband business of cable companies than to their TV services, Cuban said. “There will be a period when people look at replacing their wired with wireless.” Downloaded applications will present an interesting challenge to online search, he said. “A lot of people … think apps will hurt Google and kill Microsoft and Yahoo. I'm not there yet.” Cuban was bullish on the HTML5 programming language as offering “a lot of opportunity for cross-platform development.”