Who/What Are We?
By The Phantom
We’ll warn you up front: we ain’t telling you nothin’ this quarter. Well, maybe we’d better explain pronto, before you stop reading. We’ve been thinking about where the industry is going and where it came from. We’ve been haunting cable TV for long enough that we’ve seen several metamorphoses. In order to understand where you are going, you have to understand where you came from and what drove changes. Then you have to understand the changes going on around you today and figure out where that is going to push you in the future. Nahhh, I ain’t gonna tell you anything new, but maybe I’ll make you think a bit.
When we first haunted the industry it was divided into two basic product categories: headend and distribution. Maybe a third product category was test equipment, if you count the one piece of equipment made for cable TV testing as a product category. The headend products consisted mainly of a processor for taking signals off the air and putting them on the cable, a small number of demodulators for taking off-air signals to baseband and getting them ready to microwave, and a few modulators for those hearty systems who wanted to program a channel themselves. Maybe microwave gear fit in this category, though much was really borrowed from other industries, with cost reductions to make it suitable for cable. Distribution was divided into several sub-segments: amplifiers, coax, and passives for splitting the signal and inserting power, as well as the power supplies (30 volts back then). The job of the mom-and-pop outfits that bought all this gear was to get franchises from municipalities to build a cable system, fight the enemies in the power and phone companies for the right to put a coax cable on their poles, figure out where and how to get TV signals, and put in the gear to get them. Then go out and try to sell subscriptions for a few bucks a month.
The industry grew, requiring more products and expanded skillsets. Set-tops were a major product category; go back to the late ’70s or so and there were a bunch of companies producing some form of a box, with scrambling needed to let you sell HBO and/or Showtime as add-on pay services. This product category coalesced to two companies for a simple reason: it was hard, and profit margins were small. People decried the duopoly, which had incompatible scrambling systems, because once you chose a supplier, you were locked to that vendor for the duration.
What was the driving force for industry change during this time, which lasted roughly from the ’70s to the first wave of the digital era? Mainly, methinks, it was success; the industry went from a small, rural bunch of renegades who made do with a shoestring (and got laughed at by the telecom industry), to being a legitimate part of that telecom industry. During that time, most of those mom-and-pop companies coalesced into a few large corporations. One of them now owns a TV network that used to be the giant bothered by this gnat of a kid.
So what’s driving the monstrous change we’re experiencing now? Success is still there (thankfully), aided and abetted by competition and changing consumer preferences. So now we have to think how to best equip ourselves, both corporately and individually, for success going forward. The industry made an incredibly good move when it embraced high-speed data early-on, and clearly this is where the action is now. We are still the largest player in the video distribution business, albeit with lots of new competition, all using our data service to distribute their programming. Drat! Just as we were getting to the new part, we find ourselves smack-dab out of space. Well, hopefully we gave you something to think about.
The Phantom
the.phantom@youwontfindmeanywhere.com
You never know when The Phantom is standing right beside you. Sometimes he is in a meeting with you or walking the floor at your favorite cable show. Sometimes he’s hanging with the suits and other times with the front liners. But be assured, The Phantom sees all, The Phantom knows all and, most importantly, The Phantom tells all.
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