PricewaterhouseCoopers Report Recommends Revenue Growth Opportunities to the U.S. Cable Television Industry

PricewaterhouseCoopers Report Recommends Revenue Growth Opportunities to the U.S. Cable Television Industry Cable Operator Success Depends on Solid Triple-Play Delivery and Customer Service Differentiation in Near-term; Compelling On-Demand Platform Roll-outs in Longer-term NEW YORK and LAS VEGAS, Jan. 24 /PRNewswire/ -- NATPE 2005 -- PricewaterhouseCoopers today released its state of the cable television industry report titled, "Big Bets for the U.S. Cable Industry: Key Opportunities for Future Revenue Growth," at NATPE 2005 Conference & Exhibition at Mandalay Bay Resort in Las Vegas. The report assesses challenges confronting the U.S. cable TV industry and offers perspectives on growth opportunities for both operators and networks. The report finds that for cable operators near-term growth will come from non-video services such as high-speed data and telephony. Additionally, operators should pursue growth in local advertising revenues. PricewaterhouseCoopers recommends that cable operators: * Anticipate a true telecommunications carrier video threat. Having already made significant investments in network modernization, cable operators should aggressively market their broadband access and voice- over-IP (VoIP) services before the incumbent local exchange carriers (ILEC) catch up. * Focus on a solid triple-play execution and pursue wireless service to add to the bundle. Cable operators should consider collaborating with mobile operators not tied to an ILEC to offer a bundle that incorporates wireline and wireless service. * Develop and communicate the value proposition of on-demand platform. With deep relationships with both cable networks and consumers, cable operators have a critical and unique role in making the on-demand platform a compelling offering and a success. * Consistently improve and deliver high-quality customer service to fully realize the benefits of investments in an upgraded infrastructure capable of delivering a triple-play bundle. Customer service differentiation will be essential to acquire and retain customers. "The U.S. cable TV industry is at a crucial turning point as competition intensifies among cable operators, telecommunications carriers, and satellite operators to provide multi-channel TV and other services," said Ted Schaefer, partner, PricewaterhouseCoopers LLP. "Cable operators must respond quickly in this battle to 'own the home' by taking advantage of their current position and offering a solid bundled service offering of video, voice, high-speed data -- and even wireless. Longer term, operators must develop the value proposition of the on-demand platform for both consumers and cable networks." PricewaterhouseCoopers' report also provides analysis and recommendations for cable networks, suggesting that in the short-term they should place their bets on developing and airing high-quality targeted programming and seeking to expand advertising revenue streams with new marketing and sponsorship deals. Those networks with strong brands and large content libraries should leverage syndication and brand extensions, as well as develop business models for broadband and mobile Internet content delivery. PricewaterhouseCoopers recommends that cable networks: * Invest in the highest quality programming content. In addition to its positive impact on a cable network's brand and market value, the development and popularization of a small number of hit original programs will generate syndication revenue opportunities. * Develop a richer stable of original broadband content that takes full advantage of the high-speed Internet, adding to its appeal as an outlet for exclusive content as well increased throughput. * Develop strategies for taking advantage of the increasing number of video outlets. The emergence of the on-demand platform, broadband Internet, mobile Internet, and digital video recorders (DVR) has increased consumer options for video content consumption. * Engage advertisers in the value of targeted advertising via the on- demand platform. Networks and advertisers will then have access to more accurate and detailed customer data for targeted and effective advertising. * Diversify the advertising stream through unique marketing and sponsorship opportunities associated with programming. "While the rise of DVR technology will not cause irreparable damage to the television advertising marketplace, this is a wake-up call to both the networks and the advertising industry," said Peter Winkler, global entertainment and media marketing director, PricewaterhouseCoopers LLP. "The traditional 30-second TV ad format needs to be supplemented by innovative sponsorship and marketing efforts between broadcast and cable networks, advertising and media buying shops, talent agencies, and corporate marketers." The report's findings incorporate analyses and viewpoints from senior executives at A&E Television Networks, Comcast, Time Warner Cable, NBC Universal, DIRECTV, ESPN, Fox Networks, Oxygen Media and Showtime Networks. For an electronic copy of the complete PricewaterhouseCoopers report, Big Bets for the U.S. Cable Industry - Key Opportunities for Future Revenue Growth, visit the "publications" section at http://www.pwc.com/e&m. About PricewaterhouseCoopers PricewaterhouseCoopers' Entertainment and Media (E&M) practice is comprised of a network of more than 3,000 practitioners providing audit, advisory and tax services to help clients manage risk, maximize shareholder value and support M&A activities. It addresses business challenges for its clients, including developing strategies to leverage digital technology; marketplace positioning in industries characterized by consolidation and convergence; and identifying new sources of financing. Known as an industry thought leader, the E&M practice publishes the annual Global Entertainment and Media Outlook and other surveys and white papers highlighting current and future trends in the industry. The E&M practice is part of PricewaterhouseCoopers' Technology, InfoComm, and Entertainment & Media (TICE) practice. PricewaterhouseCoopers (http://www.pwc.com/) provides industry-focused assurance, tax and advisory services for public and private clients. More than 120,000 people in 144 countries connect their thinking, experience and solutions to build public trust and enhance value for clients and their stakeholders. "PricewaterhouseCoopers" refers to the network of member firms of PricewaterhouseCoopers International Limited, each of which is a separate and independent legal entity. Source: PricewaterhouseCoopers CONTACT: Laura Schooler of PricewaterhouseCoopers, +1-646-471-3229, laura.schooler@us.pwc.com; or Ray Yeung, yeung@braincomm.com or Jill Gumberg, gumberg@braincomm.com, both of Brainerd Communicators, +1-212-986-6667, for PricewaterhouseCoopers Web site: http://www.pwcglobal.com/ http://www.pwc.com/e&m ------- Profile: International Entertainment