While Michael Turk and I were poking around the floor at CES, the cable networks were presenting at the Winter Television Critics Association Tour. Our NCTA colleague Helen Dimsdale files this report.

Cable just concluded two-and-a-half days at the semi-annual TCA Critics Tours staged at the Universal City Hilton Hotel in L.A. (January 8-10).   More than 13 cable networks previewed their upcoming new or returning series along with films and other programming announcements.

Cable networks are embracing green screen productions and several networks shared features currently in the CG production pipeline.  First up, Starz is working on an action drama series Spartacus, slated to premiere summer 2009.  Spartacus is the story, similar in tone to Gladiator, of a slave who became a hero rising to legendary status when he found a conscience and took on the Roman Empire.  Spartacus utilizes the latest green screen technology, computer generated images (CGI).  Thanks to advances, digital intermediate process allows production to reshape images and colors.  Unlike the monochromatic coloring of Sin City or the unrealistic body image distortions depicted in 300, CGI enhancements will take the viewer to the next level.  CGI is good news for the viewer and provides significant cost savings to the programmer. [Editorial note: Spartacus is an actual figure from Roman history, although little is known of him. Howard Fast's 1951 historical novel was turned into the 1960 film starring Kirk Douglas and directed by Stanley Kubrick.]

Current TV had an impressive line-up of new and returning content.  The satirical series InfoMania returns.  This news-format show puts a comedic spin on the 24-hour chaos and information overload courtesy of today’s media.  InfoMania airs on Current TV every Thursday at 10:00 p.m. (EST) and on-line at the conclusion of each show.  On a serious note, Current TV re-ups Vanguard, a 60 Minutes style documentary program with journalists identifying underreported issues and stories, nationally and internationally.  This show is not for the faint-of-heart, but for viewers who crave factual and honest news from around the Globe.  Vanguard is a weekly feature series.

Another tech-savvy executive, Jeffrey Katzenberg from DreamWorks Animation, has teamed up with Nickelodeon to produce an animated comedy series spin-off Penguins of Madagascar, scheduled to premiere in March 2009.  Using new CGI animation, Penguins of Madagascar picks-up where the hit feature Madagascar:  Escape 2 Africa left off.  The feature will be produced at Nickelodeon Animation Studio.

TLC introduced a new reality series NASCAR Wives, which follows the most popular sport in the US.  Audiences will get an inside glimpse on the families and friends that participate in this weekly sporting event.  Unlike the The Real Housewives of Orange County, this show will share the spouses’ challenges as they balance superstar husbands, raising a family and their own careers.

HBO has a new comedy series, Eastbound & Down premiering February 15.  From executive producers Will Ferrell and Adam McKay, Eastbound & Down stars Danny McBride (Pineapple Express) as Kenny Powers, a star pitcher whose self-destructive behavior knocks him out of major league baseball and back home to North Carolina teaching Phys Ed at the middle school he formerly attended.

Comedy Central had plenty of high-jinks with Jon Stewart’s announcement of Important Things with Demetri Martin. A stream-of-consciousness sketch and variety show from comedian Demetri Martin (The Daily Show with Jon Stewart), scheduled to air February 25 on Comedy Central.  Another comedic series introduced by Comedy Central was Krod Mandoon and the Flaming Sword of Fire.  An outrageous live-action, character-driven show set in an ancient fantasy realm, the series follows reluctant hero Krod Mandoon (Sean Maguire), a thin-skinned and under-confident freedom fighter, who is the last great hope in the struggle against the evil ruler Chancellor Dongalor (Matt Lucas).  From saving the world to bad hair days, the series premieres April 15.

We’ve written about the so-called “Digital Migration” on quite a few occasions (Check this post for links). Again, for the short version, there are two transition taking place right now – the digital TV transition for full-power, over-the-air television stations, and the cable industry’s efforts to transition analog channels onto digital cable tiers, in order to reclaim bandwidth and serve consumers with more and better services.

Since the word “digital” is in both of these transitions, even though digital TV and digital cable are two different technologies, some confusion has occurred. For example, earlier this week, Thomas Kraemer wrote on his blog:

I was surprised to see Comcast doing a mandatory switch to digital cable at the same time over-the-air TV is switching to digital. I thought they would phase it a year later as a way to keep cable customers. At first I thought they might be trying to exploit the confusion over the digital TV transition to free up some bandwidth by eliminating analog TV channels that they could replace with more profitable bits.

See also Brier Dudley at the Seattle Times writing on his blog.

In fact, cable’s transition has been happening for some time and will continue after February. Some consumers have mistakenly assumed that cable’s assurances that its customers need probably do nothing during the DTV Transition were incorrect.

Good news today for all those folks. NCTA has sent letters up to Congress today to announce some moves that should help clear up the confusion. First, here’s a relevant quote from our letter:

… we recognize that the overlap between cable’s digital migration and the broadcasters’ DTV transition scheduled to occur on February 17, 2009, inescapably adds a layer of complexity and the potential for consumer confusion.  We are determined to address those issues.

The cable industry has gone to extraordinary lengths to help make the broadcasters’ DTV transition as seamless as possible for consumers.  Our industry was the first industry to run a national education campaign on the DTV transition and has already aired over $225 million in public service announcements entirely devoted to educating consumers about the broadcasters’ transition and the availability of converter boxes and government-supplied coupons.  Alone among multichannel video programming distributors, cable operators will also ensure that all commercial must carry broadcast signals are formatted for both digital and analog customers in accordance with rules set by the FCC (rules that were, in fact, based on a voluntary plan first proposed by the cable industry).

Even with those efforts, the cable industry has been asked to consider taking additional steps to help smooth the DTV transition. In response to these requests, cable operators represented on the NCTA Board of Directors (who own and operate cable systems serving ninety percent of the nation’s cable subscribers) have committed to the following:

• Digital Migration “Quiet Period.” To minimize consumer confusion during the DTV transition, operators will delay the substitution of digital versions of existing analog channels from December 31, 2008, to March 1, 2009, except to the extent necessary to free up bandwidth to comply with the requirement to carry broadcast signals in both analog and digital formats or meet contractual carriage obligations.
• Analog Broadcast Basic Tier. Operators that offer dual carriage of broadcast signals would make access to the analog broadcast basic tier available under a promotional offer to new customers who subscribe just to that tier. This offer would be available beginning December 31, 2008, and would continue for at least 120 days after the proposed quiet period – through June 30, 2009. The service would be provided at the promotional price for at least one year after the customer subscribes.
• No Additional Charge for Equipment or Service. Recognizing that there is likely to be continuing consumer confusion even after the February 17, 2009 broadcaster DTV transition, operators would also provide the following additional assistance to all-analog cable households during and for at least 120 days after the proposed quiet period – through June 30, 2009 – to help them manage cable’s digital transition. If, during this period, an operator removes the analog version of a PEG or other channel from the broadcast basic or expanded basic tier and replaces it with a digital version of the channel on either of those tiers, the operator would make available to all-analog households, upon request, at least one free device that enables those households to view the channel. The device provided under this program would remain free for at least one year. There would also be no additional service charge for at least one year for the affected channel or, at the operator’s option, the broadcast basic or expanded basic tier where the digital version of the channel has been placed. Individual operators may choose to continue this program after June 30, 2009, or to initiate other similar programs after that date.
• Clear and Conspicuous Customer Notification of Any Channel Migration. Whenever operators cease transmitting analog PEG or cable programming services and begin offering those channels only in digital, they will provide clear and conspicuous notice to affected subscribers and franchising authorities not less than 30 days in advance. The notice would also inform subscribers that they have at least 60 days to avail themselves of the offers described above.

I hope this will help consumers during an admittedly confusing period.

There was a column in the L.A. Times yesterday from David Lazarus entitled: “Let’s pay only for the TV we watch.” So, once again, back we go to the topic of “a la carte” cable service.

I get it. It feels like much of the content world is going to a pay-only-for-what-you-want model. Certainly, it feels right emotionally to only pay for the stuff you’re going to use. But this argument is almost always predicated on one premise: If I could pick and choose, my bill would go down.

Lazarus writes:

The average U.S. home now receives a record 118.6 TV channels, according to a recent report from Nielsen Co. But the dirty little secret of the cable industry is that the average subscriber watches only about 17 channels regularly.

That’s more than 100 channels that most cable subscribers are paying for but seldom if ever watching.

Because of the number of cable systems nationwide, it’s hard to get a fix on the average monthly bill. But many estimates place this figure at $60 to $70.

This means, if all channels cost the same, the typical cable subscriber is spending about $9 a month for the 17 channels he wants to watch and about $55 for the 101 channels he never sees.

There are big problems with the figures here, so let’s break it down.

If you’re getting 118.6 channels, that means you’re getting digital cable service, because analog can’t deliver that many. SNL Kagan estimates that the current average monthly price for digital service is $59.23 (expanded basic is $44.28), which not only provides a wide range of programming but also opens up the door to high-definition and Video on Demand.

The first important point that Lazarus overlooks is that the average cable subscriber has elected to switch from a cheaper level of service with fewer channels, in order to take a more expensive level of service with more options. Perhaps people like the greater choice that comes with digital?

For example, Cablevision recently reported that more than 90% of its video customers subscribe to digital service, which means that 9 out of 10 of its customers want more channels, not fewer. If you look at the largest cable operator, Comcast, you find that 69% of its video customers elect to subscribe to digital service. Industry-wide, approximately 62% of cable’s video customers have made the decision to receive more channels via digital service.

Lazarus continues:

But all channels don’t cost the same amount. By most accounts, the sports channel ESPN is one of the most expensive carried by cable systems, costing by some estimates more than $3 a month per subscriber. Many other channels are said to cost as little as 25 cents monthly.

I never watch ESPN. When I watch TV, it’s usually CNN, CNBC or a movie channel. On an a la carte basis, I could probably get the handful of channels I like for pocket change.

That, of course, is not what the cable industry wants.

Lazarus leaves out all of the relevant content here. Those figures he cites are carriage fees that cable operators pay programmers in order to carry those services and offer them to their customers (The real rates are found in private contracts; actual figures will vary by company and circumstances). It’s not what those networks “cost” and it’s not a reflection of what you would be charged in an a la carte world.

He also writes:

According to the FCC, average cable rates nationwide more than doubled over the last 10 years.

In fact, the FCC has not released any reports containing this information. There have been statements in the media to this effect, but the Commission has not released any reports to back up this assertion. It is irrelevant to compare today’s rates to the rates from more than ten years ago, since the nature and value of that service has changed over that same time-frame, but it is worth noting that over the last several years, the increases in cable rates have actually lagged behind inflation rates.

Read this post for the financial details, but the short version is that if each network lost the carriage they have now and then had to market and sell the channel to individual consumers, revenue goes down, operating costs go up and programming quality probably also goes down.  And the price you think you’ll pay for individual channels on an a la carte basis? You’re probably grossly underestimating it. The reason why you should pay for more than you watch is that it beats paying more to have fewer options.

Lazarus writes that cable needs to be brought “in line with the wholesale shift in how consumers now approach entertainment.” But different distribution outlets have different pricing models. If you saw Iron Man in the theaters, you probably paid ten bucks. The DVD is probably $20. Buy it on iTunes for $15 or watch it on VOD for $5. As I’ve written previously, different businesses operate on different models and it’s a mistake to assume they should all be the same.

Lazarus makes a comment early on about knowing “as a newspaperman” a little something about “outdated business model[s].” The print edition of his newspaper, the Los Angeles Times, is not sold on an a la carte basis, with the option of buying just the sports section or the business section. They did experiment a few years ago with putting their online entertainment section behind a wall and then charging a subscription fee for access. They later ended the experiment. The New York Times did something similar with its TimesSelect service. In these instances, the free market determined their actions, not regulation. Business models change over time and the models of the cable industry will undoubtedly do so as well.

If you look at the comments of this column, you’ll find some other reasons given why mandatory a la carte would probably be problematic. You could also check out some of Mike Masnick’s posts at Techdirt, such as here, here or here.

There are adults today who have never known a world without cell phones, color television or ATMs. These are people who have had cable television all of their lives (not to mention Internet access, DVRs, DVDs, and so on for a shorter period of time). This actually presents significant challenges to the cable industry.

To people who have always had cable, there is no difference between an over-the-air (OTA) broadcast channel and cable offerings. However, in both the business and regulatory environments, the difference between OTA television and cable matters. The business models are different, the ad revenue streams are different, the content regulation is different. Whether you run a local TV station or a cable system, a broadcast network or a cable net, you live with these differences everyday.

To viewers, those differences are invisible. They cruise around the channel lineup, probably not paying any attention when they’re tuned to a cable channel and when they’re looking at a broadcast station. They may be vaguely aware the rules for swearing vary between basic cable and networks like NBC, CBS, ABC, Fox, or the CW – although, as broadcast standards have changed over the years, the differences aren’t as stark as they used to be. Even if they see that distinction, they may not know this is because broadcasters use the public airwaves, while cable programmers do not.

Another example: If a cable programmer – Animal Planet, Comedy Central, Turner Classic Movies – wants to be carried by a cable operator, then that network has to make its pitch. It has to demonstrate the value it will deliver and then an agreement is negotiated. An OTA broadcaster can choose between Must Carry or Retransmission Consent status in order to gain carriage. As NCTA President & CEO Kyle McSlarrow pointed out in testimony earlier this year, “it’s not a free market negotiation.” For example, if negotiations between a cable operator and a broadcaster go badly, that operator can’t turn to an out-of-market broadcaster that carried the same programming.

You can argue that the average viewer doesn’t need to know the difference. They watch what they want to watch and they don’t care whether the programming is cable or broadcast. But you cannot ignore the impact of these differences. They can be seen all the time.

I’ve mentioned the issue of must carry/retrans, which I blogged about earlier when clashes between Time Warner Cable and broadcaster LIN TV were in the news. I’ve written multiple times about the distinction between the broadcasters’ Digital TV Transition and the cable industry’s migration to digital; just recently, my colleague Michael Turk responded to a Consumers Union letter that seemed to combine the two. I’ve written about the so-called “cord-cutters,” who aim to get all their TV via the Internet; I mentioned how little cable programming is available online as compared to broadcast television – an issue which is a direct result of their differing business models. (Will Richmond writes about this issue in more detail today.)

When discussing television, and the impact of various policy proposals, it is useful to be aware that the telecommunications and television industries are still rooted in historical traditions, no matter how much it seems like all the old rules are gone. While public policy may eventually catch up with the rapid changes of the last decade, we’re not quite there yet. We must remain cognizant of that in applying a one-size-fits-all model to services that vary greatly – whether you can see the differences or not.

We often discuss the use of technology for purposes of entertainment, but it’s important to recognize that it can also be used for educational purposes.

Our sister organization Cable in the Classroom, the U.S. cable industry’s education foundation, is dedicated to this mission: To foster the use of cable content and technology to expand and enhance learning for children and youth nationwide.

A few years ago, CIC launched the Leaders in Learning Awards (LIL) in order to recognize outstanding educators, administrators, policymakers and other community leaders at the forefront of innovation in education.

There are profiles of this year’s winners on here; there is a short video and an audio interview on each winner.

All of which is simply prelude to announcing that the application process has opened for the 2009 LIL Awards. LIL winners – who typically represent a national cross-section of cable systems, programming services, schools and other educational institutions – are recognized annually in Washington, D.C., at the annual Leaders in Learning Awards Gala, scheduled for June 10, 2009. Winners receive a $3,000 cash stipend, an all-expense-paid trip to D.C., and the chance to visit with Members of Congress and other federal officials.

The application period will expire on Wednesday, December 17, 2008. If you know of a deserving educator, administrator, public official, or community leader at any level, in all disciplines, and in all kinds of learning settings, then suggest that they enter.