TV viewers may soon enjoy thousands of channels rather than a mere 500 as the Internet develops as an alternative to TV, according to Michael Bloomberg, president and chief executive of Bloomberg Financial Markets, a growing programmer of business news.
Bloomberg represented a contrarian view among the four speakers on the opening panel of the cable industry's annual trade convention meeting in Anaheim, which has drawn a crowd of roughly 24,000 from across the country.
The mood at the convention, which ends today, has been generally downbeat, as the cable industry is under attack by digital satellite television, burdened with huge debts and low stock prices, and has repeatedly delayed the roll-out of new services.
Bloomberg provided the spark in the opening session, chastising cable operators for being obsessed with a lack of channel capacity when there is limitless potential on the Internet, especially with new modems that will provide connections a thousand times faster than phone lines.
"If cable modems catch on, it will allow video-on-demand on the Internet," said Bloomberg, who launched his own 24-hour business news channel on cable and satellite systems, with real-time stock quotes and news stories, that runs on financial terminals provided to about 68,000 customers.
"There is not a Web site out there without video and text, and the technology is improving exponentially," Bloomberg said.
The other panelists, and even moderator Paul Kagan of Paul Kagan Associates, a market research group in Carmel, took Bloomberg to task.
"You have set a new record for the only speaker at a cable convention who has out-hyped Ray Smith," said Kagan, referring to the head of Bell Atlantic in teasing Bloomberg about his relentless plug for the Internet.
Peter Barton, president of Liberty Media, which owns stakes in cable channels such as Discovery, BET and Fox Sports, disputed Bloomberg's predictions of video-on-demand on the Internet. "With 10,000 users, the pipe chokes," he said.
When Terence McGuirk, the head of Turner Broadcasting System, stated that no company other than Time Warner/Turner had figured out how to make money on the Internet, Bloomberg responded, "We have 68,000 customers paying $1,158 a month."
Bloomberg offered a contrarian view of the competitive threat from the phone companies, whose plans to enter the video market continue to be delayed. "Not many of us believe in anything the phone companies are doing," McGuirk said.
Bloomberg, who after the session proclaimed that his fellow panelists have their heads in the sand, said the cable industry is missing the point. "Telephone companies are out of the content business but they are the biggest threat to cable. They are simply going to rent out their infrastructures to people who want to use it."
The panelists seemed to agree on one thing: Cable networks are going to lose money if they continue having to pay system operators to be carried.