The cable television industry is signaling that it’s not going down without a fight.
In an effort that’s part public relations and part research, leading cable operators are opening a new research center in the Silicon Valley to look for ideas about how to save their industry from online video.
Led by the cable industry’s think-tank CableLabs, based in Louisville, CO, the new center expects to work with startups, established firms and universities on how to remain relevant in the era of online video.
Cables needs to “get re-energized,” Jerald Kent, chief executive of Cequel Communications and co-founder of Charter Communications, told Reuters. “Part of the message is this is not your grandmother’s cable business.”
The new facility will open in mid-2013 and consolidate CableLabs’ current office in San Francisco. It will create “an innovation funnel,” said Phil McKinney, CableLabs’ CEO. CableLabs currently has 175 employees, of which 100 are engineers.
McKinney joined CableLabs last June after spending more than nine years at Hewlett-Packard. He wants Silicon Valley companies to consider cable as a powerful platform for their products and services.
Time Warner and Comcast Cable will also be active in the lab. CableLabs will be hiring more engineers in Silicon Valley for the new facility and transferring some staff from its Colorado office.
The cable industry is grappling with several problems. While having a persistently poor service reputation, it now has new competition from Internet services like Netflix and Hulu. Hundreds of thousands of American homes have dropped their cable or satellite subscriptions in 2012 alone. Many feel the blame, in addition to new competition, lies with the continuing poor economy.
SNL Kagan estimated that the industry generated $97.6 billion in revenue last year from more than 57 million subscribers. But the industry has also lost a steady number of “cord cutting” customers in the past few years.
The new lab in the San Francisco Bay Area will seek to learn how to serve younger audiences in a more relevant way in light of the fast adoption of mobile smartphones and tablets.
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