Industry and this gathering. Reflecting back on the days of catv, and forward to the broadband era, is to trace an amazing path from Community Television to the expansion of television, and now beyond to broadband. You deserve congratulations for what you achieved as cable companies, as Video Companies and as network builders. You also deserve Straight Talk about what it means now that you are first and foremost broadband companies. You have pledged as an industry to assure that the internet remains open and free. In that goal, we are in violent agreement. We do differ on what that means. We part company, according to your recently filed motion papers, over the socalled internet conduct standard, the requirement that Internet Service providers not engage in conduct that impairs an open and free internet. And goes beyond the obvious bright line rules of blocking throttling, and paid prioritization. The internet conduct standard is the Going Forward rule. Often people say to me, tom i know that you wont do anything crazy in this internet conduct standard. But what about those people that follow you . My response is, i take you at your word. That you will protect an open internet. But what about those people that follow you . The purpose of the Internet Order is not to create an Obstacle Course to test the ingenuity of isps and how they structure certain activities. It is rather to address broad outcomes, not just the bright line rules of blocking, throttling, had paid prioritization. The purpose of the general conduct standard is to address effects that are antithetical to the concept of openness. Namely to not unreasonably interfere with or disadvantage access to the public internet. So too with the application of title ii to interconnection arrangements. On june 12, when this order goes into effect, there will be in effect strong protections to shield against harm to an open internet. And from that point on, we cannot go backwards. Now, beyond the open internet, i want to celebrate today the two great accomplishments of this industry, accomplishments that run from your roots to today and one great new challenge created by your revolution be on Cable Television to become the nations dominant broadband provider. Part one of the story begins with the primary business of Cable Systems when it was video. Cable was an investor in infrastructure, a fierce competitor, and an innovator. The first accomplishment of that era was the coaxial wiring of america. It is something that took an enormous effort by what began as a remarkably entrepreneurial but also fragmented industry. It required a tremendous amount of Civil Engineering and a tremendous amount of ingenuity to me the extraordinarily diverse circumstances of our farflung nation. And it was accomplished against the determined opposition of a telephone industry that recognized from the very beginning the threat inherent in the second wire into the home and office. And it was accomplished despite legal constraints from the industrys offerings that were downright hostile. Is everybody in this audience knows, the investment that set the foundation for todays industry was undertaken for purposes that have almost nothing to do with what the industry has become. What began as a coaxial cable network, designed to retransmit distant broadcast television signals, has become literally an essential part of our countrys infrastructure. The metamorphosis began when sport engineers recognize that fiber and Coaxial Networks could become by to produce very high speed transmissions. In the intervening 25 or so years, the resulting hybrid fiber co. Ask network has become an enviable combination of Cost Effective efficiency and scalability. It has become the enabler of one of the most transformative developments in human history. In the process it is also provided an illustration of the challenges of the challenge, of the challenge and response nature of competition. This is a theme i have tried to focus on during my time at the fcc. For every challenge, there is always a response. Two decades ago, as the cable industry began to expand its broadband capabilities, the telephone industry responded by unleashing dsl a technology that had long existed but had not been deployed in american homes. Both cable and telco customers benefited, and both businesses flourished. The resulting telephone and cable competitions helped bring us to where we are today. Vastly better transmission speeds, and an unimaginably larger and more vibrant internet ecosystem. The second great accomplishment of your industry was the expansion of programming that you and to be fair, the dbs industry, that your Distribution Network facilitated. The great increase in programming is a reflection of an effect that your industrys Entrepreneurial Energy and investment have had on the broader ecosystem. Good Distribution Systems do that sort of thing. They invigorate new uses. Todays viewers may not be fully conscious of it, but the increase in the quantity and quality of programming according to professor david waterman, the most astounding chapter in the history of television. That story can be told in a quantitative fashion as well. The number of Cable Tv Networks has grown from a handful in the mid1970s to over 900 today. The fcc itself stopped counting at 565 in our annual video competition report for 2006. In investment terms, Cable Networks spent only about 250 Million Dollars on programming in 1983. 30 years later, that figure exploded over 26 billion. More than twice the spending of all the National Broadcast networks combined. The result is in a normas inventory of programming. That expansion of programming is seen and heard in shows that push the boundaries of creativity. It also greatly expanded sports programming. We remember when it was the game of the week, and that is all you could see. Now you can watch the Ohio State Buckeyes every week all the way to the national championship. You knew i would get ohio state in here somewhere. If some say this is truly the golden age of television. It is you that made this possible. Like your entry into Internet Access in the 1990s, the creation of so many programming possibilities in this century spurred others to respond including new and potential competitors who use your broadband pathways to deliver video to their customers. Last year at this gathering i said you had become more than about video. That you had become broadband, and your new business had become and would be going forth broadband. Thats true. Last year the cable industry hit a critical Tipping Point. In 2014 and for the first time, the number of cable broadband subscribers exceeded cabletv subscribers. The trend has continued. You have wisely changed the name of the cable show to emphasize the internet. There is a more profound name change going on. You are no longer the cable industry as Michael Powell said yesterday. You are the leading association of leading broadband providers. It is something to celebrate. The recent decision of comcast and time warner to abandon their proposed merger has relevance to this point. Brian roberts leadership and his poignant statement that it is time to move on was not only a thoughtful response, but it was also directionally correct. It is time to look forwards, not backwards. The department of justice reached the conclusion that this proposed transaction would not be in the public interest. It is important to understand that the Tipping Point from cable to broadband came while this transaction was under review. We recognize the industry had changed, and we saw concrete evidence of the new competition and Business Models made possible by highspeed Internet Access. In other words, we recognize that broadband had to be at the center of our analysis, and that video was an application that flows over networks, and that could be supplied both by the owners of facilities and by competitors that use of broadband pathways to compete against the owners of those broadband pathways. This shift has implications far beyond this transaction for the industry at large. When i appeared before you in the Second Quarter of last year at the moment when this Tipping Point was actually happening made happening happening, i made two points. First, i said that we have to assure the openness of Broadband Networks and the internet for all lawful uses. Im living up to my commitment at that time. You can be assured that i will raise this issue every time i am invited to address and an cta address an ncta conference. It is to engage an unusual situation. The only way to maintain that situation is to uphold your responsibilities. Now your principal business is broadband. The service you offer is critically important to all americans. From getting and keeping a job to staying in touch with family and friends, accessing entertainment, engaging in government, not to mention doing schoolwork if you are a student and countless other applications. And the broader ecosystem you help support is extremely important to the creation of american innovation, the growth of the american economy. No as you have changed, so have the issues and the obligations and the opportunities. This is the key challenge for your industry. First, to continue to invest and innovate so that the United States has firstclass rock band transmission broadband transmission. Second to live up to the commitments you have made in the open internet debate to avoid discriminatory acts that will impair the value of broadband and affect the internet for those who make use of its manifold possibilities. There are some factors that can complicate meeting these obligations. We dont have a lot of competition. Especially at higher speeds that are increasingly important to the consumer of online video. A fully competitive marketplace would bring with it intense and constant pressure, pressure to improve just as it did in the days of cable dsl competition. More competition would be better. And that is why we granted the preemption petitions filed by two communities that wish to expand their Gigabit Networks in the surrounding areas, including those where people had no broadband at all. Now i recognize the challenges of overbuilding. To encourage it is not to assume its immediate appearance. And while i know that it is an anathema to your geographically defined way of looking at the industry i believe as some in the industry have already demonstrated that it can also be an opportunity. Let me tell you a story. Many years ago, at ncta when we were trying to grow out of the catv is less, we passed out little lucite paper with papers in which were embedded small, dried flowers. And imprinted on those paperweights in gold capital letters was, plant a flower in the vast wasteland. By bringing competitive alternatives to television viewers, this industry did just that and the video business was changed forever. Then your industry went on to upgrade, to compete with the telcos and dominate broadband. Now the question is whether consumers will have competitive alternatives for broadband. To harken back to what you did before, will you now plant a flower in the competitive broadband desert . I know the only rationale for such an investment is to generate economic return. That is why in the open Internet Order we constructed it so as to put broadband providers in a situation where they could profit from the value of their investments free from any limiting rate regulation. History proves that absent competition, a predominant position in the market such as yours creates economic incentives to use those use that market power to protect her traditional business in a way that is ultimately harmful to consumers. This was chairman powells message in his well celebrated silicon flat iron speech, in which he identified four internet freedoms that were essential for the industry to preserve. This was a recognition repeated often since and most recently in the open Internet Order that it is not just useful, but necessary to ascribe rights to the users of the internet Distribution System visavis the owners and operators of the system. Your challenge will be to overcome the temp tatian to use your predominant position and broadband to protect your traditional cable business. The internet will disrupt your existing business model. I know im not telling you anything you dont know and you know you can take that to the bank. Because it has done that to everyone. My thought today is that you have disrupted your business twice before on the path from catv to cable programmers to broadband. Those who stay on top are the ones who embrace change. In ways large and small, the fcc has done and continues to do what it can to encourage your industry to meet its broadband related challenges and responsibilities. Large measures include the open Internet Orders freedom to secure a return on your investments, while also prohibiting actions that would harm the open internet. The open internet requirements are intended to safeguard the internets dynamism by assuring what your companies that pledged that the internet will remain open and free. The commission has its work to do to clear obstacles to competition. We will proceed to consider whether to adopt a technologically neutral definition of a Multichannel Program to stricter distri butor, and to be candid, i favor a technological neutral definition that includes internetbased companies that choose Business Models that fit in this status. New obligations from congress are also focused on competition. An Advisory Committee is working hard to deliver a report by september on the critical question of security that promotes commercial availability of devices. We must begin a rulemaking to review how to apply the totality of the circumstances test to assess where the retransmission consent negotiations are being conducted in good faith. On these issues, we will seek your comment. We are committed to empowering competition. And one more important thing that has come into focus following are open Internet Order, i intend to ensure that you do not confront excessive rates for pole attachments. Today the Wireline Competition Bureau is issuing a short Public Notice calling for comment on the pending ncta petition for reconsideration seeking to clarify the commissions intent reforms for pole attachments. Once the record is refreshed, my expectation it is that a recommendation will be made to the full commission to take any action that it can to further align cable and telecommunications rates. I know this industry, and this association do not support the recent open Internet Order. As i have made plain hopefully throughout this presentation today, i believe the rules we have crafted provide what is needed to enable an economic return that will justify new investment and secure an open internet. But i also believe that we can note where we agree and not only where we disagree. This year Michael Powell told congress that, quote cable broadband providers are unequivocally committed to building and maintaining an open internet experience. We welcome that pledge. Maintaining, improving, and protecting the broadband Transmission System is the right thing to do. America depends on it. Thank you very much. [applause] ladies and gentlemen, please welcome the moderator for this mornings first panel. Media and entertainment reporter for cnbc, julia boorstin. First, james dolan. Next the president of Cox Communications pat esser. The president and ceo of liberty global, michael freed michael fries. The chairman and ceo of time warner cable, rob marcus. And the president and ceo of charter communications, tom rutledge. I want to thank you all for joining us or this morning. And on the heels of chairman wheelers comments, i would like to have your react to them. First, we have to address the elephant in the room. I think you guys maybe can work out some deals in the next half an hour. Anything you want to discuss . Tom where is brian . Seriously, and a day m and a, what is the next by thing . Tom we are poised for time warner now and we are not going to comment any further on m a. Tom the world is full of possibilities, but i cant tell you. [laughter] you have something to say. I would like to see us move on to consolidation of markets. Rather than paying attention to the entire country or just individual operators. The one market i know best, new york, which we share, i think consolidation of that marketplace would provide a great deal of an and much more access to resources for the customer and lower prices. I think it would be a great business. Im not sure if i got asked that on a date or to get married. [laughter] i think i am proposing economy in. [laughter] host what are you proposing . [laughter] what i think is that, for instance in new york, if new york was one market, if new york was operated like one market you would see things like wifi distributed throughout the entire marketplace. And that very Important Technology would become ubiquitous through the entire marketplace. The be quick the ubiquity of how customers react in that marketplace provides a lot of efficiency and there would be a lot of opportunity for innovation. Host what would that look like . You compete a lot with verizon fires. No. New york is one marketplace. If you look at marketplaces, los angeles, chicago, etc. If they operated as one operation, there is a lot more we could do. Host what do you think, tom . Tom i agree. The deal that we had that did not work had a lot of trade swaps and a logical putting together of assets so you could get the scale, even at the local level that you need to be a Quality Service provider and to rollout products in a way that are efficient and innovative. The industry is still in a state because of the way it grew up have a lots of tv marketplaces where the efficiency of the platform isnt being fully realized. That is true throughout the country. There are scale opportunities all throughout the business that are not being realized. Host where do you fill in on all of this. Pat i feel like i am on match. Com. [laughter] we are all trying to update our relationship status right now in front of 10,000 people. I dont think anybody is going to speculate upon what we are going to do on a stage in front of a lot of people. At cox enterprises, if we believe in the space, we have consistently made acquisitions did the right thing for the business longterm. We are very committed to it. I agree with the concept that there are scale and benefits for consumers if we fit the markets like pieces of a puzzle in the industry. Michael i am baffled by the chairmans remarks. And im baffled because he does not regulate my business. [laughter] i am very curious. On the one hand, he says the true consolidation, true scale innovation of programming as a close network, yet there is a presumption of guilt and a punishment of success that this industry has achieved that i have never witnessed before in my life. [laughter] for years, i asked european regulators and European Business folks to look at the u. S. Market for guidance. That is not happening today. European regulators are also baffled by what is happening here. On the issue of scale, i will tell you that we are able to achieve that in a country like holland, which is only 7 million homes. We can own those homes, and and and regulators end to tenend, and regulators see that. And we do not have assume some action that may be harmful, but just in case we are going to do these things. It is terrible regulation. Host do you think there are lessons to be learned in the u. S. From the way European Regulation has been handled . Michael what european realtors have focused on is infrastructure competition, a light touch, and have not arbitrarily identified as identified broadband as we five makes. There is a number of things that the u. S. Market could have learned. Is it too late . I dont know and that is not my game here. You guys will find out. But we are happy to be abroad. Lets put it that way. [laughter] host icu knotting. I see you nodding. Tom we still are a video business, broadband business. We are a Communication Service provider. When we started building our net worth with fiber optics, we were not building them to build brand but broadband. We were doing it to build telephone. What people call the broadband market today, 15 years from now will be a different kind of product set. And what we call ourselves will be different. And the way we describe our products will be different. But our networks and the capability of the Digital Infrastructure that we have and our ability to provide Quality Service is where the opportunity is. I find these artificial distinctions interesting academically. But they are not what i think about from a marketplace perspective. Host rob, it looks like you have worked hard to grow video subscriber numbers. Rob i want to comment on one of the thing. Unlike my, i have a business that is related by the chairman. I feel like we operate in a different environment than he seems to live in and in my world, broadband is incredible competitive. I think the competition has in fact fueled a tremendous amount of investment on our part. And it is investment that we continue to make day in and day out to make our broadband product better. So i wonder what the problem really is. We are making broadband more and more capable. That is reflective of the success of the environment in which we work. Michael the cable industry here are any aware in the world that does not embrace the platform is crazy. Tv everywhere is at a Tipping Point. The fact that i can watch my extremity go xfinity go app anywhere in the world, if that is not a Distribution Platform for video, i dont know what is. I agree with you. I dont think that is an accurate refection of what is happening here. Rob so let me get to your question. We embrace overthetop video. We think it is a fantastic application of the broadband capability we deliver. We welcome and we try to facilitate great experiences for our customers on that front. We long ago abandoned focusing on individual products as opposed to Customer Relationships. We are committed to growing Customer Relationships. We want to sell as many customers as many products as we can. We want to expand the breadth of our Customer Base and sell them as many things as we can and that may not all happen at the same time. A Broadband Customer today may be a triple play customer tomorrow. Similarly, a video customer today may be a triple play customer tomorrow. Of course, every individual one is important. We are very proud of the fact that we grew video customers escorted. Post before we talk about overthetop host before we talk about overthetop, i want to get some reactions to wheelers comments. How problematic do you think title ii is to your business . Pat our industry has industry has illustrated that we are dedicated to the principles of that. We dont block sites. We are not choosing which bit comes to your home. We have been demonstrating that since 1997, 18 years. Title ii is different. It is taking a business that is heavily funded 23 billion we have invested in our Network Since 1997. And we are taking all of this investment and all of this risk and the rules get changed. While we are totally expose and continuing to invest in our network am all of a sudden the rules get changed. The rules were written in 1932 apply to a business in 1930 two apply to a business. We have only seen early signs that, within weeks after title ii coming out of the fcc, we are already seeing fees go up. We see a new classification of taxes. By legal costs are going up. The legal structure we have to put in place for all the legal filings and complaints they go through this process. And my customer pays for that. I just dont think it is needed. It is unnecessary. Common gain was a president ial candidate. Herman cain was on the air the other day. He says there are three things you know about our government. If it doesnt move, they will funded, sustain it, create programs to support it. If it moves, they will tax it. And if it moves too fast, they will regulate it. I feel like we created this American Dream [applause] i agree. And somewhere we got out of sync with the regulators. And weve got a find a more balance. Jim i agree with what pat is saying. For cablevision, we are in a very competitive marketplace. I dont see any of these regulations affecting us much at all. The competition is what regulate our markets. He did say the competition is what was important. One of the things i thought i heard the chairman say is something akin to governmentsubsidized competition. Which i think is very dangerous. Host one thing you have been focused on his aside idea disrupting the traditional tv bundle. It seems like you are embracing cord cutting with some of your new offerings. Jim we are embracing the customer. We did on accounting study and we attempted to associate all of the direct indirect eggs expenses with our products. We found that broadband outperforms video by 71. For every dollar profit in making video, i am making seven dollars in profit in broadband and. And we see the customer is wanting more and more broadband and wanting better and better conductivity. They wanted in their homes. They wanted outside of their homes. They dont want to wait. And if it breaks, they want service immediately and fixed the first time. Those are the things we are focusing on. Host you just shook your head. Rob i was shaking my head because i could not really here jim. I think the reality we are all dealing with is, to the extent of behavioral trends, that there are ways of consuming content , our business depends on enabling customers to get what they want when they wanted, where they wanted, and how they want it. I think those of us who embrace it will be the one to succeed. Host what does the future look like . You have your eyes and with its custom tv bundle now being sued by espn. Use you have verizon with its custom tv bundle now being sued by espn. I am curious to hear what the successes of the slimmeddown bundles. Tom, what you think . Tom there have always been cord cutters. Most to have cut cords in the prior periods before Internet Television was available would cut to go over the air. They would cut for personal reasons. They were about to move, go to college or come back from college or for economic reasons, personal reasons. That has always been going on. And the cable industry has tried it various times to put different packages together to satisfy people, mostly incomerelated, with television services. And if you sell the product to people that isnt what they expect in terms of the full access to the services that they in their minds think of as cable, they dont stick very well. These markets are very fluid. People come in and out of it. The more variety and package functionality that you can provide the individual, the better you are as a coveney because you are satisfying somebody. And peoples needs change through time. I think what is going on now is you have some products that are coming direct to consumer, some coming in packages that we sell. You can mix and match those together and satisfy niche customers. People who buy hbo, people who buy showtime, some people dont and fact, the majority dont. People have always had choice in their prescription package. How you put that together is what we do to satisfy people. So where it comes from, whether it is overthetop or part of a cable service, it really doesnt matter. What cable is is three different regulatory regimes for bits and two copyright regimes for bits. And how you mix and match that as satisfy customers is the art of being a good packager. Mike we are not burdened by the historical order the cost base that customers are burdened by. We are in the business of plug and play. We are in the business of seamless connectivity. In our case, across wifi and mobile. We want customers to feel connected to our networks wherever they are and we want them to choose our networks because they are the fastest, the best, the most reliable. On top of that, we want them to play on our networks, play more or less, depending on what it is they want to do, play with content, the internet, any aspect that is offered across that network that you are choosing, and on all devices. They are becoming device agnostic. My kids watch their content on tablets are smart phones. They dont care where it comes from. What did nothing teach us . They told us it is principally about the app, the user experience, the user interface. We have adopted an app essentially that puts that plug and play expressed together and allows you to search for content, find content in a way that you are used to doing on other applications. We and we preempted ott a little bit in europe. We watched our own version called my prime which is better usage and its available on all devices. If you keep it simple and offer consumers what they want, why would they get rid of one or the other . Pat there is more video consumption going on in the world than ever in any time in our history as a country or the world. Much of that is because of the investments that companies sitting on the stage have made. The point is, we ourselves have given our customers more places more devices to view their content, and one of their is the broad bad Network Broadband network. This release of innovation as long as i am in the business of connecting customers to the things they care about, im ok. Host but the question is do you need to be in the business of selling them a bundle pat you mean a video bundle. Sometimes they will and sometimes they will not. Rob we are in the business of choice. There is a tendency to conflate two different concepts. What is packaging and the other is Technology Delivery means. The reason we tend to conflate them is, for some reason, the deal the programmers have cut over the top providers seem to be more flexible than the ones that have been cut with traditional Video Companies. I think that is a temporary state of affairs. On the simple question of packaging, i think more flexibility is better. We offered different tiers of service for many years. By a large customers the vast majority of customers tend to take the larger bundle. The reason is it is a damn good value. Host the Manny Pacquiao and Floyd Mayweather fight was pirated in a brandnew way. Piracy has been around for a long time. It is an internet problem, not a periscope problem. Live sports have been an integral part of holding the bundle together. Are you worried about these new technological threats breaking apart the content . Tom buying content wholesale a la carte is less expensive for us than buying it in packages from content companies. But the big issue Going Forward which you are referencing is that security is a big problem in the digital age. We have very fast highspeed networks, storage that you can buy a getting cheaper everyday so people can keep content and move it around the world instantly. Thats true even of live content because of two way networks. So the security of content and how content Companies Sell their products and whether they are secure are not and ultimately what we are paying for is a real issue. If they dont secure their content, it wont be worth much. That is the lesson we saw this weekend. Rob the thing that was exploited in the retransmission of the fight this week and was actually the analog hole. There is no way to close that. If i can see it, the digital device can see it. It arose out of a mess transmission of something that it was otherwise that was otherwise to be seen by another person. Im not sure how to solve the problem security wise. But for all of us who live in this ecosystem protecting intellectual property is critical. Host looking down the road as consumer demand changes companies will have to data to changing consumer needs. There are panels going on here about new millennials and the kind of its petitions they have and how they want to consume content and how they want to pay for it or not pay for it. How does that change your business . Pat they want access, flexibility, different size packages, multiple screens different technologies. These are real. That is now the world we do business in. If we dont manage it properly or watch for digital rights, they will still exist. There are good reasons why those apps are being used here in one thing i do agree with what the chairman is we had a number of moments in our history where we reinvented ourselves. I think we are we still have those moments in my career Going Forward. I take cox look at our company say, man, what is going on . We have more markets rolling out in the next few months. Business services is on the cusp of hitting 2 billion in growth. We talked about Customer Relationships. We found most of the results from my public friends, we are growing Customer Relations as an industry. There are a lot of good indications that shows the future is very bright and we should be excited. But we have a technological change to deal with. We are going to grapple with that as we go along. We are going to take a couple of steps forward and a step back as we go through this process. Mike we have great content relationships. Together, we spend 10 billion every year with great content providers. The app allows that content to be accessed easily on multiple devices by kids, by consumers who want it simple. As we invest all of us in that experience, i think we solve a big series of issues that are good concert good conversation. The experience can and should be incredible and will be. With verizon go, they dont go anywhere. I watch my kids on the x one app. They dont go anywhere. We got it. Host i know you have been working outside the traditional Cable Systems with your new introductions. Is your future all about broadband . Jim we look at traditional tv. We look at it sort of like a convenience store. It is the milk and the eggs and you got to have it. But for the future of cablevision, we will continue to innovate in that space and we will continue to offer those products in multiple ways, including two millennials who only watch an hour of tv a day. From what we know is most important to them, its conductivity. That is where we are going to focus. We are in a highly competitive market and we want to be the dominant provider. So we will focus on what people want the most. Host certainly a Tipping Point for the industry not just in terms of mna but also in terms of the products you are offering consumers. Thank you for joining us today. [applause] announcer ladies and gentlemen please welcome our next panel, which will also be moderated by julia horst and. First, the chairman and ceo of showtime networks, matt blank. Next, the chief executive officer of ethics networks and Fx Productions, john landgraf. And the president and ceo of amc networks incorporated, josh say can josh sapan. Julia thank you, guys. Im sure you are listening backstage. There is a lot of talk about overthetop and how the cable carriers are not worried about cord cutting because they also sell broadband. But for you, you have to think about cable, both for retransmission fees but also we need to grow our business. The traditional distribution is very mature right now. Right now, one of the key soundbites where they announced they now had more broad brand subscribers and video subscribers there is a clear message. It is critical. We intend to grow households, and we need new ways to do that. So i would not say we are worried about courtcutting there is opportunity and a lot of the marketplace to grow showtime. Julia what you think . We need to get to the consumer. Courtcutting is a terrific catchy term, and i think it is not as ubiquitous as people think it is. What is true, and that was reflected on the Previous Panel, the interface by which people find Great Stories and content is shifting over time. Essentially, what we are working towards is having an interface that is comparable to the best interfaces in the field. Julia you must be watching a lot of hbo now . The Previous Panel was encouraging to me. Because i think the changes that are being made are intended to free up consumers from obligations. When they do that, it is a more pleasurable experience. It is more fun. A lot of that stuff which sounds disruptive and different and recapture the imagination for the consumer, he or she can feel better about what they are buying. They have more flexibility. Focus on what my friends call the app the interfaces are not really face less. When you get a great one, you just love it to death. If you combine that with the feeling that you can get what you want, and i think cablevision is doing that, your motivation increases. I think you consume potentially even more. I find it encouraging. Julia the question is whether or not you want to go directly to consumers. Showtime is working on a nap. You can get updates. We havent talking to everybody. Most importantly, i spent a good part of the past two years talking to every Cable Company about the math of bringing showtime to their current distribution universe the of broadband. It is a good place to start. We think there is a lot of opportunity out there. And we are to take it manage of it. The question is, when is the right time, or the right players . That is something we will be talking about shortly. Julia hbo has been the market for about a month, we dont know the exact numbers. Are there lessons to learn . To finish on that, the one tremendous advantage we have seen we have seen it with showtime anytime. Consumers are getting used to buying all sorts of products whether it be an uber ride or dinner tickets. That is something that it has an industry we have not experienced. We could bring an application like showtime anytime out there. You see what the differences when you can present your product with an interface which is consistent with the types of products that are being consumed due to all the changes in technology. That is a big deal. I think what we are all chasing, the number of broadbandonly was tremendous. It is got to be a large enough to share the market that each of us who has a National Consumer brand, and these are three great brands, has to Pay Attention to that smaller segment of the market that is now only broadband. We have to figure out the methodology. I dont want to discount the pathway through our existing relationships with cable operators, who were also in the broadband business. The truth is, the symbiotic relationship has served us really well for a long time. We have a problem. We have a group of 10 million homes, probably 20 million by 2020, we have to get there. Direct to them is a path. But there is also a path that goes through broadband and an evolution of our existing relationships. Julia i watch all of your shows. I can watch them on netflix and amazon. There are all these new ways one can consume the content. Do you see that eating into the course of driver number . I think you can see that there is a lot of nonlinear consumption of the very best content. Between our three brands, we have a significant percentage of the best content. We also own a lot of that content and we benefit from the consumption aftermarket. Weve been focused very aggressively to preserving the first window for our cable partners. And providing really good we have the stacking rights for full season in episode rights for all of our shows. About 20 original series. We want to add to our apps. There is tremendous value in the backend marketplace. It is largely replacing syndication. Julia ownership of the content is integral. We started Fx Productions more than a decade ago. If we were in the business of renting, as opposed to owning, we cannot make the numbers work. But ownership turns out to be a terrific business on a domestic and global basis. We have businesses that are good at marketing shows and owning their shows is a boon. I would have no executive objection to seeing our shows captured by our own programming services. In the way that hbo go does it. I would have no problem capturing that there was an economic pathway to doing it. We are in partnership with content creators. And theyre going to go where they get the most creative freedom, the best marketing, and were they get paid the best. Syndication revenues which are increasingly domestic, revenues are critical to compensate the artist. Julia you have this walking dead behemoth. Doesnt matter in terms of ratings or advertisers, that show has been their unique in that Live Programming event. How do you encourage that or drive that or keep that show alive . And what is at value of the live event . In the current advertising regime, which is undergone some modification, and it may undergo further modifications, is how the count goes in the money flows. The other phenomenon, of watching when something is scheduled there are these opportunities to watch at your own choice on different machines. It is a curious one. We are seeing an effect that is both an empire at the moment, which is increased ratings at 10 00 p. M. Every sunday. It is occurring now. I think it is to some degree in response to a greater growing trend of people watching alone on a machine, and binging and taking advantage of all the improvements in facility. But it does miss out on community. So there is a big lot of fun of course when you watch the super bowl live or the academy awards. But theres a lot of fun when you watch the walking dead. And then you watch the show the talking dead. You are seeing that experience in empire. Theatrical productions with music and peter pan i think there is an oddly Bright Future that will be defined with greater specificity about what wins at a time slot. It is a totally cruel timeslot, because it is in service of people being together. It zigs against the zag of on demand. Julia to go back to your question with john. Looking at this environment with netflix and all of these competitions in the home. We see something, the more things change the more they stay the same. We have a heavy user dynamic for the better part of 30 years in multipay. In certain households, it is just one we look at hulu, netflix, amazon prime the index high in our homes. You can take a glass half empty or half full. The halffull, which i prefer to take is the heavy user. And we are fortunate to exist in that precious space where that audience is saying, give us more. Give us more of this great, you know serialized dramatic content. As much as we can get. The advantage we have in particular not being in an advertising driven environment we really dont care how someone watches something. The example i always use is dexter. It is been off the air for a year or so. 10 years ago, we lost theaunched the show a third of it was delayed. When it went to the final season a year and half ago, it was a complete reversed. I third of the viewing was alive and two thirds came on demand and dvr, other places. And yet, and a final season, we had three times the viewing of season one. That said that our ability to use this technology to manage the platforms creates tremendous value for showtime subscribers. Julia is a shift in measurement for you . When you are trying to negotiate with advertisers . How broken is the measurement . It is more difficult and that the fundamental advertising model is due for massive reinvention. I think ultimately what the consumer is telling us is they are not willing to give us 15 minutes of their time to watch an hour or 45 minutes of our content. They are willing to give us quality time for a relevant ad. And i think im actually bullish and excited about the ability to reinvent overtime. But that said, that is absolutely true. The viewership of our shows has gone up. When you count all of those various different streams. Ultimately, while we have an advertising issue that i think is going to be very dynamic, very transformative marketplace it is going to be different five years from now. I think the business of making Great Stories that engage consumers and being paid for those stories is as good as it has ever been. I dont see going anywhere. Ultimately this comes back to creativity and storytelling. I think that the mode of interaction is vital to the consumer. Obviously, no one is going to be able to corner the market on great storytelling. It refuses to be growled into one single bucket. You could come back here in a decade, and these three brands will be very healthy. And there will be others. Julia i want to hear about the content and decisionmaking. What is your outlook for ad spending . Hows it going to handle the fact that there are competitors like netflix stealing eyeballs . I think there is an evolution underway. It is an evolution. The appeal of digital, which has not withstanding some measurement issues associated with it. I think it has some precision that as advantageous. Coming us into cable advertising, it is getting much more specific. The data opportunities for being able to sell someone wants to sell a product are improving dramatically. It will not be like it was. It will actually be tremendously more efficient for people who spend the money. That is occurring as a consequence of all the data that is being collected and now organized and seen. Specifically through settop boxes. That is a great situation. I will echo what john said. They are so popular, and they have so much inherent appeal. That they really do have an overused word high engagement. Think about what your favorites are. And you think about how much you like your favorites. I waited with phenomenal anticipation for the comedians. I value those with rapt attention. But that is not lost on people who spend money. And so, i think when you have things that are favorites, i think you have something that is unique and premium. When you combine that with improving analytics, you have a pretty good proposition for someone who spends money because they want to move a product. I think you have an odd imbalance in the marketplace that josh alluded to. The standard the ability for a 32nd commercial, a full view commercial with audio, and the standard with digitally delivered video is 50 of the pixels. That standard is in position. I talked to you about the video internet standard. They cannot continue. I want that sharpened up. Supply will contract and a marketplace will normalize. Julia when you look at the changing ways people are looking and been watching on netflix or on amazon or itunes, the you think that showtime will ever release all his episodes at once . I will never say never. We still like the model of premiering the show, seeing our viewership built over a 12week. Period. Seeing all of the social activity from week to week. We could switch that tomorrow if we felt it made sense. But the moment, we do not. We watch the consumer very carefully, you watch all these things. And we are very happy with our current model. But we are 100 flexible. We do not have to wonder about what impact that has on the advertising environment. We have a lot more flexibility to move more quickly if we had to. It is also unreasonable to assume that all the different demographics that we address are going to behave similarly. You can wait 12 weeks and watch homeland all at once if you want to. And this season, when we see an uptick and people watching previous seasons on demand there is a lot of different types going on. We want to take the most advantage of the marketplace. Julia what is the impact of programming decisions . When youre trying to make the decision of what new show to at the lineup or what to give an extra season, how are these decisions impacted by the changing landscape and the consumer . I think it is a very good question. What it does is put a lot more pressure on us as programmers. To look at all of the information, how people are using our service. I will tell you, john talked about it at length. We own most of our programming now. And that is incredibly important, not just in terms of really significant incremental revenue that we have generated over the last year of particular from ownership, but also the possibility it gives you to make decisions about how this programming is going to be distributed. We dont have to worry about whether a studio will let us do something. I think actually, all of the stuff makes a better chance. Because in the old world, when it was 6, 7, 8 9 you either caught it or you did not. If it was nuance, and you missed it, and it was a story that unfolded over time youre out of luck. I think there is now a huge bias towards good and great. Julia what is good and great different now . I could not agree more with what josh and matt said. Television used to be somewhat disposable. It was made for the night or weekend when on air. Now, we make stories and we are evaluating if they will be relevant 20 years from now. It is more like film an asset that we continue to return, from a financial standpoint. It raises the creative bar. You might ask yourself, will people watch is on a sunday night . You ask yourself, can we imagine two people sitting in a room talking about the show 10 years after it is all the air . That is a much better question. When you combine that with the need to own, and really is treated conversationally. You wait for your friends to either say electronically or directly, you ought to go watch blank. You havent seen it, you ought to catch it. If it is somewhere available through a good point of access in the reservoir of digital stuff, i want to watch the best stuff and find it. You will see a lot longer than it used to be. It is not the syndication, i am traveling and can watch a comedy when im exhausted. In this world, it is a fairly big upside for the business. Julia the social conversation the watercooler people telling their friends on facebook and twitter. Does that have an exponential effect then . Tremendously. There are leverages for the good. I asked rhetorically, how many times does the show you check out refer to you by a friend who made the suggestion that you should watch it. And how many times when you finally got to it, sometimes you said not for me. And sometimes you said, this is good, i will get into it. I think the system is a new system. But it is quite functional. If you can think about how movie marketing used to be everything. You could make a mediocre movie but if you marketed it really well, you get a multiple of three times the box office. Now, marketing does not mean much. People figure out whether or not movie is any good. We are faced with the same thing. You have to make an intelligent series. The best marketing is wordofmouth. You dont get that unless the show is great. We had a movie called it was very quiet. And very small. And hardly had a big opening weekend. And it built and built because of its quality. It was tremendously enhance my social. When john is saying is true, but is also true for movies and all forms of media. Julia unfortunately, we are out of time. But when can i buy a showtime after . Right now, you can use showtime anytime with a description from your cable provider. [laughter] julia thank you the three of you for joining us. [applause] in his weekly address president obama talks about his initiative creating opportunity for all. And how he plans to address property and economic opportunity. Senator john mccain discusses trade legislation and the republicans response. And his response for the authority and the negative implications of will have on the u. S. Economy and national defense, if it fails. President barack obama hi everybody. Everything we have done over the last six years has been a pursuit of one goal creating opportunity for all. What we have long understood is that some communities have consistently have the opportunity odds stacked against them. That is true in rural communities, some manufacturing committees that suffered after the plants closer doors. It is true of some suburbs and inner cities were jobs can be hard to find and get to. That sense of unfairness and powerlessness has helped to fuel the kind of unrest we have seen in baltimore and ferguson and new york. It has many causes. From a basic lack of opportunity to groups feeling unfairly targeted by police. Which means there is no single solution. There are many things that can make a difference and help. We have to do everything in our power to make this countrys promise real for everyone willing to work. At a summit organized by catholics and evangelicals, i sat down with a conservative scholar and a policy expert to talk about opening more doors for opportunity. We know our efforts matter. Since