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CABLE SHAPES UP! Members of CableFit #teamplatform at NCTA get ready to run a St. Patrick’s Day 8K road race, spanning the U.S. Capitol grounds and National Mall on March 9, (back row, l. to r.): Julie Hance, Ethan Buch, Frank Gallagher, Kristin Buch, Steven Morris, Lisa Hamilton, Scot Donaldson, Rob Stoddard, Rick Stoddard; (front row, l. to r.): Kelly Allers, Kat Stewart, Esther Song, Carleigh Blewett, Lisa Otto.  NCTA’s team finished 11th in a field of 54.




November 1, 2007

Where Does Bundling Stop and Convergence Start?

Here's a little pop multiple choice quiz. When asked, "What's the best part of the bundle?" who said, "It's definitely video. That's what people want. It's the on-demand library and the ability to get all the content that they want. It really is content, high definition."

A). Brian Angiolet, executive director of marketing for Verizon FiOS.
B). Christopher Albano, director of product engineering, Comcast
C). Mark Chinn, vice president of marketing and development, RCN
D). Mark Kaish, vice president of voice strategy and development, Cox Communications

If you guessed B, Christopher Albano, give yourself an A for knowing the cable industry and the way some MSOs think. Comcast, despite pushing high-speed data and voice and even venturing into the commercial space, and despite being a multiple threat provider, as Brian Roberts recently tried to spin it, is a video provider first and foremost because "video-on-demand, pay-per-view, libraries of service are all lucrative," as Albano put it.

Albano's comment came at the end of a misnamed panel session, "Triple Play: What Makes the Bundle Viral?" at Fall VON in Boston on Oct. 30. The four panelists spent more time discussing what makes the bundle a bundle as opposed to a converged package. Viral marketing - the attempt to spread the news of multiple services using non-conventional means - it appeared, was the last thing on the minds of these men of industry. Their main interest was developing and then tossing their packages of services into a Velcro-land of consumers where they'll stick presumably until the equipment wears out.

Bundle 1.0 and on

Cox, according to Kaish, knows where it's going. The MSO "really has been the leader in what you'd call bundle 1.0 ... with inventing the bundle," he said. Sixty percent of Cox's customers are bundled in either a double or triple play, and the "bundle has been extremely effective for Cox."

The potential fourth part of that bundle is mobility, and, at least on that point, the panelists acted like the competitors they really are.

"That's one of the interesting things. I go back and forth on that," said Kaish. "Voice as a standalone application is going away ... and what's emerging is putting voice as an application, converging in. I'm really passionate about convergence and how that's going to play out."

Kaish has taken the time to consider the meaning of convergence vs. bundling - obviously an important step when moving from bundle 1.0 to bundle 2.0.

"Bundling is taking existing services and for the most part putting them on one bill or stapling in the right corner, and taking them forward ... there really isn't a lot of commonality," he said. Bundle 2.0 will "leverage across product or across applications. You really start blending the apps."

An overused term

Of course, any definition depends on the term that's being defined, and "bundling," said Kaish, "is an overused term. Convergence or blending is really the next step. The promise of fixed-mobile convergence, truly seamless fixed-mobile convergence, offers a tremendous platform to build a single number capability over time. What's important is the platform, and the whole area around fixed-mobile convergence is going to be the big thing five years from now."

It's an area that already has Verizon, with its built-in wireline and wireless capabilities, drooling with anticipation.

"It's huge for us, obviously," said Angiolet, stating the obvious then redundantly pointing out that he was doing so (clearly). "Wireless is perfect ... as you start looking at life stage segments, different generations. It's a competitive advantage for us, and it's a good foothold on the future."

It's not so great for RCN, which, as an overbuilder, was shunned by cable's joint venture with Sprint Nextel and is finding the mobile row a bit rocky to hoe.

"For RCN, fixed-mobile convergence is probably more important than it is for these guys," said Chinn. "We're closely following mobile convergence as a platform."

The service experience

RCN is also doing what some other cable operators - locally or nationally - might consider: It's emphasizing a service experience because "customers don't leave me if I serve them. We'll have to become, and already have become, a fast follower of some sort. The key is to truly satisfy the customers that you have."

Think of that the next time you call help and are told the volume of calls is so great you should call back later.

This brings the whole thing full circle to Albano's initial comments that video is the way to go. Perhaps, suggested Angiolet, that way to go went with the Baby Boomers who actually watch television and care if Chuck is the hottest new show of the fall season or just an overhyped bit of fluff.

"You look at the young adult generation and how they're doing it," Angiolet said. "Broadband wins because to them that is their delivery mechanism for content, entertainment. It's on their time and their schedule. They're wireless-centric; they're more broadband-focused."

In the hard business sense, though, they have fewer bucks for their bang than their older counterparts, leading Albano to correctly wonder ... "Which one is more lucrative?"

That question will probably be best answered when the marketing folks figure out how much they can charge for the converged services that have been developed and mashed together by the technology folks.

"You build this network to be able to deliver all this stuff, (and) you definitely can charge more," Angiolet said. "Your product strategy needs to be about being on the continuous front end of innovation."

- Jim Barthold







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