Top Ops Award Finalists Click to jump to section.
MSO of the Year
In Mediacom’s 20-year history, 2015 is one for the scrapbook. Strong revenue (up 3.7 percent year-over-year) combined with significant PSU gains of 70,000 units helped drive record free cash flow of $222.4 million. That’s up just over 10 percent from 2014. Even video was looking up, with losses narrowed to 35,000—its best stat since 2008.
Oh, and as CEO Rocco Commisso is quick to point out—Mediacom became the 5th largest MSO this year without a single acquisition thanks to consolidation. Not that a shopping spree would be much of a problem for the company, seeing as it has paid down $716 million in debt since going private in 2011. “We have never been at this level of leverage in my entire career,” says Commisso, who is keeping mum on whether he has his eye on anything.
“Being able to drive our balance sheet leverage approaching 4x and with the help of the financial community and smart transactions, we’ve been able to drive our cost of debt among the lowest, if not the lowest, in the cable business,” adds CFO Mark Stephan. “That’s great bragging rights, but in dollars and cents, we can fund capital spending and re-invest in our business.”
Mediacom is doing just that, announcing in March a $1 billion capital investment plan that includes deployment of one-gig services to virtually all three million homes and businesses in its footprint. The investment also will see an expansion of the network for business customers. “We’re going to do what we did with the cable business 20 years ago. Go out and build a franchise believing we’re going to get it to X-Y-Z penetration rate. I think it’s going to be a pretty solid expansion of the commercial business services customer base in the next three years,” Commisso says.
And that $1 billion commitment has helped to re-engage the company with local franchises. “They’re excited to be partnering with Mediacom again,” says Tom Larsen, SVP, government and public relations.
While the company has been battered—along with many of its brethren—in some consumer satisfaction surveys, the numbers paint a clearer picture. “We are seeing the lowest churn levels of our customer base and the highest sales levels of our products going into the marketplace. For me, that’s really the true indicator of how customers feel,” says operations EVP John Pascarelli. “They’re paying their bills and continuing to keep our service. Our growth is a combination of better management and keeping more customers and adding new business to the network. We’re seeing growth levels we haven’t seen in a very long time.”
And internally, Mediacom also take a lot of pride, whether it’s assisting employees during tragedies or staving off layoffs or providing nearly $1 million for scholarships to the children of its employees. “I think everyone who works for us who has been around for more than a year or two knows we take care of them at the end of the day,” Commisso says. EVP programming and HR Italia Commisso Weinand points to a recent employee survey that had a 40 percent response rate. “I take great pride in that as what it says to me is that people trust us as managers; they feel they can talk to upper management,” she says. In local communities, Mediacom supports charity initiatives, provides complimentary broadband service, coverage of high school sports and more.
As Mediacom celebrates its 20th anniversary this year, it’s worth noting that the senior management team has been together for most of that time, with Commisso in the captain’s seat. “I should have fired them all a long time ago,” the CEO jokes. He knows he’s a passionate individual—whether it’s lobbying the FCC, standing up for smaller operators or defending his company’s status. “There’s no one out there who has been around for as long as we have with essentially the same people at the senior level,” Commisso said. “We have never had a down year or quarter of revenues in the last ten years.”
MSO Lifetime Achievement Award
Nomi Bergman is a leader whose rational optimism, integrity, passion and kindness have guided her to the top of one of the leading cable companies in the country. As president of Bright House Networks, which she helped launch in 2003, it’s clear she’s operations through and through. But she didn’t think she’d go into the family cable business. In fact, she initially tried to avoid it, hoping to launch her career on her own.
Her first job out of college was for Arthur Andersen’s consulting business, now Accenture, doing programming and systems development. But a stubborn cousin, Mark Newhouse, eventually convinced her to consult for Advance Publications’ Systems Group. And then, her father gave the group a bunch of cable work. “The other consultants were longtime newspaper experts, so they gave the cable work to me. So before I knew it I was working in cable!” And by the time she successfully pulled together a cross-functional team to unify the billing systems of Newhouse’s three cable companies? Forgetaboutit. She was hooked.
It all comes back to her love of operations. “It’s about making everything work altogether. And, in cable operations, we have the good fortune of working with a diverse cross section of employees,” she says. Another favorite career moment was her tenure at Time Warner Cable as VP and GM of High Speed Data Services in Charlotte, NC, where she launched Road Runner broadband. “It was the beginning days of launching high-speed data, so you were given really a license to build a whole end-to-end business,” from hiring all personnel, to creating the division’s first website to building a content strategy from the ground up. “It’s rare that you get to start with a blank slate. Those were great times with wonderful learnings.” Moreover, there was a healthy dose of camaraderie between the other Road Runner market GMs. “There were many times we had late night phone calls, to seek help with solving a problem, etc. They all helped me so much.”
When asked to name her mentors throughout the years, true to form, Bergman defers to those she’s worked with. In particular, she’s proud of the “commitment culture” that distinguished Bright House. “We were committed to our employees, and I like to think we set an environment in which it was comfortable to take risk, make a suggestion or decision to improve our approach. Our team felt empowered to take great care of our customers, and each other.” The numerous accolades Bright House collected for customer service awards are ample proof.
Another shining example of what they were able to accomplish was the company’s “Hello Friend” branding, Bergman says. “I think it’s very gutsy of a cable company to boldly say in the marketplace that we aspire to view our customers as our friends. That’s a very risky thing to do, and I think we were only able to pull it off because we had such an amazing team that really each had each other’s back.”
Part of Bergman’s success stems from her adaptability—not only in terms of her ability to navigate new technologies, but also in her talent for listening attentively to her colleagues, employees and, quite frankly, any person she encounters who might offer a bit of advice along the way. And then there’s the work she’s done for women in technology. “Leader. Mentor. Role model. These are just a few of the attributes that come to mind when I think of Nomi Bergman,” says WICT President & CEO, CAE, Maria Brennan. “As one of the cable’s most accomplished and respected professionals, Nomi has used her influence to advance the industry—and in particular women—making significant contributions to building a stronger pipeline of leaders.” For instance, she was a catalyst and founding executive/advisor to both WICT programs “Tech it Out Initiative” and the “Women’s Tech-Connect Mentoring Program.”
A lifelong learner, Bergman will undoubtedly continue her quest for personal and professional growth. So what’s next, post Bright House acquisition? She’ll work for parent company Advance, continuing to help them grow its business and investments in areas like big data. But we wonder if Bergman will be able to stay away from operating for long. Somebody might snatch her up.
Independent Operator of the Year
While some larger operators are still trying to get their ducks in a row to launch skinny bundles, Cincinnati Bell made headlines in 2016 for its launch of MyTV, with the starter bundle retailing for $30 a month.
“It was really our desire to offer more flexibility to our customers” that brought about the launch, says Michael Morrison, director of content & consumer product marketing strategy. “Historically there has been a $20 option, which is just basically anything free over-the-antenna—and then your next option is 65 or 75 bucks. So, we really built this to fill in that huge gap between 20 bucks and 70 bucks—and offer customers more flexibility. Customers have responded well to it.”
But if you think Cincinnati Bell only impressed us with its willingness to weigh in to flexible packaging waters, you’d be mistaken. When Cincinnati Bell purchased the city of Lebanon, Ohio’s telecommunications system in 2007, it served 4,000 customers. Today it has 120,000. Management credits that growth with the launch of its fiber to the home product, Fioptics. “Our biggest challenge is not being able to build fiber our fast enough,” says Morrison.
By year-end, the operator expects to have fiber available to about 60 percent of the Cincinnati area and 65 to 70 percent by the end of 2017. Just this past June, the Fiber to the Home Council Americas awarded Cincinnati Bell with its Star Award, which recognizes a person, community or company that has gone above and beyond what is expected in the advancement of fiber to the home. “The reason why fiber buildout is so important to us is that we want to own the customer experience in the home through delivering the speeds required to support our Fioptics products, or to support other connected products the customer is enabling in the home,” explains Christi Cornette, svp, corporate marketing for Cincinnati Bell.
Growing those relationships has required some creativity. Last year, the operator launched its “Connect Cincinnati” app, which let users access free WiFi in public venues. But to get the free Internet, they must download the app. In turn, the app connects users with local businesses who use it to offer coupons, promotions and contests. Cincinnati Bell customers who sign into the app get additional deals and offers. “At this point, we have 80,000 users on the app with 60 percent of those return users. We’re pretty excited about that,” says Cornette. “We have about 200 businesses on the app today and a significant backlog of people waiting to get on.”
Instead of waiting for larger operators to blaze a path, it’s in Cincinnati Bell’s DNA to lead. “Because we are small, we have to think outside the box.” says Cornette.
It’s now facing a new competitor with Charter’s acquisition of Time Warner Cable. And while Morrison doesn’t discount Tom Rutledge and team as a worthy competitor, he expects Cincinnati Bell’s nimbleness to give it the advantage. “One edge independent operators have is they can get hyper-focused in the areas they serve,” Morrison says. “That’s how we approached competing with Time Warner, and how we’ll approach competing with Charter.”
Independent Financial Executive of the Year
Wayne Schattenkerk, Wave Broadband
The numbers man for an operation that’s recently stepped up its B2B power play in markets including Seattle and Silicon Valley, Wave Broadband CFO Wayne Schattenkerk has written the playbook for successfully integrating new acquisitions.
His secret? “First and foremost, when we acquire a company our main goal is not to screw up what they’ve been doing,” Schattenkerk deadpans. “We don’t really change anything on day one; we take the time to let them operate as they’ve been operating before we acquired them and understand how they’ve been successful to date.”
This approach guided Wave’s purchase of traditional cable operators —primarily acquisitions from Charter and other indies, he says—and continues to shepherd its push into the commercial market since 2012, when Schattenkerk led the purchase of dark fiber provider Black Rock. “We left that really separate for quite a while, because it was different than what we’d historically done,” he says.
Since that time Schattenkerk and his team have crystallized Wave’s B2B strategy, focusing primarily on dark fiber providers in the company’s footprint in California, Oregon and Washington.
Two recent deals illustrate the type of strategic growth he’s mining in both markets: The 2014 purchase of Layer 42, a colocation and network connectivity provider in the San Francisco area “has been successful for us primarily because it really bolstered our presence from a commercial perspective in the Bay area,” Schattenkerk says. “The co-lo is nice, but we were really after network connectivity and the ability to get into data centers in the Bay area.”
Schattenkerk also led the 2013 deal to acquire hybrid commercial/residential company Spectrum in Seattle. At the time of purchase, 80 percent of Spectrum’s revenues came from the commercial side, primarily connectivity between data centers, with the balance yielding from residential 1 gig data offerings. “The commercial side of it has gone really well for us; we’ve grown that in Seattle and replicated it in San Francisco,” he says. “But the 1 gig offering—we’ve really taken that and tripled growth rates they were projecting. The 1 gig offering is sealing residential growth in those markets.”
“Over the past decade at Wave, Wayne has proven to be a customer-focused team leader who gets results,” says Wave CEO Steve Weed. “Recently, Wayne has led the funding of Wave’s aggressive growth plans, chaired the NCTC as it took a strong stand on tough new programming deals and continued to be a leader at driving customer satisfaction at Wave.”
Part of that finesse is maintaining strong relationships with banks and bondholders. “We spend a lot of time keeping them abreast of what we’re thinking and where we’re headed,” Schattenkerk says. “And the underpinning to those strong relationships is good performance. The fact that we continue to outperform our peers makes my job easier. It sounds cliché, but you have to be able to execute every day.”
Schattenkerk has chaired the NCTC board for the past two years, helping to negotiate some recent programming deals with companies including AMC and NBCU. “The model of, ‘We’ve got this one great channel so let’s leverage it and force 25 others on you and jack up the rate’—that’s not what customers want,” he says. Though Schattenkerk acknowledges some work still to be done, “we’ve made really good progress in getting small and mid-sized operators the flexibility to address their customers’ needs.”
“Wayne is the ultimate cable financial executive,” says Rob Shema, EVP of the ACA. “He combines the financial knowledge and the operational experience to put Wave Broadband in the best financial situation possible so that they can expand by acquisitions and at the same time provide their customers with the best products and services available.”
Independent Technology Executive of the Year
Michael Hain, Nittany Media
A second-generation executive in his family business, Michael Hain has climbed more poles and run more cable and fiber than many of his peers. But the GM/CTO of Lewistown, Pa.-based Nittany Media, whose track record places him well ahead of the curve on technology deployments, doesn’t hesitate when asked what he believes is his greatest industry legacy. “We brought the Internet to a very rural community, and we did it early—by ’97—and we did it as community service,” he says.
Nittany’s provision of T1 level broadband access in kindergarten classrooms in a rural school district was particularly significant, Hain says, because “these kids had not only Internet, but broadband their entire school career… way before big cities like Philadelphia.”
The deployment also ushered in a business priority to wire local schools, community centers and homes as Nittany continues its honor its pledge to bring “fiber to the farmer.” Hain and the Nittany team have helped schools and entire districts create data centers, pare down server needs, eliminate overall network costs and not only keep step with, but often exceed peers in urban locales.
Also high on his list of accomplishments was Hain’s leadership in connecting US troops deployed overseas to “the home and pop culture they protect and enable,” he says, a feat whose genesis dates back to 1993 when he discovered digital video provided by a CD on an IBM PC and realized cable needed to provide 300kbps to each consumer device, not just each customer.
“When our local high school sports coverage was needed by parents deployed to the Gulf War, we were able to provide a global stream. Our active troops were able to see their own kids play local high school football from half way around the globe. One of the best uses of technology,” Hain says. “Later, we assisted some of our deployed families to set up and utilize ‘Sling Box’ [type] technology in their homes.”
“There is a quote that I attribute to my father: ‘When you do the right things for the right reasons, good things happen.’ By installing a complimentary community WAN for the school district, we were able to develop the skills and technologies that enabled our successful DOCSIS deployment three years later. We’re 10Gb now throughout the school district, with Gigabit eRated Internet customers.”
Cable runs deep in the Hain family. “When the other kids were going down to the river fishing, my dad and I were going up the mountain with an inch and a quarter mast with an antenna, and we were fishing too—fishing for a distant signal,” he says.
And it’s his unwavering commitment to the communities Nittany serves that makes Hain an ambassador for net neutrality and other practices that benefit independent operators. On his docket are a push for greater transparency and parity in pricing, a move to unbundle programming, and the elimination of the practice where high-cost programming is “forced” onto basic cable.
As Hain stated as part of ACA comments filed to the FCC, “To be called a gatekeeper to justify regulation, in my view, is completely disrespectful.” He further explains to Cablefax, “My feeling is we are enablers. If it weren’t for us, pushing ahead and using economies of scale and developing standards such as DOCSIS, we’d still be in the kilobit age, not the megabit age. We brought the Internet to our communities and our schools and we keep them connected with the world.”
As a technology innovator, Hain has seen the landscape shift dramatically through the years, landing him, as he says, “in the thick of the thick” of retransmission agreements, FCC rulings and the like. The Hain family also operates a couple of radio stations and a TV broadcast station, providing him a window to multiple sides of some of today’s issues.
“The challenge is not the technology. Technology is easy,” he says. “The things that are difficult are the rights of way, franchise agreements, for TV Everywhere getting the distribution rights. We’re caught in the middle of all that, and it makes it hard to innovate, but that’s what we do. Being a smaller operator, that’s a challenge we have.”
To help stay on top of challenges, Hain maintains a long-term view of tech innovations and isn’t afraid to espouse an unfashionable opinion. “I don’t want to hurt anyone’s feelings and may be wrong on this, but from my assessment DOCSIS 3.1 is an interim technology,” he says. “The new studio standard for video is 120 frames per second at 12 bits per pixel, then when we move to 4K we’re looking at calculations somewhere close to 160 gigabits per second, uncompressed. DOCSIS 3.1 will get us five years maybe. We need direct to switched fiber.”
Independent Community Service Award
In a time when the digital divide can quickly swell to a chasm, Cable One earns our 2016 indie community service honor for its strides to bridge the gap and provide students access to the technology necessary to learn.
For three years and counting, the operator—which serves markets in 19 states including Arizona, Arkansas, Kansas, Mississippi, Nebraska, North Dakota, Oklahoma, Oregon and Tennessee—has donated Chromebooks to Title I schools, many of which lack the funding needed to access these types of devices. Through its “Chromebooks for Kids,” a Cable One Cares initiative, executives spend time in the communities they serve and select schools with the greatest need for technology in the classroom.
“Access to technology in schools is no longer a luxury, but a necessity, and donating Chromebooks to Title I schools will help bridge the digital divide for children who may not have access to this kind of technology at home and to schools that may lack the funding to purchase them on their own,” says Steve Fox, SVP & chief network officer at Cable One.
The schools are using the Chromebooks in a variety of ways. Many of their students don’t have access to this type of technology at home, so teachers are “using the tablets to assist students in establishing the computer literacy skills needed in order to be successful in school,” Fox says.
Feedback from a few school administrators sheds light on just how essential the donations are:
“It’s important for students to learn computer literacy skills at an early age,” says Bryan Garcia, principal at Puesta del Sol Elementary in Rio Rancho, N.M. “With the advancement in technology and the requirements needed for the 21st Century, allowing students the opportunity to create, design and discover using technology is vital.”
Garcia says increased testing requirements from the state and federal government has put his school “in a catch 22 situation. Our available technology is needed for testing, so giving our students access to technology to learn the skills that will equip them is severely limited,” he says. “Students will now have the opportunity to utilize the Cable One Chromebooks to assist in computer literacy skills needed for PARCC and NWEA assessments, and more importantly to learn skills needed for college and career readiness.”
The Chromebooks also provide schools greater flexibility in the classroom. “This generous donation will allow teachers to create new, engaging projects that leverage the technology to encourage communication, collaboration, critical thinking, and creativity in their students,” notes Jason Cresap, principal at Lewis and Clark Elementary School in Fargo, N.D. “We have many students whose only exposure to technology is while they are at school.”
The recipients have shown their gratitude in a variety of ways, including school assemblies. “It’s such a moving experience to see how excited the students and teachers are and to take a moment to sit with the students so they can boot up one of the Chromebooks and start exploring,” says Scott Geston, Cable One’s Fargo GM. “Our associates are passionate about giving back to the community where they live and work. We know that improving access to technology in our schools will improve education and benefit our communities for the long term. The schools we’ve donated to have been amazing and overwhelmingly grateful.”
Though the ongoing Chromebooks for Kids program has a tremendous impact, it isn’t the only community service Cable One engages in. Company associates and their families volunteer thousands of hours each year at food banks and animal shelters, building houses, holding food and toy drives, and raising funds to support organizations in need, says Fox. “It’s very important for us to give back to the communities where we live and work, and to be the kind of company our communities are proud to call a neighbor.”
Independent Lifetime Achievement Award
A defining moment in Amy Tykeson’s fruitful career in cable and broadband was when her father Don Tykeson, then owner of BendBroadband and an icon of Oregon cable, taught her a lesson of expectations in a family business. “He literally turned the gavel over to me during a Bend Cable board meeting,” she recalls. “With the realization that I was now responsible for this important family asset, including building our company culture and advancing our community reputation, I retooled.” She completed her MBA, sought out an additional mentor, and joined the Young Presidents’ Organization for peer support. “The bar seems higher in a family business, and fear is an incredible motivator!”
The expectations came full circle, as she then set the bar high for her company. She led with the belief that “If you’re a small operator you don’t have to act small,” says President of Eagle Communications Gary Shorman, who served alongside Tykeson on the NCTA board. “It doesn’t mean that you can’t perform better, take care of customers better, do things better than the biggest guys in the country.” When approaching a project, she would always look for solutions that were good for customers. Whether in board meetings or technology sessions, “her leadership in those situations was really a challenge and an inspiration to the rest of us who are out there trying to fight those same battles,” Shorman says.
That tenacity led to a number of technological innovations at BendBroadband. Examples are the launch of high-speed Internet in ’97; the conversion to all digital video in ’08; and opening the Vault, a colocation data center, in ’11.
“In many cases Bend was one of the first companies to embrace new technologies, to deliver services more efficiently,” said Mike Dewey, executive director of the Oregon Cable Telecommunications Association. “I really find it amazing that they were kind of an incubator. Amy is a financial person, but she also understands technology.”
Tykeson also pulls a lot of inspiration from her father. “My dad has been a foundational mentor to me over many decades,” she says. “It is a delight to hear him now, sharing his advice and insights with my kids. He always took the long view in our business, provided me with the latitude and support to do the right thing and take risks.” Her favorite career memory? Top of the list was the day she and Brian Roberts received their Vanguard Awards from NCTA in 2007, which led to their fathers re-meeting and recounting their early connections in cable (see picture). Tykeson is also proud of unveiling BendBroadband’s “Local Dog” branding companywide. Burning the slogan “We’re the Local Dog, we better be good” into the company’s history was “a thrilling highlight.”
And lest we get lost in a sea of accomplishments, it must be stated that Tykeson is also known for giving back. She has sat on the boards of NCTA, WICT and OCTA. She and her family make ample contributions toward the Oregon community. And since leaving the industry in 2014, when Bend was sold to Telephone Data Systems, she has targeted her attention toward three areas: community service and volunteer boards, economic development including startups, and philanthropic endeavors. Perhaps Shorman puts it best: “She’s a very generous and kind person. Sometimes you don’t find that combination in business—but that’s her.”
MSO Product Launch of the Year
Comcast Stream TV
First came skinny bundles and college service Xfinity on Campus. Then came streaming cable service Stream TV, which requires no additional equipment, no set-top, not even a TV.
Comcast announced its Stream TV service in 2015, but the company started looking into delivering video over IP and building a cloud-based infrastructure in 2012, according to Michael Gatzke, VP of video subscription services at Comcast Cable. The platform aimed to allow Comcast to deliver a mobile-first TV viewing experience for customers, among other things.
“We recognized that there’s a growing number of mobile-first customers,” says Gatzke. With the technology ready and consumer demand on the rise, Stream was born. The $15 per month streaming service offers live TV and premium cable content across platforms. Available channels vary by region, but all lineups include HBO and local broadcast channels, including ABC, CBS, CW, FOX, NBC, PBS, Univision and Telemundo. In addition, as part of customers’ Stream TV cable subscription, they can also watch TV Everywhere programming over any Internet or mobile connection using the Xfinity TV app or portal, or programmer apps like HBO Go. The service is delivered over Comcast’s cable system, not over the Internet. That means Stream TV data usage won’t be counted towards subs’ Xfinity Internet monthly data allowance. And that’s been a sore point with some consumer groups, who claim it could hurt other online video options. Comcast has said it’s not an issue because the service does not go over the Internet. So far, consumers seem to be quite curious about the service.
“The vast majority of interest in the product is from our own Internet subscribers…It was designed for them,” Gatzke says. That said, non-Xfinity subscribers will be able to use the service as long as they have a certified cable modem provisioned by Comcast (it doesn’t have to be a Comcast modem). The company has already started the process to enable non-customers to access Stream TV.
The feedback so far suggests that customers want Stream TV to be available on more devices, with even more programming options. “We are working on that,” Gatzke says, noting heavy viewing of sports—especially football programming—among Stream TV customers. “There’s a lot of live viewing” mixed with some VOD viewing and light DVR usage, he says. PC is the most popular viewing platform so far. The company is also looking to add more premium channels and bring any of the standalone premium channels Comcast carries to Stream TV.
In addition, Comcast plans to offer more packages of channels, which might include a basic bundle and expanded tiers. The strategy is to keep the bundle as skinny as possible while providing more options and maximizing viewing flexibility so it’s easy to add or remove programming services. The offering is now only available in Chicago and Boston, but Comcast plans to roll it out across the MSO’s footprint by the end of the year.
Independent Project Launch of the Year
EXP from Armstrong
It’s one thing to imagine a new product, another to put in the time, research and development to ensure said product’s longevity and success. Indie operator Armstrong last March rolled out EXP, a whole-home operating platform powered by TiVo to blend television, broadband and wireless Internet services.
The results speak for themselves. In just more than a year, 15 percent of Armstrong’s video customers have signed up and weekly net gain shows no sign of slowing. Churn is down, too. “Word of mouth is helping sales significantly,” says Jeff Ross, Armstrong president.
Initially conceived as a way to re-energize the operator’s video business and capitalize on its broadband penetration, the interface swelled to include whole home WiFi and second screen capabilities for in-home streaming to tablets and phones. It’s also a six-tuner DVR that enables customers to connect to as many HDTVs as they want. Among other benefits, customers can thematically search live programming and libraries across TV, on demand and online, store up to 153 HD hours or 1,300 SD hours of programming, schedule recordings from anywhere and easily stream or transfer shows on an iPad, tablet or smartphone, and live cast family photos, online videos and music from their portable device onto a selected TV.
“First, our user interface was getting very old-looking compared to DISH’s Hopper and DirecTV’s Genie,” Ross says. “Second, as our customers became more mobile, we knew we needed to enhance the whole home experience. To drive home this benefit we branded it EXP, making it more than just about TiVo.”
Armstrong—which offers TV, phone and Internet service over cable in Pennsylvania, Ohio, Maryland, West Virginia and Kentucky—is the 18th largest cable provider in the U.S., according to SNL Kagan.
Ross and his team learned some key lessons around the deployment. Among the most salient: Ensure time to work out the technical challenges. “It’s important to have a very reliable product when you finally launch,” he says. “We thought we gave ourselves enough time but it took longer than expected. We delayed the launch to get it right. It was worth the extra time.”
Also worth it was empowering company employees. “We made the call several months before the official launch to offer it free to all our employees who lived on our network. It helps to have 800 employee testers who then have intimate knowledge of how the product works and its advantages.”
The customer campaign launched with intrigue marketing around the tag line: This changes everything. “Over the following months we moved to explaining what ‘This’ means. It was all about creating interest and a brand,” Ross says.
Armstrong then sent targeted letters and conducted outbound telemarketing to existing multi-room DVR customers to encourage them to swap out their DVR for the more advanced EXP product. Seventy-one percent of the multi-Room DVR customers opted for EXP. Armstrong also placed 15-second EXP advertising spots that ran before YouTube videos, and produced a series of long form EXP “how to” educational videos to assist customers with questions about EXP.
In addition, the team designed high-tech kiosks for each Armstrong system office where customers could immerse themselves in a live EXP experience—positioning EXP as an effective customer retention tool.
Most recently, the operator introduced a series of quick tip videos that highlight various EXP features that are emailed to EXP customers every other week. “Now we talk only about its features and functionality.”
MSO Business Services Innovation
While cable operators are relatively late comers to the enterprise market, they continue to squeeze more revenue out of the sector. When Cox Business was created in 2000, it was among the first cable MSOs to enter the market, with about $100 million in revenue in 2000. Since then, it has quickly grown.
After reaching the $1 billion annual revenue mark at the end of 2010, the unit is on track to pass $2 billion by the end of this year. Small businesses have been the company’s sweet spot: around 80 percent of its 350,000 business customers are small. And this segment is still going strong. For this year alone, Cox expects to add 60,000 new small business relationships, says Steve Rowley, SVP of Cox Business.
In the mid-sized business space, Cox Business has seen significant growth in hosted voice services. It has gone from little revenue three years ago to potentially reaching $50 million this year. And in the enterprise space, the company has focused on vertical markets, including healthcare, hospitality, finance, government and education. In the education market, Cox Business serves more than 50 percent of the schools within its network reach, more than 5,800 schools and libraries with nearly 4.2 million students. It provides Gigabit speeds to several school systems nationwide. Looking at hospitality, Cox has successfully expanded its reach beyond the traditional hotel space to the arena and convention center space. In December, Cox Business scored a contract with the Las Vegas Convention Center, the site of the CES trade show, to provide Internet connections. AT&T, Sprint and a third wireless carrier have signed on to launch wireless services powered by Cox on a distributed antenna system. This year, Cox partnered with MGM to provide fiber network and WiFi access in the T-Mobile arena in Las Vegas.
Meanwhile, Cox’s carrier business generates about $200 billion in revenue. It works with all the major carriers on backhaul, small cell, and wholesale services providing last mile connectivity. “Data connectivity is still the driver… That continues to be the anchor for all of our businesses,” says Rowley. Looking at changes in the large enterprise space, Cox is “seeing rapid and large demand for fiber-based solutions… We are seeing more sophisticated Internet solutions.”
And as the evolution of cloud services becomes more prevalent, “the need for larger connectivity for data centers and other hosted environments have become more important.” That’s also true in the mid-sized business space as companies adopt more bandwidth-intensive services.
All the changes have helped cable MSOs grow in the business market, Rowley says. In the next five years, cloud services will continue to grow quickly, creating revenue opportunities in data centers. The exec also sees security as another growth potential, with Cox just coming off of a trial integrating it with business offerings.
Independent Marketing Team of the Year
Created in 2007 by North Carolina towns Mooresville, Davidson, and Cornelius, MI-Connection was saddled with improving the image of a now community-owned cable company in the wake of Adelphia’s bankruptcy and Time Warner Cable’s brief ownership that followed. The task: to change the company’s image so that it could compete with the big guys.
“Some folks didn’t really buy into the fact that a cable company should be community-owned,” remembers director of marketing and sales Ellen Baker. “At the time we were doing regular marketing, as the big box people do, and we were getting customers and all, but we weren’t telling our story. So we felt like we needed to find our voice, and communicate that with our customers.”
The fruits of that pivotal moment continue to bear fruit today. Their advertising is a husband-and-wife team in town who relocated from San Francisco. At one of MI-Connection’s many community events, the pair pitched a new “straight talk campaign.” It was blunt and to the point. “If you owned a grocery store, wouldn’t you shop there?,” read one advertisement. “Does your cable company really need your business?,” read another. Or how about tapping into the population’s economic concerns, with “Can you create local jobs just by watching TV?”
“Our uniqueness is that we are local—our service is provided by local people,” says CEO Dave Auger. “We are owned by 3 towns that we service, and so we tell people you should buy local as opposed to sending your dollars to New York City, Denver, or wherever the competitors are headquartered.” Visit MI-Connection’s Facebook page. As you scroll down, you will see some of its creative marketing campaigns. They’re pretty engaging and even funny. One example: “Best when bought locally: Seafood, Produce, and Cable TV.”
MI-Connection also has created a consumer retention program using the straight talk campaign messaging, so as not to leave out the company’s current customers. One headline reads, “You’re going to need a lot more popcorn.” During the summer they give free VOD movies, one each week, to all of their customers. “It’s a retention method for during the summer when there’s a lot of disconnect. In all of the copy the message is the same,” Baker says.
Another key component of the turnaround was the company’s improvements to customer service. “We provide 2-hour windows for installation and service calls, which our customers love,” says Auger. “We answer the telephone promptly, and very rarely are people placed on hold. If there’s a service problem, we’ll address it that day or at a minimum next day.”
And of course being local means showing your face at community events. The company sponsors many local community activities, such as Race City Festival, and it has partnered with the Mooresville school district to provide free Internet to students who are at risk or need government assistance.
Pulling all this off is a challenge for a staff of 62. “But it’s something we have to do just because of the level of competition that’s in this market,” Auger said. And it’s paid off fantastically. In the last 5 years revenues are up 37 percent, EBITDA is up 132 percent and customers are up 30 percent, according to Auger. “It’s been explosive growth since initiating and implementing this campaign.” And while they prefer remaining under the radar, “it’s great that some of these successes are being acknowledged,” he said. Baker concurs, adding that “it’s been a lot of hard work, but it’s been rewarding seeing the tides turn.”
Moving forward, the team will continue their straight talk messaging. “We just want to keep building on it, and try to convey the message and take it to another level,” Baker says. “We are increasing Internet speeds for our customers without increasing rates. We’re just going to keep our nose to the grindstone and get feedback from our consumers and see where it takes us.”
John D. Andrews, US Sonet
A forward-thinking businessman who embraced new technology while remaining grounded in the communities he served, John Andrews is remembered not only for his industry prowess but as a champion for the independent, family-operated cable business.
The founder and president of Salem, Illinois-based US Sonet, who died in February at age 51, ran one of the most successful fiber to the home overbuilders in the country. Under his leadership US Sonet achieved close to a 51 percent overall take rate and still boasts one of the highest voice, video and data take rates.
Andrews steered the company through a major expansion that included the transformation to an all IP, over ethernet infrastructure. He welcomed the deployment of TV Everywhere and saw opportunity, not threat, in the rise of OTT services, always keeping the customer experience top of mind.
His wife, Rhonda Andrews, tell us she put “Anything worth doing is worth overdoing” on his tombstone. “John overdid EVERYTHING,” she says. “If I wanted one candy bar, he would buy me six. If someone wanted something, he gave them more than double what they asked. He answered calls all of the time about work—even during dinner and in the middle of the night. He overthought everything. He was also the most giving and positive person I have ever known.” And to top it off, he never complained, she adds.
“John embodied the entrepreneur spirit of ACA members,” says Rob Shema, ACA EVP member services and finance chief of staff. “He saw a need in his community, and he was not deterred by competition or challenges. He made sure his local, rural, small community had broadband services that equaled or surpassed the services found in nearby major cities like St. Louis.”
An active member of the FTTH Council, Andrews also built multiple IPTV headend/earthstations, and co-founded a number of tech and communications companies including Access US and Lightspeed Telecom, an Illinois certified facilities-based CLEC and wholly owned subsidiary to US Sonet. He also founded Fiber 520-522 LLC (Fiber 520), which he formed to serve a larger base in southern Illinois. The company in 2007 received one of the largest broadband loans from the US Department of Agriculture—more than $127 million—to install FTTH in towns with populations of 20,000 or less in more than 75 rural communities in southwestern Illinois.
As he competed with—and often bested—some of the majors, Andrews was above all an example of the triumph of the indie operator. As a panel speaker at the 2011 Independent Show, when asked about the values he wants to impart to his sons who would succeed him one day, Andrews responded he was trying to “teach them the caring characteristics so that some day they can step in my shoes” and a strong work ethic. “It doesn’t matter what your position is, just work,” he said.
Cablefax 100 – 2019 Nominations Due
January 25, 2019
Cablefax Leaders Retreat 2019
April 29, 2019