If you owned stocks last year, you probably watched their free fall like a horror movie, fingers firmly covering your eyes. If you owned Mediacom, you were spared much of that pain.
In fact, despite the bleak economy, Mediacom delivered one of the best economic performances in its history. In 2008, it added 222,000 revenue-generating units and boosted revenue by 8%. Already in the first quarter of 2009 — as we know, an even bleaker economy — Mediacom snagged another 59,000 RGUs and is averaging a 25% rise year-to-date in its stock price.
The operator’s strong 2008 stems from specific projects rolled out last year and from a foundation built during the last decade. Last year the company retrained and reeducated technical employees so they could act as salespeople when they were in a customer’s home; now they can take and fill orders for DVRs on the spot, for instance.
"We put a much greater intensity on our ability to get numbers from the field and our managers’ ability to access live numbers and what’s happening on the sales front on an hour-by-hour basis," says Mediacom CEO Rocco Commisso, our Comeback Executive of the Year in 2008. That in turn helps the company operate more efficiently. "That was a powerful management information tool," he notes.
But he also credits Mediacom’s acquisition strategy from nearly 10 years ago as a key to success. Then, the company bought cable systems at about $2,150 per sub, much less than the $3,600 per sub average. Also, while Mediacom has invested $2 billion in its business during the last eight years, it’s done so at 6% debt, a relatively low rate. Mediacom has lost about 13% of its basic subs during those years, but that’s been offset by a 50% growth in RGUs overall.
"We got here because of how we bought, how we financed and how we managed," Commisso says.
A Little Insight
There’s a saying in television: the hardest thing isn’t having a hit, it’s doing it year after year. So it was no small feat when our 2008 MSO of the Year, Insight, repeated its strong showing last year. The operator grew basic customers by 5% in 2007, then did it again last year. The rise is all the more noteworthy given that most MSOs bled basic subs and that 2008 was a tough year, to say the least.
Still, Insight finished last year with an extra 34,000 basic customers and about 72,500 new high-speed customers. On top of that, Insight also added about 89,000 phone customers and nearly 59,000 digital video customers. Those numbers helped make the fourth quarter of 2008 the company’s 14th consecutive quarter of basic growth.