Charter’s Rich DiGeronimo Talks 2011 Roadmaps

Rich DiGeronimo, vice president/Product Management, joined Charter Communications more than two years ago after spending eight years at Level 3, where he ended as vice president and GM/Cable Markets. At his new gig, he’s responsible for developing Charter’s video, high-speed Internet, telephone and commercial business products.

In January, Charter and TiVo inked a multi-year video-on-demand (VoD) partnership aimed at enhancing the customer experience, and the MSO has increased business and residential Internet speeds twice during the past year.

DiGeronimo recently spoke with CT Editor Debra Baker about Charter and its prospects for the rest of the year, including strategy, the TiVo partnership, IPv6 migration, and customer wants and needs.

CT: How far ahead do you strategize for new products and services? One year, five years?

DiGeronimo: We certainly look at the macrotrends that can impact our industry and our business as it relates to big-ticket items like unemployment, housing, demographic shifts, etc. As far as project strategy goes, we go 12 to 36 months. To go much beyond that is a fruitless exercise; who would have thought of the iPad a year before it came out? Who would have thought of an app store? They just didn’t exist.

We don’t spend a whole lot of time guessing at what the Silicon Valley types may be inventing. Instead, we spend a fair bit of time thinking about great products and services, either by ourselves or with partners, that can meet many of the trends. TiVo is great evidence of that. We look out and we see these trends like streaming video, apps stores, and that’s why we think TiVo can help us address some of those trends today by providing the platform we can develop on, either by ourselves or with partners in the future.

How did the TiVo deal come about, and what does Charter want to happen as a result?

We embarked on a strategic project about a year ago, looking at all the options that would allow us to provide what we would call ‘integrated television services’ that basically marry traditional delivery with the power of the Internet. That was our objective, and we wanted to do it in such a way that we would supply a really compelling user interface for our customers as well as a way for our customers to find the content they want to watch when they want to watch it. There really was no one place a consumer could go to get all the things they want to watch or listen to all in one spot in an easy-to-use fashion.

After doing all the analysis, we narrowed in on TiVo; the customers they have today are loyal, and it’s really an intuitive platform. More importantly, they’ve made big inroads in the last year or so with other broadband and television providers (like Virgin Media, SuddenLink and RCN). They also provide pretty nice time-to-market, as TiVo has already gone through much of the exercise; they have a retail product that is on shelves today, and you can go out and buy it at BestBuy.

We will be starting with the ‘TiVo Premiere’ product. And we are not wed to the TiVo hardware over time; we can go out as technology evolves on the hardware or application side to use the framework of our relationship and then expand it.

What’s the biggest challenge facing Charter right now?

We believe we should provide our customers and our prospects with the best customer experience possible, so we certainly have been trying to embrace online video, whether it’s YouTube or other kinds of online services. The second angle we believe is important to note is that we have what we believe to be the best broadband pipe in our footprint. For example, we just raised speeds again for the second time in 12 months. So for our online video presence or for things we haven’t even thought of yet online, the need for bandwidth just continues to grow. In our footprint, we believe we will be the best destination for that for our consumers, so we want to embrace it multiple ways.

Any big successes?

We emerged from bankruptcy more than a year ago, and we have had successes as an organization in the past year. We’ve delivered best-in-class broadband speeds twice in one year, and we think TiVo (once it is deployed and is being enjoyed by our customers) will be a big success.

We also deployed switched video as well as DOCSIS 3.0 so, from a consumer standpoint, we’re delivering more HD to the majority of our footprint. We also have DOCSIS 3.0 for our ‘Ultra 60’ product on the residential side, and it also enables our 100-meg product on the Charter business side as well.

We’ve also been re-listed on NASDAQ, and we have a great balance sheet.

Has Charter experienced much churn as a result of IPTV and OTT?

No. We have not seen that as of yet.

How have your technicians dealt with the near-daily changes that have had to be made on the networks, and what are they doing now to maintain network integrity?

You need to separate the network from the applications that ride over the network. Our network is pretty robust, but we also have deployed DOCSIS 3.0 (channel bonding). We hit all our plans for 2010, and we’ll have DOCSIS 3.0 complete by the end of this year. For the applications that ride on top of it, I don’t think it’s a huge demand on the technician side because most apps come over the Internet, and our network is built to handle that. It doesn’t require incremental work by a technician.

We don’t spend a whole lot of time guessing at what the Silicon Valley types may be inventing.

The other piece of the puzzle is how consumers are accessing apps from the Internet in their homes. We have a pretty robust home-networking product that requires a technician install; we also work with our customers to maintain that service in the home as they connect new devices to the network. We view it more as an opportunity than a threat, as more digital and IP devices come into peoples’ homes.

Last year, we saw so many whiz-bang program guides touted at the Cable Show. Has Charter deployed any of these advanced, personalized guides? If so, what’s the uptake on them? Also, are there Charter applications that allow TVs to be controlled via smartphone, iPad, etc.?

We have more than 3 million customers today who use one of our digital set-top boxes (STBs), and a portion of those are going through a program-guide update right now that we call ‘Passport.’ It has such things as video poster art for on-demand videos; that may not be whiz bang but it’s an evolution. That’s also one of the reasons we chose TiVo; its TiVo Premiere program guide and user interface are top-notch. Not only is it visually appealing, it provides the consumer with exceptional search and navigation capabilities – it allows for the discovery of content in a visually appealing way.

If you look at TiVo, it just launched an iPad app that allows you to navigate the STB. You even can use things like gesture-based commands to navigate through the programming – you can tap it to pause, you can swipe backwards to go back or rewind, you can take things out of the DVR and put it on the screen. We’re also evaluating other iPad or Android-based tablet apps for our existing digital subscribers.

How is Charter reaching out to enterprises, schools, hospitals, etc., with specific products and services? How about to residences and MDUs with services that are not video-related?

There are subcategories to voice, video and data when it relates to enterprise vs. residential. At its most macro level, we are offering voice, video and data but, as you break that down, there is a very robust set of value-added services for the enterprise for data. There are higher speeds, whether over coax or over dedicated fiber. We offer such things as managed security, hosted Microsoft Exchange accounts and Web hosting.

On the phone side, we offer a great new product called ‘Charter Business Phone Plus,’ in two markets now but in all markets this year. You can do such things as ‘simultaneous ring’ that can ring several different lines at once in a personalized configuration until the person is ‘found.’ Later this year, we will launch ‘voicemail to email” that can be viewed on a mobile device; this is a great productivity-enhancing tool. On the data side, we have significant flavors of all our different offerings.

Where is Charter when it comes to the IPv6 transition?

We have a team that’s been working on that for several months, and we are prepared to comply with it, just like the other major cable suppliers in the industry.

How many of your customers embrace the bundling concept, and why hasn’t Charter partnered with a wireless service provider for quad play?

Sixty percent of our customers are in a bundle, and that number grows every quarter. And a number of MSOs have looked at wireless but the right business proposition isn’t there. We have an open mind but, for now, we haven’t seen an economic model that makes sense for us. For us, the wireless play for now is in the backhaul space. The demand for bandwidth on mobile devices is growing and will continue as 4G and LTE propagate the United States, and we are a heavy player in our footprint.

What are customers asking for that is not being provided at the moment but will be?

We feel like our road map addresses many of the things customers are asking for that we don’t currently support. Some people have asked if they can get online videos on their TVs through Charter, and that’s certainly something we’re addressing through this TiVo deal. Some have asked about controlling the TV via an iPad, and that’s part of the TiVo thing, too.