Millennium Digital Media’s objectives for 2007 are clear: boost customer penetration substantially through triple-play bundles; introduce additional services, led by VOD; and acquire systems near and beyond the St. Louis-based company’s franchises in Maryland, Michigan, Oregon and Washington state.

It’s also clear that the company is willing to discuss its goals. In the past, Millennium, which has nearly 110,000 customers and ranks among cable’s top 30 MSOs, has often ducked media requests. That’s no longer the case under president and CEO Bill Shreffler, formerly president of Cebridge Communications (now Suddenlink) and SVP at Charter. Shreffler took up his post at Millennium last September, succeeding Kelvin Westbrook, now the company’s chairman and chief strategic officer. Westbrook will focus on acquisitions and represent Millennium to outside constituents such the NCTA board and the NAMIC Foundation.

Millennium’s key leadership — Shreffler, EVP/COO John Brooks, SVP and chief marketing officer Rudy Tober (a former colleague of Shreffler’s at Charter) and programming/product development SVP Peter Smith — discussed the company’s immediate and future plans with CableWorld recently, giving us a chance to get a deeper appreciation of the MSO’s outlook.

How close is Millennium to acquiring more systems?

Bill Shreffler: We’re in the early stages. Over the next few months the war chest will be lined up and we’ll figure out what’s available in the marketplace. We’re open to any part of the country. Our focus is the secondary and ternary markets. That’s the sweet spot for us. There’s no desire for a top 20 or 40 market location where we go head-to-head with intense competition.

What’s your top priority?

Shreffler: We’ve got a mission statement that spells out four things. We make our decisions based on those four items, and if we achieve each of those points, it’s a touchdown. First, we have to take better care of our customers. Not only on the phone and in the field, but how we take care of customers from the point of install to the point when they upgrade to new services. The second thing is we have to take better care of each other, through training initiatives and talking with individual employees on how we can better achieve success. The third thing is we’ll do what we say we’re going to do. That goes for everybody and everything we reach out to, whether it’s to our investors, our employees, our customers and our franchise authorities, in providing excellent service and being a great company to do business with. Fourth, and certainly not last, we celebrate the first three things. We’ll go out of our way to make sure we take the time to look back, often, focus and celebrate the great things we accomplish and use them to motivate us to higher levels of performance.

Where has Millennium made the most strides during your tenure as CEO, and where has it fallen short?

Shreffler: On taking care of the customer, we’re moving the needle, but not as quickly as we’d like. There are a lot of reasons for that. When you start off and you’ve got your first 100 days working with a team and trying to pull things together, it takes a little bit of time to understand where you’re at and where you’re going. We look at 2007 as a National Football League divisional playoff game. Our goal is to win the division by the end of the year. The way you win the division is predicated on several things. One is beating your budgets on revenue, revenue-generating units and cash flow. Additionally, we score the game throughout each month, through key performance indicators. Some of these indicators are service call percentage to total customers and install completion percentage. We look at those KPIs and evaluate how good a job we’re doing.

Are KPIs a new benchmark for you?

Shreffler: Yes.

John, how will Millennium improve customer service and drive penetration for basic, digital and the triple play?

John Brooks: We have to answer the phones. We have to improve the reliability of our plant, in order to be successful. We’re in the process of building a new customer service center in Pottersville, Mich., adjacent to our Michigan region office. We’ve created an almost cabinet-level position in senior management for customer service. We’ve hired an SVP for customer care, Terie Hannay, who has had both CLEC and cable experience. We’ve outsourced our high-speed data support to IBBS (Integrated Broadband Services) out of Atlanta, which will service our high-speed data customers better. And as Bill noted, in taking care of each other, we’re improving our customer service training. By improving call center support, we’ll see revenue-generating units tick up.

Is there a basic message you hope to get across to your customers?

Brooks: [That they understand that] we recognize we must take care of them better. It doesn’t matter how much competition we have, whether there are three providers or zero in a given market. We must take care of the customer to be successful.

Shreffler: Also, we’re exploring how to make Millennium a place where customers look at or shop for all sorts of home products. The way we could do that is through our website. Already, we have a deal with Protect America, where we market their GE-supplied home security equipment through our site.

Brooks: When you talk about taking care of the customer, home security doesn’t get any closer to home than that.

You have DBS in all your markets, Verizon launching FiOS TV in more Maryland markets and AT&T’s U-verse attempting to break into Michigan. Besides improving customer service, how will you top the competition?

Brooks: With the triple play. We recognize the importance of the triple play, and that’s a big initiative for us this year. Aggressive marketing of the triple-play bundle is the key to beating the competition — that combined with servicing customers the right way.

Rudy Tober: Our triple-play marketing is not that dissimilar from other cable operators. We position the triple-play from $33 for each service per month to as low as $26.66 per month in some sections of Maryland. We’re going with a strategy that spotlights why all three products — digital, high-speed and telephone — together are the best bet.

Rudy, what distinguishes Millennium’s cable systems in Maryland, Michigan and the Pacific Northwest?

Tober: We’re in fringe suburbia with pretty good demographics. There’s an opportunity to bring the triple play and all the good things coming with new technology to these areas. We build triple-play value into all of our marketing campaigns.

John, is Millennium exploring bandwidth expansion this year?

Brooks: That’s a focus for this year, and we’re in the study process. The larger systems are 750 MHz and 860 MHz, depending on location, and we feel we have enough capacity today to launch VOD and other services. In the Pacific Northwest, [we have] a lot of small systems with fewer than 550 MHz. We’ll upgrade those systems this year to the extent we can. We’ll launch high-speed data, HDTV and digital phone services in those markets.

Peter, what’s the top priority in programming?

Peter Smith: Stay the course and make rational programming decisions, adding the most critical programming our customers tell us they want. We’ll evaluate channels that may or not be hitting the mark, and not let programmers take for granted that once they’re on our systems, they get to stay on. They need to continue to provide excellent value to our customers at a price point that makes sense for us as a company.

What networks not on your systems are customers asking for?

Smith: A laundry list. We get a lot of people who say they want this or that. There’s no dominant network or networks we’re hearing about from our customers. There’s no call for mass deployment of any channel. We listen closely to our regional management teams, and if they hear from customers who feel a particular network is important, it’s important to us. If there’s a groundswell of interest for a channel, we’ll do our best to accommodate those customers.

Where do you stand with VOD?

Smith: We met last month with a number of different vendors to talk about different hardware strategies. Initially, we’d start VOD first in our larger systems with the most available bandwidth, probably around second or third quarter 2007. When we have the right vendor partners, the right content plan and the right promotional means for consumer introduction that will be when it makes sense to launch.

What kind of VOD content are you considering?

Smith: There are a lot of great categories — movies, sports, lifestyle, user-generated content — and we’re looking at all of them. What we would do is look at something like the premium services, because we have a lot of customers who make a monthly decision to subscribe for premium content. We can add a lot of value to that.

Are you concerned about DBS and the telcos getting more aggressive with HD channels?

Smith: There’s no question that as more consumers get HD sets, they’re interested in more content. We’re working to respond to that in a prudent way. Just because something is HD doesn’t mean customers want to watch it. We’ve launched HDTV in all three of our operating areas, again in large systems with the most channel capacity. The number of channels varies by area. We’ve not taken a one-size-fits-all philosophy. We’re very decentralized and we’ve been guided by regional management teams. In some places, there was a feeling we definitely needed HD content from the broadcast stations. Other places felt it was more important to have HD from the premium networks like HBO. So we have a mix of the two. Generally, we try to be competitive on HD with DBS or other sources.

How are your relations with broadcasters?

Smith: Fortunately, we have pretty good relationships with the broadcast stations, and we don’t anticipate any retransmission problems in 2007. Most of our deals run beyond that, so we feel pretty good where we’re sitting.

Bill, how does working at Millennium compare with working for Charter or Cebridge?

Shreffler: This is a lot more fun. I enjoyed those opportunities, working with Jerry Kent both at Cebridge and Charter. But this is great, because you know what? The buck stops right on my desk, and I know that. Plus I’ve got the wherewithal from my management team and board to make [success] truly happen the way we all dream that it will.

Millenium Digital Media by the Numbers

HEADQUARTERS: ST. LOUIS, MO.

CABLE SYSTEMS: 69

HOMES PASSED: 297,652

MILES OF PLANT: 4,836

BASIC SUBSCRIBERS: 109,208

BASIC PENETRATION: 37%

DIGITAL SUBSCRIBERS: 39,155

DIGITAL PENETRATION: 36%

HIGH-SPEED ACCESS SUBS: 50,838

HIGH-SPEED ACCESS PENETRATION: 47%

DIGITAL PHONE SUBSCRIBERS: 3,535

DIGITAL PHONE PENETRATION: 3%

HDTV SUBSCRIBERS: 6,080

DVR SUBSCRIBERS: 5,656

SOURCE: MILLENNIUM DIGITAL MEDIA

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