BALTIMORE — At the opening session of the NCTC/ACA-sponsored Independent Show in Baltimore, Atlantic Broadband President and COO Ed Holleran said he happily views the multiples Bresnan got in its recent sale to Cablevision as “a good start after the market had been shut down for the last three years,” adding it appears “Wall Street is turning more bullish for cable. The cost of capital is down, and we hope to refinance to take advantage of that.” Added New Wave SVP of Operations Larry Eby, “Access to capital has changed our mindset on spending.”
Even so, there still are good, bad and ugly things happening in the small-operator industry. Across the board, the panel, which followed NCTC closed membership meetings, agreed that “owning the pipe” and having the best platform are the good things today, which allows for more and better competition. The “bad” continues to be a combination of the economy and some of the rulings now under consideration on the Hill and at the FCC; retrans initiatives, or the lack of them, are instilling a certain amount of fear that “people will finally get fed up with the rising costs of cable services.” Having put that on the table, the panelists reserved “ugly” for ongoing negotiations with programmers for fair programming fees coupled with the fallout surrounding the pending Comcast/NBCU merger.
The talk then turned to how to grow the business in an economy that may be bouncing back in some sectors but still is leaving job creation behind and causing subscribers to think more about what they spend on cable services. “Value begets value,” said Bill Beaty, EVP of Comporium Communications. “We need to come up with more bundling solutions.” One of the more up-and-coming revenue producers has been provision of commercial business services, including more voice and data, security solutions, storage and managed services. “In small-town America, this is great,” said Eby.
Since the economy started to tank some two years ago, some of the execs on the panel decided to implement credit scoring as a way of vetting new customers. While they admit they did have to deny service to those who either didn’t pass muster or who refused to pay a deposit, in the end, it was better than turning on customers who couldn’t or wouldn’t pay, only then having to cut them off the system.
“We lost some money at the beginning, but (the potential customers) would have been non-profitable and they wouldn’t have paid their bills,” said Holleran. “We have fewer connects but we’ve had a 30 percent to 40 percent drop in disconnects.”
Moving forward, VoIP and data services will continue to be two of the largest contributors to NCTC members’ cash flow, commercial business offerings will be big; according to Atlantic Broadband’s Holleran, business services have been responsible for 33 percent of his company’s revenue growth so far this year. And wireless is growing, with Holleran saying he is committed to finding a way to monetize video on cellphones.
New Wave’s Eby also stressed the importance of being perceived as being a “local” company. “We intentionally bought a low-power TV station” to help ensure customers had local access in parts of Kentucky.
– Debra Baker