Meet the MSO: A Trusted Guide in the Digital Age

During 25 years in cable, Joe Rooney has spent the last two decades with Cox Communications. He started 2007 with a promotion from SVP of marketing to SVP and chief marketing officer. For the first time at Atlanta-based MSO Cox, Rooney will combine marketing campaign development and implementation with operations policy-making.

Of 5.4 million Cox basic customers, more than 3.4 million take a double- or triple-play bundle, and much of the credit goes to Rooney and his legendary zeal for the bundle. Bundle advocacy will remain part of Rooney’s new job, but he’s added another priority — being the voice of the customer. He’ll insure that Cox customers will be guided through the complex universe of advanced media choices, from on-demand TV to user-generated Web content.

In this interview, Rooney discusses the importance of easing the customer’s burden in the digital age, how the bundle could grow and why Cox is changing its culture to compete with the RBOCs. The chairperson of CTAM’s national board of directors and co-chair of SkiTAM, Rooney explains Cox’s thinking on a new tech solutions unit that, for a fee, will help subscribers overcome problems with advanced systems, like home networking.

What responsibilities come with your new role as chief marketing officer?

Joe Rooney: Part of the change reflects the fact that I now report to the president of the company, Pat Esser. A big part of my role is to be a senior team strategist, not just the marketing guy.

How will that shape what you do and what Cox does?

Rooney: Cox has always been a company that puts the customer first. My role as a functional expert in marketing and a senior team member is to be the voice of the consumer at the senior team’s table.

As the voice of the consumer, what do you tell the senior team?

Rooney: Consumers are a little bit confused. They’re getting hit from all angles with lots of messages about video, voice and Internet products. They’re not sure whom to trust or to listen to. It’s important for us at Cox to make sure our messages don’t add to the confusion but, in fact, add to clarity.

Do consumers see cable operators as players in the digital culture?

Rooney: Consumers recognize that this isn’t your father’s cable company. Most of the industry has achieved digital cable penetration with more than half its customers, with hundreds of channels, interactive program guides and so on. High-speed Internet penetration is typically about half of its customers as well. Given the penetration of the digital products, and the innovation the industry has participated in during the last 10 years — and throw in high-definition TV and DVRs — clearly consumers say today’s cable company is definitely a participant in the digital 2.0 world.

Professional Hand-Holders

With that kind of penetration of digital and high-speed, what should cable operators do to clarify consumer confusion?

Rooney: We have to clarify our product versus our competitors’. I’m more concerned with the messages coming from the RBOCs and DBS. Customers get hit with quite a few messages each day from our competitors that may confuse them. It’s up to me to help clarify how my services differentiate and compete. There are some important messages that we need to get out there….

Then is there an overall message your company and other MSOs must send to set themselves apart from satellite and the telcos?

Rooney: You have to send messages that get across your advantages. If you think about it, we’ve got a couple of years here where we’re really the stable provider in our markets. We’ve been operating for 40 years in many of our markets, and the RBOC has changed names several times in the last five years. Most of our RBOC competitors have gone through name changes and transitions, and that impacts their service and service delivery. The satellite guys have gone through their own changes in ownership. We have this legacy of being the trusted provider and of dealing with change in a very positive way. We’re clearly the friend in the digital age. Customers don’t buy products to talk to a friendly CSR. But they want to buy knowing that there’s somebody there to hold their hand when needed.

Why in the last two years have we seen bundle sales reach the point where it’s bringing basic subscribers back to MSOs?

Rooney: The bundle is proactive and reactive. It’s very effective at churn reduction. We see churn on our products has never been lower than it is now. The deepening penetration of the bundle is a big, big part of that. But it also works for acquisition. Customers want simplicity in ordering. They want to get a good deal and have some savings when they buy, so the bundle is very attractive at driving acquisition.

Is wireless the next piece of the bundle?

Rooney: There’s been some discussion of what the role of wireless is in our bundles. We’re looking at our wireless messaging as being something that you can take all you love about Cox with you wherever you go. That’s one of the phrases we’ve been playing with. It’s more about it being a nice icing on the bundle cake.

Other than wireless, what else is being considered for Cox’s service bundles?

Rooney: One thing we’re working on is tech solutions. That’s premium customer care, if you will. Today, if you call into some of our markets and say, "Look, somebody in my household downloaded something they shouldn’t have. I’ve got a computer virus, or I’ve got spy ware problems that are slowing down my PC. How do I get rid of this spy ware? How do I get my PC to work the way it should?" Previously, we’d send you somewhere else.

Now in several of our markets, and going further, we’ll dispatch you over to a Cox tech solutions department and, for a fee, we’ll help fix that for you. If you want your wireless home network set up, normally that’s not part of the standard install. But we’ll have this group of people doing that as well. We think there’s an opportunity in helping people with their home networks and their advanced wiring, or whatever they want, relative to high-speed Internet. Home theaters perhaps in the near future, too, but we haven’t gone there yet. We had four markets in trials of this service last year. We’re rolling it out under a standardized format.

How does this compare with customer relationship representatives, as implemented by Bright House Networks in Tampa Bay, where reps visit new advanced service customers pro actively? (see CableWorld, 8/14/06 at www.cable360.net)

Rooney: That’s an interesting strategy and I’d love to see the return on investment on it before commenting on whether this should go further. That’s an expensive proposition — visiting all newly connected homes. We still have a lot of people who move or reconnect seasonally, so there’s a lot of activity to follow up on. But what that has in common with our tech solutions strategy is that it’s hand-holding, going the extra step with the consumer, and that’s a good thing.

Should the entire cable industry adopt some type of hand-holding strategy, as you put it?

Rooney: I’ve been out of my parents’ house for 30 years. In that time, I’ve never had an RBOC employee in my home. They just never have come. We have a distinct advantage of people wanting us, expecting us to come and help them in their living room or in their den with their equipment. We should take advantage of that differentiation.

In the last year or so, Cox and Bright House Networks have topped some J.D. Power customer satisfaction surveys. Does this indicate that cable is finally changing perceptions about its customer care?

Rooney: The J.D. Power research is pretty thorough, and in the Western region we got their telephony service award the last few years. The last two years in a row, we won all nine categories they followed. Why did we not get attention for good service as an industry in the past? Perhaps we didn’t toot our own horn. I believe advertising works, and if you don’t market your strengths and your care, and you just let perceptions linger out there, that will be a problem. Second, back in the 1980 and 1990s, this industry didn’t invest enough in customer care. Jim Robbins, our former CEO, was smart enough to see that in the future, if we’re going to want people to increase their spending with us from $20 per month to $150 per month with the triple play, we would have to do a lot better at care.

Competition: Agent of Change

How seriously are you taking the threats from satellite and from Verizon and AT&T?

Rooney: [Cable has] a huge amount of share in video and Internet. Two-thirds of high-speed Internet customers buy from us, not from the RBOCs. It’s all about being a triple-play provider, and we worry more about the RBOCs than we do about any other competitor, because they are going the same route as us. If you’re asking how competitive it’s going to get, it’s going to get extremely competitive. We’re in the midst of changing the culture of our company to recognize that. From how we do our planning to how we execute our care, every employee here is going to realize that we take competition very seriously.

Does that culture change include exposing yourself in more venues — getting more involved in retail, outreach, program promotion?

Rooney: Possibly. We use event marketing, for example, where it makes sense. We don’t take a lot of off-the-shelf programs from our programming partners. We have a great partnership marketing organization and we work with our friends in public affairs and Cox Media. We’re not interested in being a logo slapped on to the end of somebody else’s marketing effort.

You chair CTAM’s national board of directors. Any marketing initiatives the board will recommend operators implement this year?

Rooney: Yes. CTAM has a number of arms and legs to it. There’s an MSO co-op, and we work to look for where we can be more effective cooperatively than singularly. There are some efforts going on, most of which are still in the production phase and not launched yet, but you will see new advertising and marketing from this co-op this year. The first campaign will roll out in late March or early April.

Are there features or content that will trigger more VOD use?

Rooney: Day-and-date movies with theatrical or with DVD would be a huge upgrade and drive a lot of usage into VOD. User-generated content is the hot thing on the Web, and I enjoy watching some online videos as well. I don’t enjoy the jittering, or the fact that I watch them on a small screen. To be able to see these videos from my cable company’s server on my big screen would be a big benefit. The Start Over trial Time Warner Cable has going and the ideas Cablevision had espoused with VOD are interesting. People want to watch their favorite programs, and want an easier watching experience. We need to do that.

How is Cox working to expand bandwidth?

Rooney: What Chris Bowick, our chief technical officer and SVP of engineering, tells me is that there are many levers we need to pull to maximize our bandwidth delivery. That includes switched digital video, channel bonding and changing our node sizes. Also reducing the number of analog channels would dramatically impact bandwidth delivery.

We’re fewer than two years away from the government-imposed digital transition. What must cable do to make this transition?

Rooney: It will be interesting to see if the digital transition date holds, and I wouldn’t put a lot of money on that. But I’m a marketing guy, not a regulatory expert. If it does hold, it could be a marketing opportunity, given the fact that our customers will be fine.

You’ve been at Cox for two decades. How do you account for your success and longevity there?

Rooney: Cox has terrific marketers, and they make me look good. We have people who want to do right by the company and by the customer. I can’t imagine a better job in the cable industry.