Q&A Interview with Glen Friedman - Ideas and Solutions

Glen Friedman, owner of Ideas & Solutions consultancy, has been involved in the cable operator world for 30 years. In that time he has seen many changes and challenges to the business. In this in depth interview, Glen gives us his insights into the changing television landscape and the impact that new technology has on the current operator model. Flexibility and prescience is required in navigating the MSO landscape.

CW: Glen, can you tell me your background- how did you get to where you are today?

GF: I joined the industry in 1981 as a Marketing Manager for ATC, now Time Warner Cable. I worked for ATC / Time Warner for 10 years in a variety of field and corporate positions ending my tenure as Vice President Marketing, Programming and Ad Sales for Manhattan Cable. I then joined Century Cable as the General Manager for the West L.A. systems and was then recruited to DIRECTV where I was a key architect of the launch plan as Vice President of Consumer Marketing.

CW: Tell me about your current company, Ideas & Solutions! Inc.

GF: I formed Ideas & Solutions! 16 years ago. We provide outsourced business development, business and marketing strategy and due diligence services to leading and emerging media and technology companies. Recently we have been focusing on the changing landscape of television, specifically, cord cutting and cord shaving. We recently published a study of Gen Y consumers (18-29 year olds) and their orientation and thoughts towards traditional subscription television vs. getting the services without cable, telco or satellite. Interestingly, we found that there was a large, loyal segment of television only viewers but almost 60% have or would consider switching to Over the Top-video service in the future. For this group, cost and value are driving factors as is their comfort with new technology and their desire to get what they want when they want it.

CW: 60% is a large consideration set for the next generation of cable customers. Do you think cord cutting or cord shaving is a business changer for operators?

GF: Both cord shaving and cord cutting will have tremendous impact on all aspects of the cable business for both operators and programmers. It will impact RPU and marketing costs. For programmers it will be very challenging to hold package positions for networks not secured by retransmission leverage or sports.

CW: What do you recommend the operator do to avoid losing a substantial part of their future business?

GF: I believe TV Everywhere is a great step in increasing the value and usability of cable to customers who want content when and where it’s convenient for them. But TV Everywhere is not a sliver bullet and must be combined with a strategy that focuses on building a valued brand, meeting and hopefully exceeding customer expectations related to customer service and technological innovation. Comcast, for one, is doing a good job on all fronts as demonstrated by its investment in marketing the re-branded XFinity brand, its focus on fulfillment/service delivery service windows and the company’s overall focus on UI and technology (expanded broadband delivery). In addition the cable industry needs to focus on the cost of content, which poses a real risk/challenge to programmers who are trying to hold onto distribution and increase their rates.

CW: Is the future for MSOs in wireless? Why or why not?

GF: More and more consumers will demand wireless access to content. I doubt that wireless will replace wired delivery for a long term, if ever. But it is critical for operators to provide their customers with solutions that deliver content remotely and TV Everywhere is a great start. It’s a challenge for operators to gather sufficient spectrum to compete effectively with the major carriers on a national basis y. It will be very informative to follow the Cox roll-outs of its bundled wireless services.

CW: If you were a cable operator today, what would you be doing to plan for the future?

GF: Invest in service and reliability, identify most at-risk groups and develop specific marketing plans and approaches. Also, measure performance by segment, not just across the entire base. Invest and take actions to secure new revenues from business services, interactive advertising and home security/home automation.

CW: What are other challenges for cable operators?

GF: Content costs associated with Sports rights and retransmission, preparing for new competitors including other operators. The fulfillment and delivery of more and more complex customer offerings both via call centers and in the field is an immediate challenge. In addition operators must work to enable meaningful measurement of multi-screen viewing to help programmers protect their advertising revenue stream.

CW: What are some opportunities for cable operators?

GF: I believe there are exciting and meaningful opportunities to derive new revenues from Interactive advertising, further penetrating the delivery of voice and data to business customers and through the sales of security and home automation.

CW: Glen, please give me three predictions for the next five years.

GF: Without a doubt, the consolidation of operators will continue. Also, in the next five years operators and DBS providers will compete on a national basis meaning that franchise areas will be much less meaningful as a marketing territory for cable operators. In order for this to happen the technology needs to continue to evolve and the distributors need to get the rights to distribute the content outside their franchise areas -- or in the case of satellite providers deploying other technologies like DISH Network is attempting. The major distributors are already seeking these rights. This will further increase the movement to consolidate on the operator front; I would not be surprised at least one of the top 5 operators is merged within the next five years. And finally, connected sets and proliferation of online content will lead to more cord shaving/cutting. The ease of getting content outside the walled garden of cable will impact RPU and how services are packaged.

CW: Thank you for your time. Great interview.

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