WOW! CEO speaks about the cable industry
Feb 23, 2013 (The Augusta Chronicle - McClatchy-Tribune Information Services via COMTEX) --
WOW! Internet, Cable and Phone officially staked its claim in the Augusta market in mid-2012 after the company acquired Knology, although the branding hasn't changed. That will happen in early March as the company begins transitioning from the Knology logo to the yellow WOW! symbol on offices, employee uniforms and business trucks.
CEO Colleen Abdoulah, who joined WOW! in 2002, discussed the company's plans in the Augusta region where it has about 25,000 customers and the biggest changes facing cable providers across the country.
Abdoulah also is the chairwoman for the American Cable Association, which lobbies on behalf of independent cable providers.
Q: Why did WOW! acquire Knology
A: I think geographically it made sense because we have now three regions: one in the Midwest, one that we call Central and then the Southeast. We're sort of contiguous, and it made operating sense. We know how to compete against the big providers in the market. We like the diversity of markets, so we have urban and now we have more small communities. We liked the fact that we can expand in many of the markets through new build. We have that opportunity, whereas the big guys who have built out everything don't have that. We liked that Knology properties had focused on serving businesses. And we knew the company. We felt like they had the same work ethic we do.
Q: What has been going on with the company since the acquisition was made final in July
A: We wanted to understand every market and the uniqueness of every market. We wanted to take the best out of Knology and the best out of WOW and combine them.
We spent most of 2012 accessing who the best people were, what we should keep doing (and) what we should stop doing. As far as Augusta goes, there weren't that many (employee reductions), maybe two to three people.
As far as Knology as a whole, there were some duplicate positions that were obviously eliminated but overall, we're investing more than we're reducing.
Q: What changes have been made
A: They used an operating system that is different than ours. It's all your billing, activation of all your services, tracking of customers.
The first thing we saw is to covert them off that system onto ours so we're all talking the same language. The second thing we noticed is wanting to upgrade so that we have more bandwidths, can provide more video alternatives and higher video speeds.
And I think the third thing was just to acknowledge the difference from the Midwest markets to the South.
We've always just done everyday pricing, and we guarantee that price for up to two years. We'll be introducing that here in Augusta. There was a rate increase (of $2-$5 depending on market) that just went through, but that's annual. We don't intend to raise rates out of that process.
Q: What can customers expect to see from WOW! in the future
A: Come March, people will see the trucks saying WOW! and our signage in front of our buildings. They'll know that it's official from an external branding standpoint. For Augusta, what we're looking to do is to upgrade the systems to an all-digital platform, which frees up bandwidth and allows us to add more HD channels, more VOD (video on demand) and eventually prepare it for an IP (internet protocol) platform.
We have the capital to invest in upgrading the systems.
Q: Does WOW! plan to expand local coverage
A: We have a pocket of customers in Fort Gordon that we're going to be connecting into the Augusta system over the next few months. Outside of that, we don't have plans to invest in any new communities until we upgrade the ones we have.
Q: How has the cable industry as a whole changed in the past decade
A: I think the amount of competitive products and choice has been a big difference over the 28 years I've been in this industry. I think the explosion of the Internet and just the insatiable appetite that consumers have for video, specifically on any device, any time, anywhere, is going to fundamentally be a sea change and change the overall landscape for the current biz model, which I'm excited about. The current business model is basically run by the programmers. They've got a lot of leverage. I think consumers are going to change that.
How exactly, I'm not sure, but as a company I'm confident that we're positioned well for whatever change occurs.
Q: How has the company adapted to the changing market
A: As long as you're getting our Internet service we don't care how many ancillary services you sign up to because we're providing you that connection and that's where we're making our money. We want you to be able to use it and choose. Where it's difficult to us, as cable operators, is we pay per subscriber for that content. If you want to watch ABC or CBS on the Internet than it's free. Why is it free Because your cable operator is paying for it. That's what's making the whole business model so difficult for content providers. What you have to do as a CEO of a company is protect the jobs of your employees, Everything we do, we try to do it three to five years out, which is hard in this environment because technology is changing so rapidly.
Q: What does the future hold for cable providers
A: Research is showing that 60 percent of TV viewing is done through the DVR. The altered TV product is exactly what people here and in the markets that we've launched in just love because it gives them the kind of choice that they want.
I think that's what we're anticipating is that behavior is only going to continue. We need to continue to increase our Internet speeds for the increasing bandwith usage. There was a day when 2-megabits was just plenty but now people are at 15- and 30- and 50- mega, not that the average person needs that much but you want to be able to provide it for those that do.
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