Cox President Calls Luring ‘Echo Boomers’ Top Challenge
Cox’s biggest challenge is luring “Echo Boomers” and their Baby Boomer parents with new services, portable devices and mobile content, said Pres. Patrick Esser. Cox’s products must remain attractive to the changing tastes of those 150 million people, he told a Media Institute lunch gathering. “Echo Boomers want mobile content…and they will take their parents right along with them,” Esser said. “They've been pausing live TV for years” and prefer to use a PC over a TV, he added.
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Half of TV viewing will be spent on time-shifted content by 2010 in homes with PVRs, Esser said. That would mark a 20% increase from Cox customers’ current estimated usage. But users won’t want to pay for each program they view, he said. “I don’t think the average customer wants to pay on a per-transaction basis,” Esser said. Broadcasters have a role; Cox wants to work with TV stations on creating more local content as VoD and digital TV are more widely used, he said.
Esser downplayed the threat low-cost VoIP providers pose to Cox’s phone expansion. He said customers will be won by services such as reliable 911 access, not price. But Esser acknowledged some will be swayed by cheap VoIP with fewer features. “If that’s what consumers want, that’s where consumers are going to go.” Competition from companies including Skype hasn’t affected Cox’s growth, Esser said. Downplaying his company’s role in Tempe, Ariz.’s municipal Wi-Fi project, he said: “The wireless network in a city is still a questionable business model.”
Digital simulcasts will be available to all Cox customers by 2010, and 75% will pay for digital TV, Esser said. More than 2/3 of such subscribers will have PVRs and 65% will get HDTV, he predicted. Cox hopes to move all subscribers to digital service once set-top box costs decline enough to make it affordable, Esser said: “There is an inflection point. Is it 2010, 2009, 2012? I don’t know.”
Cable’s main challenge with viewing habits changing is to make content portable, said ABI Research’s Vamsi Sistla: “There will be time-play shifting and device shifting, where you're easily able to acquire the pay content on a multitude of devices,” he told us. “There are a multitude of issues the industry must deal with on broadcast rights.”
Esser’s comments on regulation largely echoed other cable operators’ stances. He did lash out at what NCTA Pres. Kyle McSlarrow has called “special favors” sought by AT&T and BellSouth, which agreed to a $67 billion merger (CD March 7 p4). “Companies the size of an AT&T/BellSouth don’t need any help,” Esser said. He said a “level playing field” is his top legislative priority. “Don’t create rules that aren’t needed.” Though he wouldn’t rule out offering channels individually, he said: “I don’t think it needs govt. intervention… This industry grew up as a package -- that’s how we were able to keep prices low for programmers.”
Govt. shouldn’t enforce net neutrality, Esser said: “I appeal to lawmakers to let the market create winners and losers,” which is “no easy task.” Cox, like other cable firms, has a “managed” network to avoid slowdowns but doesn’t block access to any websites, Esser said. The company may offer premium-priced broadband packages tailored to the bandwidth needs of customers who play lots of video games and users who download music, he said. Top broadband speeds, now about 10 Mbps, could triple over 4-5 years, Esser said: “We're still in a market share game. Speed is still a major differentiator.” - Josh Wein, Jonathan Make