Cable Runs Through The Land of Adobe
Byline: ANTHONY CRUPI
Everyone has a New Mexico slide show in his head, a stuttered progression of postcard imagery that stands in place of any actual empirical knowledge about the Land of Enchantment. Say “New Mexico” and the average American immediately free-associates a panoply of sun-dappled arroyos and Georgia O’Keeffe cow skulls. Those of a more hysteria-minded bent may be given to visions of Gila monsters and mushroom clouds. Adobe, a certain rugged high-desert tan and a whole lot of handcrafted silver jewelry round out the mix.
Which is not to say that these elements don’t truly exist in New Mexico – in fact, most of the above, minus the poisonous lizards and the A-bomb, are a big part of what draws people to the region. But there’s a lot more to the state than meets the (mind’s) eye.
According to Richard Florida, author of The Rise of the Creative Class, the kind of artsy, outdoorsy environments fostered in areas like New Mexico actually help spur economic development. When Florida rated Albuquerque, N.M., No. 8 in the country on his creativity index (an aggregate of such factors as workforce tech savvy, innovation and diversity), he was only reinforcing something most of the city’s residents have known for years.
“Albuquerque is one of the fastest-growing high-tech markets in the country,” says Lisa Dettweiler, VP/GM of Comcast Cable’s Albuquerque system. “People are returning to the area because of the energy and opportunity here.”
Like the city it serves, Comcast is fully committed to the digital life. In 1999, the cable op began the upgrade of Albuquerque’s 3,200 miles of plant, converting a 450-MHz analog network to a two-way, HFC-based 870-MHz operation. The project was completed in 2001.
According to Jeff Frazier, Comcast’s area director of engineering, the crew was met with “quite a few challenges” as they worked to tie together its multiple franchises. “It’s a huge area, about 50 miles by 40, and we had to cover a lot of ground,” Frazier says. “Some of our service areas were split by the Sandia mountain range, so we had to extend fiber through a pass along I-40 over to the east. And to the west, we had to cross the Rio Grande, which was also a challenge.”
The region’s rugged geography wasn’t the only hindrance the Comcast team faced. Because digital service was contracted by the Isleta Pueblo – a sovereign nation located 14 miles south of Albuquerque on the west side of the Rio Grande – the upgrade had to proceed with respect for the land and the people who make their home there. “It’s sacred land,” Frazier says. “Any time you have to put a shovel in the ground or anything else that may disturb the land, you have to do an archeology study. It’s a demanding process, but we got it done in record time.”
That kind of sensitivity for cultural mores goes a long way toward illuminating the sort of regard with which Comcast is held in the community at large. Much attention has been paid to the Comcast Cares program, an employee volunteer initiative that Dettweiler says is rooted in the MSO’s corporate mandate.
“Albuquerque has had one of the top turnouts in the company in terms of the number of volunteers we’ve drummed up and the amount of hours our people have put in,” she says. This year, the Cable Television Public Affairs Association (CTPAA) has honored the system with four Beacon Awards in recognition of its outstanding community service record.
Of course, service is only a part of Comcast’s directive; at the end of the day, a cable company’s main function is to provide entertainment to its customer base. To that end, the Albuquerque system has begun to take advantage of its new fiber by offering interactive video service.
“We’ve had a pretty solid VOD run,” says area director of marketing Christie Coletti Rossi. “We did a systemwide pre-launch for six months or so, and today it’s available to all of our digital customers.”
Video-on-demand content will be limited until Comcast can strike further deals with content providers. “A lot of the content we offer now is licensed through providers we’ve had previous relationships with, like Discovery,” Rossi says. “We don’t have the rights to a lot of content right now, but we will.”
Although Albuquerque is not offering SVOD at present, TVN Entertainment was selected as the system’s transport partner last March. Under the terms of the trial agreement, TVN will manage and deliver content that may be licensed to Comcast by HBO, Showtime and other programmers at some future date. (If Comcast HQ’s “triple bucket” model of free, movie and subscription VOD content is a success in Philadelphia, expect the same approach to get a trial in New Mexico by Q4.)
Frazier puts the contingency rates for VOD at 10% throughout the network, although the present demand is nowhere near as high: “That’s our theoretical average, it’s our target. But we did quite a bit of engineering to anticipate usage of product.”
For the time being, VOD will be the only two-way service Albuquerque launches for the foreseeable future. Dettweiler says that there are plans to roll out a DVR product in time, but stresses that no target date has been set.
This slow ramp-up is consistent with the system’s guiding principle, which may be best articulated as “leave no cable sub behind.”
“Our No. 1 challenge is keeping up our basic customer growth,” Dettweiler says. “HSD, VOD and digital are all good products, but their value has to be assessed in terms of how they can help us continue to grow.”
Between a host of new building opportunities that have cropped up in the past year, as well as an aggressive approach to greenfields, Comcast Albuquerque is actually growing this year, Dettweiler says. “This is all part of a systemwide initiative we call ‘retain the gain,'” she says. “It helps to clarify everyone’s goal of customer retention.”
But what kind of competition does Comcast face in Albuquerque, anyway?
The company puts satellite penetration at 10.7%, although Scarborough Research suggests a more persistent DSB presence; according to its data, 19% of people in the DMA own dishes. That’s a fair amount, a good 16% over the national average, and it helps keep Comcast on its toes.
“The main point we like to get across when we speak to our customers is that no one can serve you like cable can,” Rossi says. “We average about 8 inches of rain per year, so that’s not an issue, but we do have a lot of wind here. High winds, the kind that can knock a dish right off your roof. There’s no guaranteed service for something like that. But if you’re a Comcast customer, we’re there within 24 hours.”
One key stratagem by which to defend against churn, then, is to provide reliable customer service. There’s a lesson at work here. Cable One, which has hung its shingle just across the Rio Grande from Comcast – offering a digital package of 170 channels, plus movie and music offerings – has heard a litany of customer rumblings in the past year. When the time came for the MSO to apply for an extension of its franchise agreement with the city last August, dissatisfied subs petitioned Rio Rancho’s Cable Regulation and Usage Committee to refuse the re-up.
After customers groused about everything from their data rate speeds to poor picture quality, Cable One elected not to renew its franchise in September 2002. Its license expires on Jan. 1, 2007.
It’s interesting that HSD proved to be such a bone of contention for Cable One and its customers, as Internet service provides the company its best margins, which happen to be growing at a rate of 10% per year. Yet HSD service is still not available in all Rio Rancho locations, and the data rates offered (500kbps and 1,000kbps) come up short next to Comcast’s 1,500-kbps plan. (Rossi calls HSD “the fastest-growing product [Albuquerque] ever launched.”)
The heat on Cable One was nothing compared to what Comcast felt back in January 2002, when Albuquerque Mayor Martin Chavez effectively called the op a “deadbeat.” The slight came as the city had been talking with Comcast about continuing its franchise agreement, which had expired in April 2000. At a press conference Chavez told reporters that Comcast had been late in paying its franchise fees each quarter, and that should the delinquency persist, the city would “sue them.”
Comcast reached an agreement with Chavez in May 2002 that will allow it to continue to provide service to Albuquerque residents for the next 15 years. Tina Otteni, a public-relations director for Comcast, says the company spent $100 million upgrading the network, even though its franchise had lapsed. “That just shows how committed we are to the community we serve,” Otteni says. “We decided to go forward in good faith, without a contract, to make an investment in the community.”
True to their roots, the community has invested back. Mary Ann Weems, owner of the lauded Weems Gallery, says she buys on average from “about $6,000 to $10,000 worth of ads every year.” Weems, who also operates a small ad agency, handles all her buys.
“My cable spots average about $30 for each 30-second spot,” Weems calculates. “With those kind of rates, I get to saturate the market. Compare that to $400 for the same 30-second spot on one of the networks, where you’re on and then, boom, it’s gone. That’s why I love cable.”
Weems says her gallery and the annual Weems Artfest show attract a clientele that ranges from 18 to 80, a spread which cable serves more effectively than do the nets. “I don’t go by the numbers. I pick and choose where I want to place my spots. I like scary movies, so I advertise on Sci Fi. But I’m not stupid; I know that Home and Garden is where I need to be. At the rates I get, I can afford to mix it up a little.”
Much as she’s become a figure of renown – friends tell her she could run for mayor – Weems doesn’t put herself in her ads. “Art is what’s important. The artists are what’s important. I’m not some car salesman screaming at the top of my lungs, jumping up and down,” she laughs.
Of course, those kind of spots, the ones that feature pitchmen screaming over a palette of helium balloons and guys in gorilla suits, are the bread and butter of the local cable ad space. John Hurley, GM of ad sales for Albuquerque, says his market is no different. Automotive is at the top of the heap, followed by quick service restaurants and DIY.
“The phenomenal growth in ratings of the cable network programmers – the ESPNs, the A&Es – have driven our subscriber levels, and in turn, our ad sale rate,” Hurley says. “The big investment cable has made in original programming and sports has been a big boost for us. We’re a metered market, so we can see the effect of this kind of thing the very next day.”
With a total of 24 total account executives reporting to him, Hurley and the Albuquerque interconnect have begun to outpace the local broadcasters in terms of market growth. “Because we can now offer advertisers the choice to cover the entire DMA, they see us as a viable alternative to broadcasters,” Hurley says.
In other words, it’s a good time to be in cable.
“I remember everybody would run behind the trucks when they first put cable in the neighborhoods,” says VP of finance and interim area VP Kevin Bethke. “That’s the feeling we’re getting again with digital.”
Advertisers may well wish to add that image to their own personal New Mexico slide shows.
MILES OF PLANT: 3,200
PERCENT UPGRADED: 100% at 870 MHz
HOMES PASSED: 513,617 (in New Mexico)
BASIC SUBSCRIBERS: 127,000
BASIC PLUS RATE: $38.29/month for expanded basic lineup of up to 75 channels
DIGITAL RATE: $49.49 to $85.95
HSD RATE: $39.95/month for customers, $54.95 for non-subs (plus $5 modem rental fee)
HD: Launching late 2003
VOD: Launched in late 2002
AD INSERTIONS: Available on 45 analog channels
SOURCE: COMCAST CABLE
MEET THE OPERATOR
Lisa Dettweiler VP/GM
Dettweiler has 14 years of experience in the cable industry in several capacities including public relations, commercial sales, media buying, marketing and most recently as the area director of customer service in the Southwest. In 2001, she was selected as one of New Mexico’s “Forty Under 40” up-and-coming business professionals by the New Mexico Business Weekly. Dettweiler has a B.A. in communications from the University of New Mexico.
Kevin Bethke VP of finance and business operations
Bethke has financial responsibility for over 300,000 customers and 700 employees in New Mexico and Arizona. He has been in the cable industry for over 19 years and holds a B.S. from the University of Wyoming.
Christie Coletti Rossi Marketing director, Southwest
Rossi joined Comcast in 1996 as a marketing coordinator in New Haven, Conn. She currently is responsible for growing and retaining customers in all product categories for the New Mexico and Arizona markets. Rossi holds a degree in marketing and communications from Babson College in Wellesley, Mass.
Jeff Frazier Director of engineering, Southwest
Frazier joined the cable industry in 1983 and Comcast in 2001, as a director of technical operations in Albuquerque. He is currently responsible for the deployment of new technologies, network upgrades, new plant construction and field operations for the New Mexico and Arizona markets. Frazier received electronics training and education from the USMC and Cleveland Institute of Electronics and attended Blue Ridge College.
John Hurley GM of ad sales
Hurley’s ad sales unit has seven offices and 60 employees throughout New Mexico. He has over 25 years of television experience as a national representative, sales manager and general manager. He joined Comcast in 2002 from KASA Fox 2 in Albuquerque.
Comcast Albuquerque Scarborough Research Profile
Comparison of consumers in Comcast’s Albuquerque service area to the top 75 market average.
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COPYRIGHT 2008 Gale, Cengage Learning