Quick Jump Menu to this Month’s Articles A New Mug in Town Seven Degrees of Separation Between Motorola and Iraqi Freedom NLC User’s Group Take-Aways Another Subtle Technique for Promoting Video Services Small Really Can Be Beautiful Call for materials from Telcos involved with FRED
April, 2003
NLC User’s Group Conference Take-Aways
by Ken Pyle
Congratulations to the organizers of the NLC User’s Group conference for a well-executed event. With an Executive Committee comprised of actual users and much of the execution carried out by Next Level employees, they did a great job of assembling an appropriate mix of technical, marketing and regulatory presentations. And the topics of the sessions included digital headends, integration of VOD, and marketing video and data services. Next Level, other suppliers and operators all spoke at this two and one-half day confab.
In addition to the conference, a number of suppliers, including Viodi, exhibited their services and products which were complementary to NLC’s product line. For various reasons, I did not have the opportunity to attend all of the sessions, so the following are highlights of some of the things I did see and hear.
The “Integrating VOD” session was anchored by Tony DiStefano, General Manager of Allwest, an independent telco in Utah that has deployed VOD. Presenters included Myrio, TVN and Kasenna.
Chris Kirschten of Myrio discussed their user interface and back-office software that allows a telco to offer VOD services on either an ADSL or VDSL video system. Kurt Heisler of TVN which, to date has been the primary supplier of content to independent telcos offering VOD service, discussed TVN’s network topology for distributing content, as well as the breadth and depth of their content relationships and the cost points for a telco using their services. Kasenna presented an overview of their VOD software, which is unique in that it is the only hardware independent server solution being marketed to independent telcos.
Proving the business case was the big concern among the telcos I talked to after this particular panel. It is clear from these discussions and my experience that the business case is going to be specific to each telco and will depend upon a number of factors, including the size of the subscriber base, programming and the state of competition. One of the more interesting business case factors was brought up by Yuval Schwarz of Kasenna who pointed out that local content could be a big product differentiator for the independent telco that is deploying VOD.
Sounding a similar theme, Bridget McKee of Horizon Chillicothe and Gary Johnson of Paul Bunyan Telephone discussed the importance of local content as a tool for acquiring new video customers. McKee told of Horizon’s video production of the town of Chillicothe’s month-long, bicentennial anniversary and how they were able to create their own “mini-series” that airs every Wednesday. It has been so popular that some of their customers want to purchase the videotapes.
Bemidji, MN is probably one of the smallest towns to have its own weather channel. The clever and enterprising folks at Paul Bunyan figured out how to use the power of the Internet to create a channel that provides weather information customized specifically to their town and region. It has proven to be a “sticky” service further distinguishing Paul Bunyan from its cable competitor.
Charlene Taylor, President of Chaz Taylor, Inc., emphatically stated that the introduction of video provides a chance to “reconnect with customers”. She used words like “play”, “fun” and “exciting” to describe the telcos’ transition to an entertainment provider. She provided a real-life example of how a telco can spiff up their business office when she presented a “welcome matt” carpet shaped like a giant television remote control to one of her customers.
Sheryl Novak, a Canadian cable industry and consumer marketing veteran explained her perspective on launching video services. She has had a great deal of recent experience helping a large Canadian telco with their launch of video services. She focused on the importance of defining a product category and then owning it by being the dominate player in that category.
Geoff Burke of Next Level talked on the same theme of defining a “whole product” offering that closely “maps the marketing to the service offering.” Although a very academic approach, he brought the presentation to life by giving specific examples of how Next Level customers have successfully applied these principals to achieve outstanding service penetration rates.
And the conversations I had with telcos at this show indicate that video success is pretty widespread. By overbuilding adjacent exchanges, one telco has increased their line count by over 80%, while another has increased their count by 33% or 20,000 subscribers. This is significant growth, as it is occurring in this era of a dotcom bust and by companies that are very mature.
But alas, nothing can be as simple as marketing and engineering, the dismal science (economics for all of you who took the history elective in school instead of economics) reared its head at this conference. Actually, the presentation from Sal Talluto of NECA touched upon the various costing methods a telco can choose when offering video service. In addition to the economic considerations, there is a mix of the political in the form of the regulatory concerns.
Like anything else with economics, the choices all have constraints, such that there is not one “best answer” that applies to all telcos. It is an intriguing problem as to how to fairly allocate costs for a non-regulated information service like video. What I got out of that meeting, however, is that this is too big a topic to try to cover in this issue of the Viodi View and, like politics, even a discussion of this topic among good friends can quickly turn into a heated argument.
Despite the challenges of the costing methodology, I came away from this conference even more encouraged that the independent telcos are going to increasingly be the dominant providers of interactive television and VOD in both their existing and their expanded service areas.
Copyright 2003 Viodi, LLC. All Rights Reserved
Viodi Booth at NLC User’s Group Conference
Leave a Reply