Cable Operators

Time Warner Thinks Regionally

1/02/2005 7:00 PM Eastern

Time Warner Cable will put more emphasis on building its retail presence this year, creating stores like the one it recently opened in the Milwaukee suburbs in “any division that makes sense,” executives said.

The Milwaukee store is a 4,000-square-foot outlet in a major regional mall, but divisional retail sites could be as modest as a kiosk, according to Charles Haugabrook, vice president of sales channel development at the second-biggest U.S. cable operator.

DIVISION DECISIONS

Decisions about where to site stores and on the size of retail operations will be made on a division-by-division basis.

“This will be a partnership between the divisions and corporate,” Haugabrook said, with the corporate office investing in the overall strategy and using corporate influence to get the best prices for hardware, such as HDTV display monitors.

The divisions will examine the local business and real estate markets to select the best locations and appropriate sizes.

“It’s become so competitive in the [retail] sales marketplace. We have to be there in terms of having a presence where consumers are going, with their wallets open,” Haugabrook said.

Haugabrook has been quietly building his team for the last year and a half, hiring executives with experienced in retail sales, as opposed to ones with the majority of their experience in cable.

He would not say how many stores the operator planned to open in 2005.

Time Warner Cable’s store strategy does not mean that the operator plans to retreat from deals for better representation in big-box consumer electronics and department stores.

He acknowledged that direct-broadcast satellite providers have trumped cable operators, gaining high-profile product displays in such popular stores as Best Buy.

Time Warner is pressing to get more point-of-sale marketing materials and end-of-row displays in the same stores.

“It’s very important to own as much real estate there as possible,” said Haugabrook. Time Warner hasn’t made up the gap, he said, but “we’re getting there.”

FOCUS ON CONTENT

Cable also needs to alter its sales focus at retail, he said. In the past, cable operators have marketed product benefits.

Now, Time Warner chooses to differentiate itself from DBS or telephone company offerings by focusing on content, he said.

MUSICAL FOCUS

Music will receive special emphasis and Time Warner is leveraging its corporate relationships for this initiative.

In a deal with Universal Music Group, Time Warner Cable has signed songstress Vanessa Carlton to be at the center of its retail campaign, Haugabrook said.

“Retailers want creative, content-oriented offers,” he said.

Thus, Time Warner is working with networks, music companies and sports properties to develop deals.

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