Robbins: New Data Backs Bundle12/17/2000 7:00 PM Eastern
NEW YORK -Once subscribers buy telephony or Internet access services from their cable operator, the chances are better that they won't jump ship to the competition, Cox Communications Inc. CEO Jim Robbins told the New York Cable Club last week.
Citing Cox research, Robbins said 91 percent of customers that buy a bundled package stick with the MSO after six months, while 84 percent of those who subscribe only to its video service remain subscribers after six months. Offering discounts to customers who take multiple services is key, he added.
"Bundling creates a wonderful exit barrier, so when our customers decide they don't want one of our services, they will lose part of the discount that they have," Robbins told about 165 industry executives who attended the cable club luncheon at Tavern on the Green. Multichannel News
parent Cahners Television Group was an event sponsor.
The same day, Robbins also spoke at a bond-investor conference sponsored by UBS Warburg.
Although Cox has introduced data and telephony services more quickly than most MSOs, Robbins said the company could be doing better on the execution side. "We don't do it as well as I would like us to do it," he said.
Though he warned attendees "DBS competition is serious," Robbins took delight in discussing the effect of the stock market slide and a drain in capital markets on competition from overbuilders.
"The good news is that some of the [readily available] financing coming along to some of our competitors is drying up. The bad news is, it makes it harder for some of our colleagues who are building out robust plant," Robbins said.
Asked about major problems in Cox's Phoenix system, which has lost many subscribers to a high-speed video digital subscriber line Internet-access service from Qwest Communications International Inc., Robbins insisted the outlook is better.
"We are rebuilding our [Phoenix] system as fast as we can.I think that we're going to be fine. The worst of our issues are behind us," Robbins said.
Discussing the contentious open-access issue, Robbins said Cox is in talks with "several potential partners" to launch trials with Internet-access providers next year, preceding "business propositions" with ISPs.
The Cox CEO said he didn't know whether potential open-access conditions the Federal Trade Commission might place on the merger of America Online Inc. and Time Warner Inc. would affect other MSOs, but said "it would be an overstep to apply that brush if you will to the entire industry."
Looking ahead at next year, Robbins said a sagging economy could actually help the cable industry.
"If the economy is a little bit skittish next year, people will stay home more. They're going to be watching more television. They're going to be on their computer more at night, and that's good for us."