If Only Time Warner Cable Was More Like A Restaurant…

I’m eagerly awaiting the day when I can get my football (soccer) fix in HD and not through cable. It is the only thing I need to watch live. It is the only thing that relies on its timeliness to be of interest; everything else, and there isn’t much, is time-shifted.

With a combined Internet and Cable bill at $170 a month, I made up my mind that until such day comes and I “cut the cord”, I will start by dropping the Premium Channels I had. Ween myself off gradually. So goodbye HBO, Showtime, Cinemax and Starz, you have been great. When I can get you directly, I will gladly take you back.

My decision made, I went online to find a site which allows easy addition of new channels and services, but not their removal. I had to resort to chatting to two representatives to accomplish this. When I asked to confirm the new price, cross-referencing the one displayed on their site, I was informed that was a new customers only price, mine is higher.

And so, the next trigger was born: If only Time Warner Cable was more like my neighborhood restaurant. Then I might actually want to stay a customer…

I have been with Time Warner for over 8 years. A quick calculation estimates a spend of over $15,000 as their customer, a sum I find ludicrous and terrifying in equal measures. And yet, no special offers, not even a “You know what, keep those premium channels until the end of this billing cycle, on us. As a thank you for your continued business“. The channels were removed the instant I confirmed the rep’s action. New customers on the same plan as me, by the way, pay $40/month less for their first year. $480 acquisition cost.

The acquisition game is not unique to cable companies. Cell phone carriers, among others, also play it but unlike cable they at least entice existing customers with subsidized new phones at the conclusion of a contract. This is not news to anybody, but this country’s top service companies only care about customer acquisition; customer retention is just never as much of a priority. Mind you, I don’t stick around because TWC is so great, but because I have no other options; they are the only company servicing my building so it’s them or nothing.

It is a backwards approach to what is ultimately a commoditized service. It does not offer any uniquely inherent value. It is in a sector that is ripe for disruption and will be thrown on its ear soon enough. No matter how they try to portray themselves, they are currently just a dumb pipe. Cord-cutting is getting more and more mainstream, more options are available every day. And without belaboring the point, with the economy as it is, their priority should be to move up the value chain, ensure those signed up stay signed up and find ways to get more out of them.

Neighborhood bars and restaurants get it right: a free drink, appetizer, dessert show up at your table, making you happier, which often results in higher tips, higher likelihood of a return visits which lead to additional revenues. Next time you are there, a customized greeting or a “welcome back!”, you might even bring a friend who hasn’t known of the place; if you become a regular, you are likely to introduce the place to many new customers. Perhaps oversimplified, but a $7 acquisition cost can translate to thousands more in additional direct and indirect revenue.

They construct a more gratifying, satisfying experience, and strengthen their positioning as a preferred destination. Compare, or rather, contrast that with the cable company. When was the last time you heard somebody gushing over their interaction with an on-screen menu? How many Instagram photos have you seen of a set-top box? While the content is enjoyable, the middlemen is either ignored or seen as a necessary evil. There is no incentive to stay, and there is no delight in the service, it is a default selection.

So can Time Warner Cable be more like my neighborhood restaurant or watering hole? What kind of things would make them more comparable? I mentioned delight in the service, and I believe cable can accomplish that and, putting aside for the moment the lack of competition and all the other business reasons for them to not give a damn, should strive for it.

Consumers don’t require much to be happy, it’s really the little, unexpected things, the treatment of details, that make a lasting positive memory. In addition to making a good impression, it might even lead to increased revenue both directly and indirectly through word of mouth, social media and all that.

Consider the following example, where, to thank me for my loyalty, I am sent a message directly on the TV and given a free Pay-per-View/OnDemand movie. Despite my years as a customer, I cannot tell you what channel that’s on, I know I am not alone in that. Once made aware of the service, however, it is plausible that return visits will be made and a new revenue channel established. It is even more likely that I will go to my friends and social networks and announce, or even brag about it. And if not? The cost is negligible, especially when put in the larger context of the life of the customer. This does not have to become a formalized thing like anniversaries at your place of employment, but by making a customer feel a tiny bit special, they could make a big difference.

Another example is the common offer of premium channels free for a limited time, in the hope that the customer keep the expensive bundle. This is a tried and true acquisition tactic, but what about retention? I think a “reverse-tier” pricing plans for premiums, applying a small discount to those who stick around with the service for prolonged periods of time is an interesting experiment. Particularly if this is not an announced part of the plan, receiving a message that your bill is actually going down rather than up, even if by just one buck, is sure to be given a warm welcome. Again, small step that can go a long way with the customer. The cynic in me says that any such attempt will be offset by the routine increase in price, or be built into the pricing structure to compensate for it, but I still think it is a win-win.

Accomplishing this delight in service is more than just offering pricing-based incentives. Just like you have “the usual” in your restaurant, or your bar starts serving you your favorite pint when they see you walk in the door, so can Time Warner be more in tune with you, personally. The current system does not know anything about me, and the result is a bland sameness of experience.

With more households purchasing HD television sets, I am still amazed at the amount of folks watching standard definition channels thinking they are watching HD. Nobody likes relearning channel numbers, and for those who have been accustomed to specific numbers, or worse yet, the number is part of the channel’s name, the instinct is to go to what you know. There were channels where I continued with the SD version simply because I was not aware an HD version was available. Then there are those who just do not have the right cables. How great would it be if Time Warner recognized that you have an HD box (which they know, since it is a separate line item than the standard digital box which you get charged for) and forwarded you to the HD broadcast whatever version of the channel you punched in? Or, using the same logic, informed you that it recognized a non-HD cable connected and that your resulting experience is therefore compromised, offering you to have the right cable sent to you, for a small price? As an aside, I would personally love to have all SD channels replaced completely with their HD variants and the channel lineup made more manageable.

The “usual” could be more than just how I access channels, but also what shows I follow. If I always watch a certain show, how about a little unobtrusive reminder that it is about to start if I’m not currently on that channel? Or switching the TV on to that channel automatically if I am running home to it, so that I do not miss too much?

Lastly, let me select the channels that I care for. No more bundles of 80 channels from which I only ever use 4. The idea of À la Carte programming is far from a new one, and the common response is that pricing will be prohibitive. Until there is transparency in that claim by both content publishers and cable companies, I cannot simply accept that. But even if that is the case, there are ways to make this work for all parties. This might make it into a future post in a more comprehensive fashion, but the short of my suggestion is subscription tiers at various price points. At the bottom is the ability to rent specific shows for a set price, above that access to a more comprehensive database of shows from the channel, both can be monetized with ads and revenues shared with content publishers. Finally, a full live access to the channel. A potential variable pricing based on bundling multiple channels by the same content publisher should also be explored.

There is a lot of potential in improving the user experience around the cable company, your interaction with them as a company, and with their products in particular. As a provider of hours worth of entertainment, I really should love them, but I am indifferent at best. Some require additional technological investment, many will demand a much needed user interface overhaul (no way around it, this 10ft experience is just atrocious across all companies,) but all scream out for renewed dedication to customer service and the injection of more human-ness into the brand in all its forms.

4 thoughts on “If Only Time Warner Cable Was More Like A Restaurant…

  1. Well thought out piece, sincerely. The part you are missing, however, is the production costs and associated business model around making TV happen. In the restaurant analogy, you can buy a steak, and fundamentlaly you are paying some straightforward markup from:
    1- costs of raising a cow, then slaughtering it, then transporting it to a butcher
    2- costs of butchering, then distribution to the restaurant
    3- costs of service, plus restaurant overhead.
    This model works, it’s straightforward, reliable. At every level of the process, costs are known and highly predictable.

    TV shows on the other hand, are radically dissimilar. From concept through production, costs and revenue are both unknown, and typically, high. The amount of money it takes to actually get a show onto your TV set is staggering. Going a la carte would utterly and completely destroy this model as we have it today. Which means, in a nutshell, lots more crappy TV – lots more interesting/indie stuff too, but mostly crap (think about top-40 music as an example).

    Unfortunately, we are dealing with a multi-hundred billion dollar a year industry (my best count is $500B/yr). Its not one easily disrupted nor changed.

    • Thank you for the comment, Jeremy, you’re the first in what I hope will be many!

      Your closing paragraph is spot on, and you more than have a point regarding the restaurant applicability to TV production (as briefly mentioned, costs/business model is something I hope to put a lot more thought into at some point and expand on). I could split hairs with your argument and point out that not all cows are created equal; the different price points for each of the steps you’ve outlined below varies from breeder to breeder, restaurant to restaurant, and every step in between quite significantly; but I think your argument takes that into consideration already. That is also why, in the end, I think the business model doesn’t necessarily invalidate my original post.

      It is what allows people to enjoy the product in all its forms, grades and types of experiences. From a basic diner to a 4-star Michelin-rated restaurant. From a simple preparation to a fancy presentation. You have a target audience in mind, a budget to go along with it, and quality requirements and you plan accordingly. So if I, as a content publisher, pride myself on quality, I will invest adequately in production, but may price my channel higher (HBO subscription would already command a higher price than a FOX would, for a somewhat unfair example, for their current inherently different business models) or offer more premium options for the real aficionados.

      Before we can go fully à la carte on a show level, which is what I think you’re responding to above, I think channel offerings à la carte can be experimented on. The premium channels (HBO/Showtime/Cinemax/Starz) are almost the only examples I can think of (other than adult sites) that allow you to add them on a single content publisher level. If I want sports, I can get a package that has 5-10 different sources. If I want an international channel, I will most likely end with a whole bunch of others I don’t understand. TV is already mostly crap in my opinion, and the channel proliferation hasn’t helped it improve.

      If the argument against à la carte is that it’s going to be more expensive for me as the consumer, let’s assume I pay the same amount I currently do, but to a significantly lower amount of channels–because those are the channels I chose to pay for, as those are the ones I watch–I would expect a higher slice of the money to go directly to them, which in theory should mean an even higher likelihood of quality end product. And if I pay the same, see the same amount of channels I was watching before, but production quality improved, you will not hear me complaining.

      Thank you again for your thoughtful response!

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