If you want to know what's going on in the cable industry, you must listen to earnings conference calls. First quarter, fourth quarter, year end ... doesn't matter. Those calls are all the information a cable operator will usually give out until it comes time to lift the cone of silence to acknowledge the latest "innovation" sure to drive customers over the edge into hysterical joy, according to the boilerplate for the typical cable news release.
During an earnings conference call, listeners--and those lucky enough to have their names put into the queue--have the opportunity to listen to and even participate in the sometimes obsequious, often insightful banter between representatives of the cable industry and representatives of financial businesses.
To be honest, an earnings conference call can for the most part be about as exciting as a soccer match and as painful as a particularly nasty tooth cleaning. That's why what Rodger Johnson, chairman-CEO of Knology did last week was so invigorating. He actually admitted--at least two times--that his company had made a mistake when it overpriced its services.
"We shut down a promotion across all of our markets in the August-September time frame and raised our prices. It took us several months to realize we had overshot the market. Not only had we increased our bundle price, we had also removed some of the components from the bundle, making it more expensive for our customers," he said during his prepared remarks.
Knology, he said, "rectified our offers" and is likely regaining the subscribers who abandoned the service because of high prices.
This sort of mea culpa during a formal presentation is rare but not out of reach as a potential public relations move or a way to defuse bad news--in this case, Knology suffered a subscriber loss and Johnson was explaining why.
What really endeared Johnson was his reiteration later during questioning that yes, the listeners had heard right, the MSO had made a pricing mistake and it had rectified things.
"We intended to raise the prices about 10 bucks, which we thought was a sustainable price point," he admitted. "In fact, we took some of the content out of the package and because of doing that if people signed up with us they had to buy that content above and beyond the bundled price."
That created an overall price that was $20 to $25 higher than the previous bundle and that was "too big a pill for the market to swallow," he said.
And why admit all this? Why open up to the masses of analysts and media who live daily on scraps that the MSOs generally try to toss in the trash?
"We've always attempted to share good news with you when we've done something right and likewise we've attempted to let you know when we were off target," Johnson said. "In this instance, I think we whiffed on our pricing program."
That wasn't just unique, it was refreshing.--Jim