The National Content and Technology Cooperative (NCTC), with partner ACA Connects, will stage The Independent Show, their signature conference, in Minneapolis July 30-August 2 amid a changing and challenging marketplace for NCTC’s more than 700 small, independently-owned communications service provider members.  

With major changes to the traditional video business, a continually shrinking subscriber base and increased competition from emerging technologies, NCTC executives said the conference will look to educate and inform member distributors who have their hands full keeping their future business prospects in line with the evolving landscape.

Multichannel News caught up with NCTC CEO Lou Borrelli and executive VP of programming Judy Meyka to talk about the state of the business and the co-op’s role in mitigating the myriad of industry changes both on the programming and technology side on the eve of The Independent Show. A lightly edited version of the interview appears below:

MCN What are the top issues NCTC members are facing going into the Independent Show? 

Lou Borrelli: As you know, the business has been evolving for several years now, from content being the main product driving the business to now being one of a few products. What Judy and her team have been doing is successfully navigating how we prepare for what our members will be thinking about doing going forward. The whole concept of declining linear customers is real, and we have some member companies — mostly the smaller ones — who have opted out of video and gone broadband-first. We’ve been looking at a wide range of solutions that would potentially provide choices to members based upon their size and based upon their strategy to have video as an essential product. Video may not be as essential as it was 15, 20, or 30 years ago, but it's still important. The key is it's evolving into something different where the economics are different and the customer relationship is different. Part of our job as stewards of the co-op is to figure out strategies and execution that our members can accept that give them a chance to keep going in this category.

MCN: Are you finding that most of the members are still supportive of the video business or are they looking to follow other distributors in partnering with a virtual MVPD for video while continuing with the broadband business? 

Judy Meyka: Unfortunately, it is a huge range of feelings, to be honest with you. I've said this before … if you ask 10 of our members, you'll probably get nine or 10 different answers. I think it depends on the history of the member. If they started as a cable company or a telco, or an overbuilder, it might make a difference in where they are now in the evolution. But we really have a lot of members who still believe in video — it might not look exactly the same, and maybe it should look even more different going forward. Some of our members definitely view vMVPDs as competition, but others view it as a way to offer their customers the kind of viewing experience that they want. It really depends on what their strategy is and how they feel about it going forward. There are definitely some of our members who are ready to get out of video; it just depends on who they are and where they are in their evolution and their process. 

MCN: For those members who do wish to stay in video, what are the biggest challenges they face in an evolving marketplace? 

JM: As I’m sure you’ve heard a billion times, the cost of programming continues to be a concern. They’re really focused on wanting to give the consumer what the consumer wants, and I think the consumer does want bundled programming, although I'm not sure what that bundle exactly is. They also want more programming but at a lower cost. That's obviously incredibly challenging in this day and age given the ever-increasing costs from the programmer side. I also think that one of the challenges is wanting to make sure that the consumer has the best user experience. We still have members who have analog systems, and we have a lot of members who have upgraded and want to make sure that they can keep upgrading that experience for customers, and sometimes that’s not easy to do on an individual basis. One of the huge benefits that the co-op offers is to give members the ability to upgrade to a better platform in an aggregated way. Obviously, competition is always an issue because there’s a lot of competition out there. Also, the large programming media groups taking value out of the linear channels by moving it to the direct-to-consumer platform is a huge challenge. How do we still maintain a product that has enough value and is worth what we and the consumer are actually paying for it?

LB: The reality is that media companies have been developing their direct-to-consumer platforms. It’s sort of like building a car while you're driving it down the road, and we are both the gas and the mechanics to keep their businesses running. For those of us that have been in the business on the cable side some 45 years, it’s rough, but I understand it. It’s not like I think they should never do it, but I think that if it were me and if we had the opportunity to talk about it years before they decided to go, we probably would’ve crafted a more elegant transition that would’ve provided a little less risk and a little bit more of the opportunity for us to continue to have an ongoing financial relationship.

MCN: With the continual change in the marketplace, what is NCTC’s role in negotiating deals for its members, and what are members asking you to do?

LB: We look at the industry holistically and look for the best opportunities for our members. That’s why we’re in the connectivity business and that’s why we’re launching MVNO [Mobile Virtual Network Operator-provided cellphone service]; that’s also why we’ve ramped up and retooled our group purchasing. For the bulk of our members, we are the strategic overhead that they can’t afford and the purchasing power that they can’t do on their own. We are the ones that can go out and evaluate technology, products, and services that frankly they don’t have the time to do or, especially for the smaller guys, don't have the expertise to do. We do a really good job of evaluating options and try to present them in a way where the members feel like they have some choices. We’ve been agile and I think we continue to figure out how we can be an essential service to the membership at large, not just a particular subset. 

JM: Even if the member doesn’t actually partake in these new technologies, deals or other things, we are a place that they can come to to get information, or ask questions or just ask if they are thinking about the right stuff. 

The erstwhile "National Cable Television Cooperative" has announced its new name: the "National Content and Technology Cooperative." 

“Our new name and logo are just the beginning of how we are retooling ourselves,” said NCTC CEO Lou Borrelli. “Our design reflects our commitment to delivering savings, solutions and strategies in everything we do. Our name and look may be new, but our significant cost savings programs, services, networks and partners all remain the same and will only improve.”

The anticipated announcement was made ahead of the NCTC's signature conference, The Independent Show, which kicked off in-person activity in Orlando, Florida on Sunday. (Next TV reported back in May that NCTC was mulling a name change.)

Also read: NCTC CEO Lou Borrelli Talks ‘Connectivity Exchange,’ MVNO Deals ... and the New Name

Speaking to Next TV in June, Borrelli said that the NCTC's core activity -- negotiating TV licensing contracts for many of the more than 700 small U.S. telecommunications companies it represents -- is still relevant.

But as its membership consolidates around new priorities of connectivity, moving away from less profitable TV bundling, the NCTC has diversified into various technology roles. 

For example, Borrelli's constituents are increasingly interested in forming MVNO deals and entering into the wireless bundling business. The NCTC has also had recent talks with Comcast about licensing Xfinity Flex video technology. 

In addition to a new name and logo, NCTC is also touting a new tagline: "Stronger together."

“Technology is the future,” Borrelli added. “As the industry continually shifts, our mandate is to develop and help our members implement new revenue generating businesses. This shift is a huge undertaking that we hope will lead to better communications, shared involvement and a single community that moves together for everyone’s benefit.” ■

Grant Spellmeyer knows that he has some pretty big shoes to fill. 

Named CEO of ACA Connects in May, taking the helm from retiring CEO Matt Polka, Spellmeyer has extensive experience lobbying for the telecom industry: He comes from U.S. Cellular, the mobile arm of ACA member TDS Telecom. 

Polka officially ends his 25-year tenure representing smaller, independent cable operators at ACA Connects this month, culminating in The Independent Show July 24-27 in Orlando, Florida. In the meantime, Spellmeyer has been busy making the rounds, meeting with individual ACAC members and companies, as well as National Cable Television Cooperative CEO Lou Borrelli, learning more about the cable business and listening to what his members feel is most important to the industry. 

Spellmeyer took some time out earlier this week to speak with Multichannel News senior content producer – finance Mike Farrell. Here's an edited transcript of that conversation.  

MCN: What drew you to this job?

Grant Spellmeyer: There are a couple of factors. First, personally for me, it was a good time in my life to make a switch. But more importantly, I have always held ACA in the highest regard as the premier communications association for what I’ll call non-national providers. Many of them have their roots on the cable side, some of them from the telephone side, some from the cooperative side, some from municipalities. And it is certainly a changing industry. I’ve had the opportunity to know Matt Polka and to work with him quite a bit during the last 15 or 16 years that I’ve been active in the telecom scene in Washington. I’ve watched what Matt and the team have done, they’ve certainly had a long series of wins along the way. I came from U.S. Cellular, which [is] a non-national wireless carrier, midsized — they operate in 21 states — kind of a scrappy competitor. That’s what ACA is full of, a lot of small and medium-sized communications providers who are a little bit of the underdog in the world of Washington, D.C. It was a nice fit from who I get to represent at ACA Connects and the fact that they’re just really good at what they do. They’ve got a good team and I’m excited to be here.

Also: NCTC CEO Lou Borrelli Talks Connectivity Exchange MVNO Deals and the New Name 

MCN: It seems like a lot of the issues that are important to telecom companies are important to cable companies — broadband wireless and the like. So it seems that this job is right in your wheelhouse. 

GS: I think it is. I don’t come with an extensive cable background, although I’ve been busy learning and there are no concerns that I can’t get up to speed on those issues pretty quickly. At least right now, and for the next few years, this is all about broadband. That’s issue No. 1 and I have certainly spent a lot of the last 15 years working on broadband issues, universal service issues, government funding of the provision of broadband in hard-to-reach areas. Issues like mapping I was all over on the wireless side, so I’m pretty fluent in those things. The broadband guys want to get into the wireless business and the wireless guys want to get into the broadband business, and so I see it as a good opportunity to help the association navigate whatever is going to come in Washington and around the states in the coming years. 

ACA is working well. I’m not here to fix anything that is broken. I’m here to carry forward the legacy of success that Matt Polka has put in place over the past 25 years. I don’t think I’ll be lucky enough to break his longevity streak. But I certainly hope to take what he’s built and continue it and adapt it as the industry changes and the regulation landscape in Washington changes. Matt and I are friends, he’s been very gracious to me in the onboarding process, helping me get up to speed with learning the members and learning the issues. And of course, we have our show coming up next week, so that’ll be a new opportunity to go down and experience that. I’ve been to Kansas City to meet with Lou Borrelli and the team at NCTC. Those were good discussions and we’ve got our joint show, and I’m looking forward to what the future has to hold there.     

MCN: In your travels to meet the membership, what are the biggest issues on their minds?

GS: In terms of issues, there are a couple of things I have heard. Broadband would be the most important. There are concerns about how governors and federal agencies will distribute money both from an offensive and defensive perspective. Some members want to get a hold of money, other members are very concerned about being overbuilt in areas that already have coverage that meets the standards under the law. We’re going to be working with NTIA and the FCC and the governors and the state broadband authorities about that. 

The second thing I would flag is the issue of the broadband data collection maps that are due to the FCC by September 1. There was a lot of concern over the FCC requirement that a professional engineer certify the maps. We, along with some other associations, were pushing the FCC to produce some clarity to that and to relax the requirement that everybody go out and engage a certified professional engineer in the state, because in many states they’re not there and certified engineers don’t have the skill sets that are necessarily required for telecommunications. The FCC issued a bureau-level order clarifying that provision and we were very pleased with that, our members were very pleased with it. 

And thirdly, there is retransmission consent. It comes up everywhere I go. I don’t think that’s the No. 1 issue right out of the chute in the next couple of months at the FCC, but they do have some proceedings underway that are looking at certain issues related to retrans. 

MCN: Are you optimistic that you’ll get some traction on the retrans side after all these years?

GS: I think it's more of a long-term play. I think as the cable industry continues to evolve, there are going to be a lot of reasons for the FCC and potentially for Congress to revisit the rules associated with it.

MCN: Going into the show, what’s your take on the industry? Obviously things have changed a lot. 

GS: Keeping in mind that I am still learning the industry and I certainly haven’t talked in depth with a good number of the majority of members — although I have talked to companies that represent a majority of members — I think they have adapted well. They were fortuitous enough to see some of this coming and shift focus to broadband. I expect that to continue. Traditional video cable subscribership is dropping and is likely to continue for a while, but I think folks have adapted really well to it and we will see where it goes over the course of the next decade. But nobody has come to me and said “Grant, you’ve really got to fix this for us because we’re all going under otherwise.” 

People are optimistic, people are very excited to be coming together for the first time — this is the first time since 2019 that we’ve done The Independent Show in-person — so there is a lot of pent-up demand, and I think a lot of my members enjoy the opportunities to visit Orlando with their families. I think everybody is going to have a good time, and hopefully learn something about the state landscape at the moment. And we’re going to celebrate a little bit. It’s a farewell for Matt, and a lot of folks have spent the past 20, 25 years working with Matt, so it’s going to be special from that perspective.

Hopefully they will come away [from the show] going “that Spellmeyer guy seems like he’ll do a good job and let’s charge forward to the future.”

MCN: Is this your first Independent Show? One thing that has struck me about this show, in particular, is that there still seems to be a fair amount of business going on, and members see this as an opportunity to share ideas with other operators.  

GS: It will be my first one. I don't have the frame of reference that I wish I did. ACA used to do a Summit in Washington that was more Hill-oriented, and I’ve been to that a couple of times, but this will be my first time at the Independent Show. From everything I’ve heard, it’s a nice size, not as big as the Consumer Electronics Show, where you’ve got 100,000 people running around Las Vegas. I’ve been to 5,000-person and 10,000-person  trade shows and those are challenging to get any real business done because you can’t find anybody. This is different because it’s one hotel, it's a good size and if you want to track somebody down within the course of 48 hours it’s pretty easy to do so. And that facilitates lots of dialogue and I think that’s what Lou Borrelli and I are after, in terms of where we want to take this show in the future. There is a value to it that is significant, part of it is meeting with vendors and part of it is talking with other members and I think a lot of both of those will be going on. 

MCN: At the same time you’ve got to keep your eye on the historical issues in the industry, like retrans and there is talk of another net neutrality bill on the horizon. 

GS: We’re going to keep our eye on that and there are lots of potential changes coming to Washington after the elections this fall, one way or the other. There are a lot of members not seeking re-election, so I expect a new landscape there. I’ve spent a lot of time on Hill-related matters, and I’m not going to take my eye off that or the retrans ball. I’ve got a good team and we’re going to do good things with it. 

MCN: NCTC hired a new CEO in May 2021 [Borrelli], and you started this May. Do you see the relationship between ACA changing as leadership has changed? How do you see it evolving?

GS: I have spent time with Lou and he seems to be a very, very skilled industry veteran. I think he was the right choice to run NCTC. He’s got a 40-year background in the cable industry that I don’t and I think he is doing and will continue to do really good things at NCTC. We have talked about things like ways to work together additionally amongst our significantly-shared membership, educational opportunities, regional meetings. 

We’ve kind of agreed to get through the show in Orlando and have a more fulsome discussion about what 2023 looks like. But I am all in favor of finding ways to collaborate and they serve the members a whole lot from an operational purchasing perspective and I think we do a really good job on the educational policy side. It’s a good team. We’re going to have some fun together next week. ■

The thermometer reads into the triple digits at the NCTC’s Lenexa, Kansas, office on a late-afternoon June Tuesday, and Lou Borrelli has his sleeves rolled up.

Now 13 months into his tenure as CEO of the National Cable Television Cooperative, the veteran cable executive has been busy transforming the entity, once almost entirely devoted to program-licensing negotiations for its smaller cable operator constituents, into something more useful for cable’s more consolidated connectivity age.

Choosing an odd metaphor for such a hot day, the part of the NCTC’s iceberg poking out of the water is The Independent Show, which is finally set to conduct its first live, in-person event of the COVID-19 era, convening in Orlando, Florida, July 24.

Exhibition space is sold out, Borrelli said, and he expects to exceed the attendance numbers of the NCTC's last in-person convention back in July 2019, and the metrics of the 2018 event, as well. He calls the Independent Show the “last big cable convention,” and he might be right about that.

One of the big unveilings at The Independent Show this year: The National Cable TV Cooperative will have a new name.

“I’m not going to tell you what it is,” Borrelli said, guessing Next TV's next question. “I haven't even told my people what it is yet.”

The name will convey the NCTC's new priorities and focus — a transitional crossroads already traversed by the now-merged SCTE and CableLabs, among other groups serving the cable industry.

In short, what was once a thriving constituency of small, family-owned companies four decades ago when the NCTC was formed has whittled and consolidated into around “700-plus” operators, many of them having forsaken the long-since-very-profitable business activity of bundling TV channels.

Borrelli, a New England native whose last job in a cable industry players uniform was leading Kingston, Jamaica-based Digicel's cable broadband operations, has worked with the NCTC board of directors to come up with some clever initiatives.

Prime example: “The Connectivity Exchange,” which unifies NCTC member companies into singular network platforms, able to pursue big national RFPs.

“Collectively, we represent 40 million digital connections, a third of the country,” Borrelli explained. That, of course, is bigger than either Comcast or Charter Communications. And the beauty of it is, the NCTC can “fill in the holes” for the RFPs the big cable companies go after, too, seizing "complimentary" opportunities.

“If the USPS is looking to get connectivity for 1,000 post offices, we can bid,” Borrelli explained.

NCTC is just getting started with the Connectivity Exchange, which will be amply showcased at the Independent Show. ■

Dialing in to MVNO Deals

Meanwhile, another big Indy Show topic will be MVNO deals, something the org board and constituency have grown increasingly interested in lately as they observe the mobile growth happening at Comcast, Charter and Altice USA.

Negotiating these wholesale wireless network deals has become less and less complicated, Borrelli said, with many of the technical and business hurdles now out of the way.

Video tech is still a big focus for the group, as well — for example, NCTC has been talking to Comcast about licensing Xfinity Flex for its members.

“They could be in Walmart, they could be in Best Buy, they could be wherever,” Borrelli said “But I think we could be very helpful in distribution of that technology.”

“We’ll be ready to go next month,” he added, noting Orlando’s showcase. ‘We’ve hit all our targets.” ■

Looking to proliferate its Xfinity Flex platform on a national level, Comcast has engaged the NCTC in discussions that could lead to many of the cable cooperative's 700-plus member operators deploying the TVOS. 

"We're not far enough along where I could tell you what our level of adoption would be," NCTC CEO Lou Borrelli told Next TV in a Wednesday afternoon phone discussion. "But I can tell you that [Comcast] is very interested in our footprint."

The National Cable Television Cooperative, which is set to announce a new name for itself when it convenes its annual trade conference in Orlando next month, negotiates and consults its members, primarily smaller-market cable companies, on issues related to program licensing and technology. 

Veteran cable industry executive Borrelli, who took over the reins of the NCTC a year ago, leaving his chief executive position at Caribbean and Central/South America-centric telecom Digicel, has been steering the group, traditionally focused on TV program licensing negotiations, into more of a forward-looking technology leadership posture. 

As for Comcast, it’s on the move with its quest to transition Xfinity Flex beyond the Comcast Cable footprint and into a TVOS competing with Roku, Amazon Fire TV and Google TV/Android TV as the gateway to the connected home. 

Last year, Comcast entered into an arrangement to power Hisense smart TVs with an OS based on Flex and sell them at Walmart under the name XClass TV. 

And in April, the No. 1 MSO enlisted the No. 2 U.S. company, Charter Communications, to form a joint venture to oversee the proliferation of the Flex-based TVOS, with Charter kicking in $900 million to the cause over the next five years. 

The addition of Charter creates a massive national footprint to distribute the TVOS. However, enlisting NCTC would provide a matrix of smaller markets to the cause that might otherwise not be as accessible. ▪️

The Cable Center said Tuesday that it has elected four new members to its board of directors -- National Cable Television Cooperative CEO Lou Borrelli, NCTA -- The Internet & Television Association chief of staff Nilda Gumbs; Curiosity president and CEO Clint Stinchcomb and Comcast Central Division president Christine Whitaker. Each of the new board members will serve a two-year term. 

“The opportunity to collaborate with such distinguished leaders on our Cable Center Board is an honor and a privilege," The Cable Center board chair and CEO of Penthera Partners Michael Willner said in a press release. "Their inspiring leadership, business acumen, and unmatched industry expertise will support The Cable Center as we advance innovation and intrapreneurship to help grow our thriving and expanding connectivity industry.”

Borrelli was named CEO of the NCTC in May, and has spent more than four decades as a media executive, entrepreneur, investor and advisor. As CEO of the NCTC, Borrelli represents more than 700 broadband and cable operators operating in all 50 states and the U.S. territories, serving 40 million video and broadband connections.

A seasoned government affairs and communications professional with more than 25 years experience, Gumbs joined the NCTA in 1994, and before being named chief of staff, most recently served as VP of external affairs where she was an integral part of the state government relations team responsible for working with state and local legislators and various intergovernmental groups on policy issues.

Another 25-year-plus industry veteran, Stinchcomb joined Curiosity in 2017 as chief distribution officer, becoming CEO in 2018. A long-time Discovery Inc. executive, where he worked closely with Discovery and Curiosity founder John Hendricks, Stinchcomb oversees Curiosity’s flagship CuriosityStream streaming service, its linear Curiosity Channel, Curiosity Studios original programming, and One Day University. 

As  president of Comcast’s Central Division, Whitaker manages about 27,000 Comcast employees with more than 12.7 million customer relationships throughout 15 states. She most recently served as senior VP of finance and administration for Comcast's Northeast Division, where she was responsible for overseeing all customer experience and financial aspects of the business for the division, which served about 10.1 million customers.

“The Cable Center Board of Directors and I are honored to welcome our four newest Board Members,” said The Cable Center president and CEO Jana Henthorn in a press release. "Our board members’ incredible collective industry wisdom, experience, insight, and knowledge are instrumental to The Cable Center’s success. We look forward to continuing our work to create an inspiring and innovative future through The Cable Center’s mission and programs.” Henthorn, who is retiring at the end of 2021 after 17 years leading the nonprofit, will remain on the board of directors as the immediate past president. ■

San Francisco -- Even more than "convergence," the terms "clustering," "bundling" and "stickiness" were the buzzwords at the CTAM Summit here last week, as marketers gathered to discuss the challenges facing them in stepping up introductions of digital cable, telephone and high-speed Internet products.

The annual Cable and Telecommunications Association for Marketing conference drew a better-than-projected crowd of more than 2,600. General-session speakers such as AT&T Broadband & Internet Services CEO Leo J. Hindery Jr., CNET CEO Halsey Minor and Benchmark Capital general partner Bruce Dunlevie drew standing-room-only crowds in the large ballroom at the San Francisco Marriott.

Not all of the attendees were cable marketers: Because of its proximity to Silicon Valley, the summit drew attendees who were interested in the anticipated convergence between television and the Internet.

The show also drew a healthy number of international cable executives who were interested in hearing U.S. success stories. And there were more than a few well-known former cable and satellite executives between jobs who were as quick to exchange resumes as others traded business cards.

But their out-of-work status carried no stigma at the CTAM Summit, considering the fact that one of the more popular masters of ceremony there, CTAM Summit co-chair Lou Borrelli, is himself without a full-time gig.

Cable marketers were urged to get their operational houses in order before they move too quickly to new product launches.

"It's hard to do many things at once well," Dunlevie cautioned, saying MSOs would be wiser to improve customer service or programming than to branch out into local telephony.

"One of the key challenges I see is the healthy tension between deployment of new services and hanging on to our [current] customers," said David Watson, newly appointed executive vice president of sales and marketing and customer service for Comcast Corp.'s Comcast Cable Communications Inc.

Some of the things MSOs need to focus on operationally are answering the phones in a timely manner, solving customer problems and sending technicians out when they say they will, Watson said. "We have to do all of this right before we can go forward with the new services," he added.

At a Tuesday-afternoon panel, Watson recounted a complaint by a customer who had called Comcast with a problem only to have the operator hang up on him after saying, "I have nothing I can do for you."

Of course Comcast, like other MSOs, has started to deploy new services in some of its markets.

MSOs are doing so not just to put their collective marketing prowess to the test, but also as a defensive strategy against other communications industries and, probably more important, to make good on promises made to Wall Street.

Speaking of the importance of adding new services to help protect the core business, Hindery said, "Retention is always a challenge, especially in a fiercely competitive market. Our goal is to market bundled product and service packages that are so attractive and value-oriented that they become what I call 'sticky.'"

In a test in Fremont, Calif., AT&T Broadband is offering a 25 percent discount on long-distance and local telephone service for cable customers, although the bills are not yet bundled.

AT&T Broadband has 1.4 million digital-cable customers, with expectations of hitting 1.8 million by the end of the year, not including those expected to come over to it from MediaOne Group Inc. next year.

The MSO also aims to gain 25 percent penetration of homes passed for its AT&T@Home high-speed online service within the next five years, Hindery said.

Minor cautioned that the battle over open access to cable pipes could work against cable, advising cable marketers to remind potential data subscribers that other Internet brands are available through their broadband pipe.

"Open access is actually good because companies will pay cable operators for a place on their pipe, and it will make it good for consumers," he added.

Time Warner Cable, which just launched its first digital-cable markets earlier this summer, has already signed up nearly 40,000 customers in its first four markets, chairman and CEO Joe Collins said. The MSO is targeting a deployment of 400,000 digital set-top boxes by the end of the year, and it is in launch mode in 22 markets.

This fall, Time Warner will launch its Road Runner high-speed online service in Manhattan to heavy pent-up demand, Collins said. At the same time, the MSO will launch digital cable to New York City's outer boroughs, such as Brooklyn and Queens. Next year, Manhattan and the outer boroughs will have both services.

"The New York market is 1.2 million subscribers," Collins said. "We'd simply get overwhelmed if we offered our products to everyone all at once."

While continued clustering will help MSOs to advertise more efficiently across a given market, Collins expects that at least initially, Time Warner will only market as heavily as needed to fill the customer pipeline. "Otherwise, we have too many people in the backlog," he said, "and they get mad if they have to wait too long."

An early believer in the power of bundles, Cox Communications Inc. already has several-thousand customers who buy all three of its services -- voice, video and data -- although they're not yet bundled under a single bill.

"Ultimately, we want to give customers a choice of a single or multiple bills," Cox executive director of marketing David Pugliese said. "Some customers don't want to pay $150 at once for cash-flow reasons."

Pugliese added that Cox plans to offer bundles to drive revenues, to reduce acquisition costs by sending a single marketing piece instead of three, to discourage competitors from coming into its markets and "to make it difficult -- even painful -- for customers to downgrade" when they're pitched by direct-broadcast satellite, for example.

He stressed that brand extension would be crucial in the transition from a video-only provider to a supplier of multiple communications services.

"What good does it do you to offer new products and services if your customers only know you and trust you as a cable company?" Pugliese asked.

Even as MSOs protect their core video business and continue to roll out new services, they must keep at least one eye out for new consumer applications that are likely to gain force in the next five years, such as electronic commerce, video-on-demand and new services yet to be invented.

But not every new idea will win cable customers over.

"The saying, 'If we build it, they will come' just doesn't apply anymore," Oxygen Media CEO Geraldine Laybourne warned. "If you don't build it with the consumer in mind, they won't stay."

Collins gained some perspective on consumers' interactive buying habits through Time Warner's two-way Full Service Network trial in Orlando, Fla., in 1992.

Initially, it's hard to get customers to buy certain products, like clothing or curtains, online, Collins said, but consumers do like to buy stamps online.

"People don't like to go to the post office," he added. "It's kind of scary there."

Jim Forkan and Hank Kim contributed to this story.