In hammering against the AT&T-Time Warner deal last week, some individual groups appeared to be treating the CEO of Time Warner as “He-Who-Must-Not-Be-Named.” OK, we know, Lord Voldemort is a TW employee, sort of, but that is strictly in his capacity as the archest of arch villains in the Harry Potter tales.

For example, Sen. Bernie Sanders (I-Vt.), in his letter to the Department of Justice slamming the deal, proposal referred only to “the CEO of Time Warner” decrying all those millions in stock options that could be coming his way.

Having dutifully added the name of Time Warner CEO “Jeff Bewkes” to those nameless reports on the pushback, The Wire was momentarily panicked when the Senate Judiciary Committee sent out this notice last week about the oversight hearing on the deal: “Both Randall Stephenson, the CEO of AT&T, and Robert Marcus, the CEO of Time Warner, will testify.”

Could we have been wrong, or perhaps this was a case of “He-Who-Must-Not-Be-Named-Correctly.”

As readers of these pages know, Marcus is the now-former CEO of Time Warner Cable who also exited with millions in the bank after the Charter Communications merger.

Within 15 minutes, which is nanoseconds in D.C. time, the committee had sent as a follow-up an amended announcement with Bewkes where Marcus had been, plus an apology for any confusion.

Accepted.

RELATED:Charter’s New Road Map [subscription required] | Charter Sets Its New Technology Team [subscription required] | Goodbye, Time Warner Cable

BOSTON — Before handing Time Warner Cable over to new owner Charter, chairman and CEO Rob Marcus gave the second largest cable operator in the nation company the equivalent of a tune-up, some body work and a new coat of paint.

It’s arguably the best the company has looked in years.

Charter officially closed on its $78.7 billion Time Warner Cable purchase on May 18, the same day it completed its $10.4 billion purchase of Bright House Networks. After the ink dries, Charter will have about 17.3 million video customers, 19.4 million high-speed data customers and 9.4 million phone customers in a footprint that includes the two largest markets in the country, New York and Los Angeles.

Marcus said the key to TWC’s success is shockingly simple: Make sure what you deliver works.

BACK TO BASICS

“We doubled our efforts on the nuts and bolts, making sure customers were experiencing what they were paying to experience; that the stuff worked the way it was supposed to work and when it didn’t, ensuring that we really took care of customers better than they ever have had before,” Marcus said.

Time Warner Cable ended 2015 with positive growth in video subscribers (32,000) for the first time since 2006. The momentum continued in the first quarter of this year with a gain of 21,000 video customers and revenue growth of 7.2% (its best Q1 showing in eight years), while cash flow increased 8.2% (its best Q1 in six years).

“In TWC’s most recent chapter, CEO Rob Marcus and chief operating officer Dinni Jain have steered the ship through a two-year merger pendency that might have understandably crushed morale and results,” MoffettNathanson principal and senior analyst Craig Moffett said in a recent research note. “It didn’t. It is an extraordinary achievement that the company’s employees have not only maintained the asset, but have spurred TWC to its best operating performance in years.”

Marcus also gave a lot of credit for the turnaround to Jain, who joined TWC on Jan. 13, 2014, the same day Charter lobbed in an offer to buy the company for $130 per share.

“Would the execution have been as successful if he [Jain] were not here? I suspect not,” Marcus said. “Beyond that, both he and I gave opportunities to some really talented other executives in the company who had been with us, but just hadn’t been given much latitude to really do all they could do to contribute to our success.”

Through it all, Marcus and his team kept their focus through Charter’s first offer — and a brutal conference call where management sharply criticized TWC’s leadership, a move that Marcus later used as a “rallying cry” for employees to do better — followed by a 2014 bid by Comcast that was shelved less than a year later and a much-richer Charter deal. At the close, the Charter offer valued TWC at about $200 per share, $70 per share better than the January 2014 bid.

TURNING THE PAGE

In an interview the day before the Charter deal closed, Marcus was reflective and a little sad to leave behind what he considered his dream job. As a young lawyer fresh out of Columbia Law School and working for Time Warner Inc.’s outside counsel, Paul, Weiss, Rifkind, Wharton & Garrison, Marcus said one of his first assignments was to take American Television and Communications (ATC), the predecessor company of Time Warner Cable, private so the assets could be included in Time Warner Entertainment, a complex vehicle created in the early 1990s to help alleviate some of Time Warner Inc.’s massive debt load.

“I’ve been in and around this company for 25-plus years,” Marcus said. “And on Thursday [May 19], it will be the first time in my working life that I haven’t had an affiliation with this company.”

Marcus leaves an industry at a crossroads, with new threats from over-the-top players and so-called skinny bundles. The now-former TWC chairman and CEO said the reports of the death of cable are premature.

“My expectation is that we’ve still got runway,” Marcus said. “There is a lot of juice left for things we haven’t tried yet.”

Marcus doesn’t believe OTT players will disappear — he expects more to come on the scene — but he sees the relationship between OTT companies and pay TV evolving. “I think there will be more mixing and matching,” he said. “I’ve been a longstanding believer that over-the-top video is the killer app for the sale of high-speed data, so the guy who has the best Internet pipe is going to benefit.”

Marcus also said the industry may be getting too complicated with the skinny bundle concept and that the most popular offering could be the simplest: a full programming bundle, minus sports networks like ESPN.

“For some customers, if you could reduce their bills by $20, which I think you could be reducing [exclusive] sports, that might be an interesting alternative,” Marcus said.

While Verizon Communications’s attempt to do something similar — its Custom TV package initially didn’t include ESPN — didn’t work out, Marcus said subscribers still could get plenty of sports through broadcast and cable networks like TBS and TNT. “I think someone will try it soon,” he said.

Marcus also was excited about the evolution of apps like TWCTV, which he sees as the main delivery vehicle for video in the future.

THE FUTURE IS AN APP

“We’ve already moved to a world where the video app replicates our video experience,” he said. “The key is when that becomes the only experience. The only thing that is holding us back on that front is compliance with the FCC.”

Marcus said the Title VI regulatory requirements for closed captioning, emergency alerts, and coding for local PEG channels have held back apps becoming the main vehicle for video delivery. But he said in its New York City IPTV trial, TWC has done just that.

Outside the home, programming rights are the main obstacle. But that could change as more operators push for national rights. “I’ve never thought it was very compelling for any of us to launch service over-the-top, but to have customers in our territory have the ability to access what they are already paying for at home when they’re on the road is a very compelling value add,” Marcus said. “Those are two very different things.”

Marcus said he hasn’t decided his next move — over the short term, he may get some sun and spend time driving his kids to school. Being chairman and CEO of Time Warner Cable is a hard act to follow, he said.

“What you don’t want to do is make the next thing a second seat to what you’ve already done,” Marcus said. “You want it to be something you’re excited about. Finding out what that is going to be, the bar is pretty high. Even being under siege for two to three years, it was pretty fun. It was exciting in every way. I was challenged: It drew on everything I had.”

The National Cable & Telecommunications Association has announced the 2016 cable-industry leaders who will be honored with Vanguard Awards, at a ceremony during the INTX convention in Boston on Wednesday, May 18. Heading the list, being honored for their distinguished leadership, are top executives at three cable providers that are in the process of being acquired: Cablevision (by Altice) and Time Warner Cable and Bright House Networks (by Charter Communications).  

The following is from the detailed announcement of the Vanguard recipients by the NCTA, an announcement that was distributed on March 23:

WASHINGTON, D.C. – Ten cable industry executives spanning all aspects of the cable and telecommunications industry will be recognized for their significant contributions to industry success, with NCTA Vanguard Awards at the Internet & Television Expo (INTX) in Boston in May.

Heading the list and receiving the Vanguard Award for Distinguished Leadership will be Kristin Dolan, Chief Operating Officer, Cablevision Systems Corporation; Robert Marcus, Chairman & Chief Executive Officer, Time Warner Cable; and Steve Miron, Chief Executive Officer, Bright House Networks.

The Vanguard Awards are presented annually by the National Cable & Telecommunications Association (NCTA) to individuals who excel in both business and personal commitment to their colleagues, and whose accomplishments merit the recognition of the entire industry.

The 2016 Vanguard Awards will be presented on Wednesday, May 18, 2016, at an awards ceremony and lunch during INTX: The Internet & Television Expo scheduled for May 16-18 at the Boston Convention and Exhibition Center.

A complete list of 2016 Vanguard Award honorees, along with a description of each award, follows.

DISTINGUISHED VANGUARD AWARD FOR LEADERSHIP

For 2016, the Vanguard selection committee identified two men and one woman to receive the Distinguished Vanguard Award which is the highest award NCTA presents for industry leadership.  The recipients are:

Robert Marcus, Chairman and Chief Executive Officer, Time Warner Cable

Since becoming Chairman and CEO in 2014, Rob Marcus has been committed to creating a customer-centric company focused on operational excellence and superior service. During Marcus’ 10-year tenure with the company, Time Warner Cable has invested heavily to support growth, enhance its network, and improve critical infrastructure – all while expanding residential and commercial product offerings, increasing data speeds, and rolling out advanced multi-platform products. Marcus joined Time Warner Cable in 2005 as Senior Executive Vice President, overseeing corporate groups including mergers & acquisitions, law, business affairs, programming, corporate affairs, and human resources. He then became Chief Financial Officer, followed by President and Chief Operating Officer, before assuming the CEO role. From 1998 until joining Time Warner Cable in 2005, Marcus served at Time Warner, Inc., in roles including senior vice president of mergers & acquisitions.

Marcus has an extensive commitment to corporate, non-profit, and industry boards. They include the boards of Equifax, Inc., The Museum of the Moving Image, New Alternatives for Children, CableLabs, and NCTA. He has been recognized for his leadership with numerous business and industry honors and is a recipient of the Steven J. Ross Humanitarian Award from UJA Federation of New York.

Steve Miron, Chief Executive Officer, Bright House Networks

During his time as CEO, Steve Miron has led Bright House Networks – sixth largest owner and operator of cable systems in the U.S., serving 2.5 million customers – to new heights, in customer experience, operations, service deployment, and growth. From his entry into the business, with MetroVision in 1989, Miron held successively senior management positions, with Vision Cable, NewChannels, and Time Warner Cable, where he served as vice president and general manager of its cluster in central and northern New York State. In 2002, he joined Bright House Networks as President, rising to CEO in 2010.  Under Miron’s leadership, Bright House has achieved an industry-leading customer-centric reputation, recognized by 12 J.D. Power Awards, while earning accolades across a variety of activities such as its commitment to corporate social responsibility, employee relations, and consumer-focused marketing.

With this award, Miron becomes a two-time Vanguard winner, also having been recognized in 2005 with the NCTA Vanguard Award for Young Leadership. An influential leader in the television industry, he serves on the Board of Directors of Discovery Communications, C-SPAN, CableLabs, the CTAM Educational Foundation, and NCTA. He also serves as vice chair of the NCTA CablePAC Committee.

Kristin Dolan, Chief Operating Officer, Cablevision Systems Corp.

Kristin Dolan leads all aspects of cable operations for Cablevision Systems, a leading media and telecommunications company serving millions of households and businesses throughout the greater New York area. As Chief Operating Officer, she oversees thousands of employees, including the company’s entire customer and field service workforce. She is also responsible for the full Optimum customer experience, from product development and management to programming, marketing, and sales across the company’s residential and commercial Optimum TV, online, WiFi and voice products. In addition, Ms. Dolan oversees the human resources organization as well as Cablevision Media Sales, the company’s advertising sales division.

Throughout her career, Ms. Dolan has been instrumental in working across Cablevision’s media and telecommunications properties to maximize opportunity, brand strength, and customer experience. Over the past several years, she has guided Cablevision on its transformation to a premier connectivity company in the nation’s most competitive market by reimagining its products, quality of service and the customer experience. In the advertising space, Cablevision was the first cable operator to roll out census-level audience data, and continues to innovate its pioneering data strategy, paving the way for an audience-driven approach to television advertising and providing deep insights into New York-area viewing audiences.

A veteran of more than 27 years with the company, Ms. Dolan has had a direct hand in the launch, expansion and growth of many of the company’s products and services, including Optimum TV digital cable and Optimum Voice. She began her career at Rainbow Media – now AMC Networks – where she worked in a variety of sales and marketing positions with increasing levels of responsibility. She also has spearheaded a number of initiatives for Madison Square Garden, including the migration of the national music network Fuse from Rainbow Media to Madison Square Garden, where she was responsible for marketing, creative services and other key functions during and after the transition.

Ms. Dolan serves on the Boards of Cablevision, AMC Networks, and The Madison Square Garden Company. She has been a member of the Foundation Board for SUNY Albany, as well as the National Board of Women in Cable Telecommunications (WICT). Honors have included recognition as a Multichannel News Wonder Woman, and inclusion on the Cablefax list of 100 top cable executives and 50 most influential women in cable.

VANGUARD AWARD FOR CABLE OPERATIONS MANAGEMENT

This award recognizes the efforts of cable's system managers, who work under intensely competitive conditions in today's dynamic telecommunications environment and who are critical to the cable industry's success. This year’s honoree is:

John Keib, Executive Vice President & Chief Operating Officer, Residential Services, Time Warner Cable

John Keib leads service delivery, customer care, marketing, and sales operations for Time Warner Cable’s $19 billion residential services business. He has been instrumental in the launch and growth of products and services including high-speed Internet, multichannel video, digital phone, business services, and local programming. A veteran of Time Warner Cable since 1998, Keib joined the company in Central New York, working on the launch of Road Runner®high-speed Internet service. He went on to serve as Regional Vice President of Marketing and Sales for the Northeast, Southern California, and New York City; President of Residential Services for the Northeast/National  and West Regions; then returned to New York City as Executive Vice President, Chief Care and Technical Operations Officer in 2013. Prior to his career at Time Warner Cable, Keib worked for Thomson Multimedia and DirecTV.

VANGUARD AWARD FOR PROGRAMMERS

Cable’s creative programming services make the industry a leader in the home entertainment and news and information businesses. This award recognizes innovation, leadership and individual achievement of NCTA’s programmer members. This year’s honoree is:

Joel Stillerman, President of Original Programming & Development, AMC and Sundance TV

For the past eight years, Joel Stillerman has been a key architect behind AMC’s evolution from a classic movie channel to a top tier “must have” network, home to some of the most acclaimed and highly-viewed programming on television. He and his colleagues at AMC have brought viewers and fans some of the most celebrated shows in the history of cable, including Mad Men, Breaking Bad, The Walking Dead, Better Call Saul, Hell on Wheels, Fear The Walking Dead, the Talking Dead franchise, Into the Badlands and the forthcoming The Night Manager and Preacher, among others. Adding SundanceTV to his portfolio in 2015, Stillerman and his team now develop and support an impressive slate of scripted dramas for the fast-growing network including the Peabody Award-winning Rectify, Hap and Leonard and an expanding array of international programming like The Last Panthers, Cleverman, Rebellion, Gomorrah and The A-Word. As founder and co-chairman of Spanky Pictures, he produced the films Blow and Rounders and later served as the top content executive at Walden Media. Stillerman joined AMC in 2008 after more than 20 years of broad experience developing, producing, and writing for film and television, with his work appearing on networks such as HBO, MTV, and VH1. He’s the winner of a Primetime Emmy Award for Best Made-for-TV Movie (Lessons Before Dying in 1999), a Peabody Award, a Humanitas Prize, and several CableACE Awards.

VANGUARD AWARD FOR SCIENCE & TECHNOLOGY

This award honors individuals who have played a significant role in product improvement as well as in the design and development of engineering techniques. This year’s honoree is:

JR Walden, Senior Vice President, Technology, and Chief Technology Officer, Mediacom Communications Corporation

Recognized by his Mediacom colleagues as the founder of their Internet business, JR Walden boasts 20 years of experience in the cable industry. Climbing the ranks through the years in positions as Director, Senior Director, Vice President, and Group Vice President of IP Services, Walden, as CTO today, leads all the technology and engineering functions for Mediacom, which serves 1.3 million residential and business customers in 1,500 mostly rural and small-market communities. Walden plays a key role in shaping Mediacom’s strategic vision and direction. He manages video and network engineering, operational support systems, network operations, video operations, and CLEC research and development, leading a team of more than 200 engineers, software developers and network operators. A broadband pioneer, Walden directed Mediacom’s first-ever high-speed data business in its California systems in 1997. And at the age of just 27 in 1998, he led the company’s efforts to introduce full DOCSIS broadband service throughout the company’s footprint. Walden continues to break new ground today, positioning Mediacom as a national leader in the rollout of 1-gigabit systems. Before joining Mediacom, Walden held positions with the Department of Defense, Comarco, and Science Applications International Corporation.

VANGUARD AWARD FOR GOVERNMENT & COMMUNITY RELATIONS

This award recognizes individuals who have had a significant impact on promoting a positive public image and advocating public policy positions for the cable industry at the national, state and/or local levels. This year’s honoree is:

Kathy Zachem, Senior Vice President, Regulatory & State Legislative Affairs, Comcast Corporation

A recognizable face and strong advocate throughout the corridors of power in the nation’s capital, Kathryn “Kathy” Zachem is a key leader of Comcast’s federal relations efforts, directing more than 200 employees nationwide. Joining Comcast in 2008, Zachem is responsible for the company’s advocacy before federal agencies, including the Federal Communications Commission, and state regulatory and legislative bodies. Zachem’s cable experience spans nearly three decades. A founding partner of the law firm Wilkinson Barker Knauer LLP, during her 23-year tenure at the firm, she specialized in communications law and represented clients from nearly every segment of the communications sector. As much an advocate for cable as she is for her own company, Zachem has been recognized by CableFAX as among the Most Powerful Women in Cable and is a Multichannel News Wonder Woman. She has also been identified by Washingtonian as one of Washington’s best lawyers, and Chambers USA listed her as one of the leading lawyers in the communications field. She is active in the Federal Communications Bar Association, serving several terms on its Executive Committee and Foundation Board, and is a recipient of its Distinguished Service Award.

VANGUARD AWARD FOR MARKETING

This award honors an individual who has been instrumental in the development of marketing approaches that significantly enhance cable's public image and increase customers. This year’s honoree is:

Tonia O’Connor, Chief Commercial Officer & President of Content Distribution, Univision Communications, Inc.

Tonia O’Connor oversees content distribution for Univision Communications, Inc., (UCI) across all screens, including online and mobile. She also leads UCI’s Enterprise Development efforts to expand its content availability and licensing revenue by securing key partnerships and new business models with traditional and emerging content distributors. She led the strategy and launch of UCI’s direct to consumer subscription video service, Univision Now; the creation of the company’s first English language digital network, Flama; the Univision Creator network; and has worked with key leaders across the company to coordinate joint ventures and investments in new businesses. A highly-regarded champion of diversity in media, O’Connor often speaks about the industry’s obligation to support multicultural talent in mainstream media. She also helped launch and sponsors the UCI Women’s Leadership Council, an employee resource group designed to advance women across the company and prepare the next generation of women leaders. She also serves on the Dean’s Advisory Board of the S.I. Newhouse School of Public Communications and on the executive committee of the T. Howard Foundation Board. O’Connor joined UCI in 2008 as Executive Vice President of Distribution Sales and Marketing, after working for 13 years in leadership positions at Gemstar TV Guide. She has been recognized as a Multichannel News Wonder Woman and appears regularly on the CableFAX list of Most Powerful Women in Cable. Named by Cynopsis in 2013 as one of the industry’s “most intriguing people,” O’Connor also serves on the board of El Rey Network, a cable network founded by filmmaker Robert Rodriguez.

VANGUARD AWARD FOR ASSOCIATES & AFFILIATES

This award recognizes the important contributions of equipment manufacturers and service suppliers to cable industry innovation, growth and progress. This year’s honoree is:

Bob Benya, President & Chief Executive Officer, iN DEMAND

A cable industry executive and innovator for more than 30 years, Bob Benya in 2010 became President and CEO of iN DEMAND, a partnership of four of the leading telecommunications companies in the U.S. – Comcast, Time Warner Cable, Cox Communications, and Bright House Networks – dedicated to driving scale, efficiency and speed-to-market advances in transactional entertainment. Benya’s influence within iN DEMAND and the cable industry has been key in the development of technological and product advances that have enhanced and improved the customer experience for tens of millions of cable customers, including digital TV, video on demand, pay-per-view services, interactive TV, high-speed Internet service, and cross-platform transactional services. With deep roots in the operating side of the business, Benya’s career includes marketing leadership for five multiple system operators. Notably, as Senior Vice President of Marketing for Time Warner Cable from 1993 to 2003, Benya helped lead three groundbreaking initiatives – the Full Service Network, Road Runner High Speed Internet Service, and the AOL/TW Interactive Video Group. In his tenure with iN DEMAND, the company has grown to distributing more than 360,000 hours of content annually, and spread its footprint to serving more than 60 million subscribers with content from more than 225 suppliers – achieving its best year ever for pay-per-view results in 2015. A cable marketing stalwart, Benya serves on the Board of the Cable & Telecommunications Association for Marketing (CTAM) and the CTAM Educational Foundation, and also has served on the Boards of Music Choice and the Better Business Bureau Online.  He has won many industry awards, including an Emmy for his work on the industry’s groundbreaking “Start Over.”

VANGUARD AWARD FOR YOUNG LEADERSHIP

The growth of cable is in large part due to the energy, vitality and creativity of the many young people working within the industry, and the Young Leadership Award recognizes those individuals who have already made a mark on the industry and its constituents. This year’s honoree is:

Justin Connolly, Executive Vice President, Affiliate Sales & Marketing, Disney and ESPN Media Networks

Spanning both cable and broadcast-related functions of his company, Connolly oversees all aspects of domestic distribution, affiliate marketing, and affiliate-related business operations for 17 Disney and ESPN networks, as well as related WATCH authenticated products, HDTV, video on demand and interactive television, plus retransmission consent agreements for The Walt Disney Company’s eight owned-and-operated ABC stations. Prior to his promotion one year ago, to Executive Vice President for Affiliate Sales & Marketing, Connolly had major success as Senior Vice President of College Networks for ESPN, where he oversaw the creation and launch of the SEC Network, one of the most successful launches of a new network in cable history, debuting in more than 60 million households from the day of its launch. Prior to his work with the college networks, Connolly served as Senior Vice President, National Accounts, for Disney & ESPN Media Networks, responsible for all domestic distribution and licensing efforts for The Walt Disney Company’s linear networks, broadband, and video on demand content within the Media Networks Group. Following time in the corporate finance group for The Walt Disney Company’s corporate treasury department, Connolly joined ESPN in 2003, where he helped lead strategy, operations, and distribution efforts. He is an inductee in the Sports Business Journal 40 Under 40 Hall of Fame.  

Attending the Awards Ceremony

Admission to the Vanguard Awards Lunch and Ceremony at INTX is by ticket only. Tickets may be purchased at $125 per ticket or $1,250 per table of 10 seats. Please visit www.intxshow.com/vanguardtickets for purchasing instructions. If you have questions or require assistance, please contact Katie Mousavian at 202-257-4429 or kmousavian@ncta.com.

Media Attendance

The Vanguard Awards event is open to the media at no cost, but reservations are mandatory. Media may make reservations by contacting Pam Ford at pford@ncta.com no later than May 1, 2016.

Time Warner Cable chairman and CEO Rob Marcus again pledged positive basic video subscriber growth for the full year, adding that the company’s merger with Charter Communications is moving forward.

TWC added about 30,000 basic video customers in the third quarter, lost 45,000 in the second and another 7,000 in the third quarter. To post a positive gain for the full year, that means the cable giant would have to add about 22,001 video customers in the third quarter to show a gain, not inconceivable, even in this hyper-competitive video distribution environment.

Marcus didn’t give any specifics at the UBS Global Media & Communications confernce in New York, but added that despite new threats from over-the-top services, skinny bundles and the like, TWC is having its best year in terms of video subscriber metrics in years.

Marcus pointed to TWC’s three-year turnaround plan, initiated months before it first agreed to be acquired by Comcast (a deal that was later withdrawn) and its May agreement with Charter, as the main catalyst for its improved performance.

“We’re very confident that we will deliver video sub growth for the full year,” Marcus said.

TWC probably won’t be the only major operators to post video customer gains – Charter has said it also is on track for  positive video subscriber growth in 2015.

Marcus wouldn’t make any predictions as to when the Charter deal will close. He noted it is currently in day 89 of the 180-day Federal Communications Commission approval process, has secured most of the franchise renewals across its footprint and is working with state agencies in New York, New Jersey, Hawaii and California to secure approvals there as well. At its current rate, the FCC “shot-clock” would expire in March, he said. And though the California Public Utilities Commission threw a scare into some investors by publicly stating it would make a decision on the franchise in June, Marcus said the company is “working with them to move that process along more quickly.”

Time Warner Cable chairman and CEO Rob Marcus said the cable giant could end the year in the black regarding basic video subscribers, a major turnaround from the heavy losses of just a few years ago.

Marcus, speaking at the Bank of America Merrill Lynch Media, Communications & Entertainment conference in Beverly Hills, Calif., said given the momentum of the past two quarters, a positive basic video showing is not out of the question.

TWC added about 30,000 basic video customers in the first quarter and lost 45,000 in the second quarter. Marcus said that momentum is strong in the third quarter, although he couldn’t predict whether the company would report gains or not. The fourth quarter, which is typically stronger, could be the difference, adding that the company has a “good shot” at posting at least a slight gain.

That would be a big turnaround from just two years ago, when Time Warner Cable lost a staggering 833,000 basic video subscribers in 2013. Those losses improved to 408,000 in 2014, as the company began implementing its TWC Maxx initiative, began converting markets to all-digital and substantially improved customer service.

Basic video gains would be a nice parting gift for Marcus and TWC, which agreed to be purchased by Charter Communications in a deal valued at $78.7 billion. That deal is expected to close by the end of this year or early next year.

Marcus also downplayed the need for so-called skinny bundles, adding that while thinner programming packages may look appealing, most customers end up buying the thicker offerings because they have more value. He said that in the second quarter, 82% of new TWC customers opted for the “fattest of the fat” bundle.

"The headlines over the last several months have been way ahead of the facts," Marcus said. "We're not seeing this mass migration to skinny bundles.” 

The pace at any company in the cable industry can be breakneck, but Rob Marcus can safely say that his post as chairman and CEO of Time Warner Cable has been downright tumultuous. After suffering through a rough operating year in 2013, Marcus had to contend with a hostile pursuit from Charter Communications later that year that put the second-largest U.S. cable operator in the country in play, ending with a $67 billion offer from Comcast in February 2014.

After a year of racing to the goal of closing that deal, Comcast pulled the plug after it became clear regulators wouldn’t approve the combination. In May, TWC entertained another offer from Charter, this one valued at $78.7 billion. Through all of this, Marcus and his team kept a laser focus on operations, despite the distraction of two major deals and a rapidly transforming cable business.

Marcus, who along with several other Time Warner Cable executives will leave with a lucrative exit package — his is valued at about $100 million — after the sale is completed, has kept his eye on the corporate ball instead of the beach. Today, TWC has reported some of its best subscriber growth in years. In the second quarter, it posted its best results for residential video and high-speed data subscribers since 2008, and its best second-quarter voice performance ever. Its TWC Maxx initiative, including the all-digital conversion of its plant, has added new markets, and investments in customer service have resulted in 530,000 fewer repair calls to TWC call centers; a 15% reduction in repair-related truck rolls per customer relationship; 98% on-time percentage for customer appointments within its industry-leading one-hour appointment window; and a 10% improvement in first-visit problem resolution.

Not bad for a company that just two years ago was said to be on its deathbed. Multichannel News editorial director Mark Robichaux and senior finance editor Mike Farrell sat down earlier this month with Marcus to talk about the turnaround, the new company’s prospects and what lies ahead.

MCN: You’ve come a long way in a short time. How is the three-year turnaround progressing?

RM: If you follow the thread, in my view, dating back to the first quarter of 2014, we really started to turn the company around.

In the early quarters, the improvement was slow and the bar was low because 2013 was kind of messy, but as the quarters passed, if you look back in hindsight, you really can see a lot of the improvements taking hold, with the last two quarters being the most obvious examples of just how much stronger we are.

Admittedly, that is taking the form of a massive improvement in subscribers, and early positive improvements in some of the metrics that the Street doesn’t pay a lot of attention to, which relate to improved customer experience. But the theory of the case here — and I think it’s a pretty solid theory — is that those are the leading indicators and, in the not-too-distant future, we’ll start to see those translate into improved financial results.

MCN: What do you attribute that to?

RM: I attribute that first and foremost to prioritization. If you go back to September 2013, we described to you how we prepared for the transition from [former chairman and CEO] Glenn [Britt] to me and [chief operating officer] Dinni [Jain]. I brought together the senior management team, the top 10 to 15 folks. We all acknowledged the fact that while we’ve done a lot of good things over the years, we were not the best at prioritizing, sticking to our priorities, and making sure everyone in the organization understands what the priorities were. As a result, we would jump from exciting thing to exciting thing, but not necessarily complete a lot of stuff.

It was pretty obvious coming out of that series of meetings that we needed to focus our attention on reliability and customer service over everything else. The root of almost all of the negative feelings toward cable was a function not of inadequate products, not because we hadn’t innovated fast enough, but because things just didn’t work the way they were supposed to and when they didn’t, the interactions customers had with us were less than positive. That sounds like the most obvious thing in the world, but the entire cable industry has danced around this issue since the beginning of time and has never really gotten it right.

MCN: You can directly point to that for the subscriber improvements each quarter?

RM: They are related. There are other things going on as well. We have tightened up our customer-acquisition machine, there’s a better correlation between what’s going on in the call centers and the offerings that we’re advertising, so our sales people are more effective — we’re generating more calls, we’re converting more calls into connects.

Similarly, on the retention side, we’re just tighter. Over time, because ideally the way you grow your subscriber base is you lose none and keep adding, that’s what you want to do. The losing none part has a lot to do with having much better experiences than we’ve had in the past, then word of mouth makes the acquisition side easier and works from there.

It doesn’t mean you throw product development out the window, it just takes somewhat of a back seat to ensure that the stuff we’re already delivering works as it’s supposed to.

MCN: Until then, you leaned more on financial engineering than operations. True?

RM: I’ve heard it before, but I don’t necessarily buy it. I believe there’s a role for what you’re really referring to, managing the balance sheet. I think, in a perfect world, the way you create value is through operational excellence and effectively managing the balance sheet. Interestingly enough, one of the things over the last two years Charter has been rewarded for has nothing whatsoever to do with operational excellence, but rather the fact that they’re a more leveraged pure-play cable company than either [TWC] or Comcast was. And that is something shareholders appreciated. They like the equity and enhanced returns that come with leverage. I don’t think there is anything wrong with that.

In the ideal world, you get your operations firing on all cylinders, generate a whole lot of cash flow and manage your balance sheet in a smart way, and if you can figure out value-creating M&A you do that, too. The characterization of us being either-or — because we were the first cable company and, in fact, the first MVPD to emphasize buybacks and focus on aggressive management of the balance sheet — we somehow got pigeonholed as the financial-engineering guys.

In fact, we did something that was longa-waited, because the story on cable for years was free cash flow is coming later. We said, it’s here now and we’re going to highlight the fact that it’s here by committing to both paying a dividend and buying back shares. I think it’s an unfortunate characterization.

It turned out that shortly after our becoming a separately traded public company and our institution of the dividend and our aggressive buybacks, we hit a speed bump on the operations side. I really don’t think they were directly linked. That said, look, we were clearly conscious of our free-cash-flow generating capability, which makes you very disciplined about capex. Whether or not there was some capital we should have spent a little earlier, I think there is some argument to be made there.

MCN: And now you’re spending it.

RM: We’re spending aggressively now, but with a very specific objective in mind. There is clearly an overriding interest in reliability, but there’s also a desire to deliver a truly compelling set of products, mostly faster speeds in high-speed data, and that requires the dedication of more bandwidth to high-speed data, and the dedication of more bandwidth requires us to rid the plant of analog video, which consumes a whole lot of bandwidth in an inefficient way. That’s more or less what many in the industry have done. The knock that we didn’t invest enough comes from a misunderstanding of what we did do.

We invested heavily in implementing switched digital video, which enabled us to have the most high-definition channels of anybody for a long period of time. It was a much faster, cheaper way to get to more high-def channels. Others, for various reasons, which include quality of plant and architecture, chose to go immediately to all-digital. We didn’t feel that was a cost-effective way of accomplishing our mission.

Now, having had the HD channels for a long time, we have another motivation, which is delivering faster speeds in broadband. Now, we’re going through the process of going all-digital.

MCN: Sen. Bernie Sanders (I-Vt.) has sent a letter to the Federal Communications Commission to ask about fairness in pricing for broadband. Is an inquiry like that warranted?

RM: There continues to be this perception that it is not a competitive market; that the market is not somehow working. Living in the world we do every day, competing for customers, that couldn’t be further from the truth. The best governor of pricing is an effective marketplace and we live in that world every day.

Affordability is always going to be an issue for our products and for other products. That’s why we try to be creative about having offerings that are designed for folks who are on a tighter budget. But it can’t be the case that you can get for the really low price all of the great attributes in the products that you can at the higher-end prices. There is always going to be the Hyundai and the Mercedes.

MCN: On the broadband side, are you concerned at all that Title II is essentially a price regulatory framework? There have been inquiries about your relationships with peering companies.

RM: As you know, various parties that deliver broadband or that are lobbying bodies for people who deliver broadband like the [National Cable & Telecommunications Association] have filed a lawsuit challenging the Title II reclassification. It concerns us that the tool that was used to effectuate a relatively noncontroversial set of open Internet principles was overly broad in that it could authorize the FCC to do a whole bunch of other stuff, including regulating prices. Our preference would have been that we had very tailored legislation creating this set of rules and not depending on a 1930s-era statute to do what they have done. For now, we’re continuing to invest on the premise that the FCC is going to live by its word and has no intention to regulate rates. Different administrations could take different positions over time. But for now, we’re operating on the assumption that their intent was to do exactly what they said, which is ensuring that the open Internet principles were abided by.

MCN: Do their inquiries into the edge providers concern you?

RM: The presumption that we have this gatekeeper position and that we’re incentivized to [abuse] that position … I would argue that we don’t have that position. The marketplace is effective. Even if we did have it, the things they are suggesting we would do are totally against our interests. The second we start interfering with that in any way, customers are going to choose somebody else.

MCN: If programming continues to be challenged with more competition from smaller over-the-top players, and broadband emerges as the main core product, the only leverage the cable industry has is on the price of that broadband. And the second prices go up too high, we’ve already got the law in place.

RM: It’s not a new phenomenon. Video profitability has been declining for some time, not based on upstart OTT guys, but that our programming providers have been able to take a bigger share of the pie. They’ve negotiated prices that we pay them that exceed the rate at which our revenues from that product are growing. That’s been happening for a long time and that means we’ve been far more dependent for many years on broadband as a source of profitability, not just on revenue. I think that is likely to continue.

MCN: You mentioned affordability earlier and now “skinny bundles” is the new buzzword in the industry. Where do you see that going?

RM: My point is that you’ve got to meet customer preferences and giving customers’ choice is a good thing. That’s why we have five or six tiers of HSD service — our goal is to have a good match between what customers want, the value they ascribe to something and the price they are willing to pay. That’s true on the video side as well. On the HSD side, we have complete latitude to do whatever we think customers want and will pay for. On the programing side that is not the case. We have partners in the form of our programming providers and we can only do what our programming agreements permit us to do. We’ve tried to negotiate as much flexibility as we can over the years, but we don’t have complete flexibility, and as a result putting together the packages is tricky. My view is I want to give customers choice if we can within the confines of our programming agreements.

Our experience has been on video that most customers, even when we offer skinnier bundles, tend to take the whole package because it’s a very compelling value proposition. While everybody complains about the cost of cable, at the same time you get an awful lot of entertainment value for what you pay. We were ahead of the curve on this whole concept of skinny bundles; we offered something called TV Essentials four-plus years ago. I think it was 20 of the top 40 networks, but no sports programming. We took all of the really expensive stuff out, which allowed us to offer it at a low price. We promoted it and the vast majority of customers who responded to the offer took the big bundle. It just never had any traction. We’ll see if any of the other guys who have been playing around with new skinny bundles have any success and if they do we’ll pay attention to it and try to offer something comparable.

MCN: It seems to me that skinny bundles and things like Sling TV, which were supposed to be the savior of at least some kind of pay TV, aren’t going to be able to do it alone.

RM: I don’t know if pay TV needs a savior. There are two things going on, and there is a tendency to conflate the two — we’re increasingly making video consumable in IP, which in turn means it is consumable by devices that could never have received it before. The second thing is purely about packaging. We can have skinny bundles on the set-top box or skinny bundles that are delivered by a new technology. It so happens that programmers seem to be more lenient in terms of packaging requirements when you’re using a nontraditional technology to deliver the video bundle. That shouldn’t be the case.

MCN: Won’t that just accelerate the disintegration of the traditional business model?

RM: Not necessarily. If we find ways to attract customers, if we deliver products that are attractive to customers, then I’m not sure that there is a disintegration at all. When we did our original skinny bundle, TV Essentials, our goal was to offer a cheaper, more-targeted product but maintain our video margin. It can be done if you structure it correctly.

MCN: In terms of the bigger picture of the cable-industry efforts on TV Everywhere, that you have to come through our door to get it in every platform, versus these smaller, more nimble competitors …

RM: And yet no one has delivered remotely close to what the cable video offering is.

MCN: And yet the programmers seem to be intoxicated by this idea of, “We’ve got to fill this gap, ratings are down, ad revenues are down, let’s get some of this quick money from OTT.”

RM: It’s kind of circular. I would posit that one of the primary reasons that ratings are going down is that programmers have made product available to OTT or SVOD providers who are then in turn making the product consumable on a more attractive basis — read, advertising-free. So the reason customers’ eyeballs are going to SVOD is they like watching stuff without ads. So, it shouldn’t be a great surprise then that that’s the way they watch it.

MCN: So where does that end up?

RM: I think it is something that various programmers have now …

MCN: Rethought?

RM: Yeah, I think they understand it. It’s always hard when you have a traditional, established business that is generating really nice financial returns, there’s always a temptation to take the dollar that’s viewed as extra money, thinking that it’s too small to have an impact on the legacy, until it’s not.

MCN: How much of this is generational? When a millennial gets to be 40, married with two kids — four different demographics — now, are they going to buy a TV subscription?

RM: On CNBC, there was a back and forth between [BTIG media analyst Rich] Greenfield and Joe Kernen, debating that exact thinking that kids are watching things differently and on small screens and Kernen finally said, “I don’t know, I don’t like what I’m hearing.” The old guy lamenting that the world is changing and we can’t keep up. And we feel a little bit of that. We don’t understand what’s going to happen and until we have that, it’s less a generational thing and more a life-stage question. Do people behave differently in different life stages independent of what demographic they’re in? We don’t know yet. These guys will be the first IP generation.

MCN: What’s next for Rob Marcus?

RM: How many times have you guys asked me that question? [Laughter.]

When we announced the Comcast deal, people were immediately asking me because it was obvious that [Comcast chairman and CEO] Brian [Roberts] wasn’t going anywhere. I made clear that my 100% focus was on running Time Warner Cable until I got tapped on the shoulder and was told to move aside. That turned out to be critical.

It’s critical because, as a leader, you have to be emotionally all-in or else you are not going to do your job well. More importantly, it sends an important message to the team. If there is a perception that I’m thinking about something else, they quickly abandon ship. How could they be with the program if they think the boss is not really with the program? So my strategy from the get-go has been, it’s all about Time Warner Cable until it’s not.

Time Warner Cable chairman and CEO Rob Marcus received $34.6 million in total compensation in 2014, more than four times his take in 2013 and fueled mainly by big gains in stock awards.

Marcus, who spent most of last year preparing for a merger with Comcast that was ultimately thwarted by regulatory concerns, received a base salary of $1.5 million in 2014, a 50% increase from the $1 million he received in the prior year, according to a prixy sttaement filed with the Securities and Exchange Commission Monday. But the biggest gain was in stock awards -- $24.7 million in 2014, more than 10-times the $2.2 million he received in the previous year. Marcus also received $7.95 million in non-equity incentive plan compensation in 2014, more than twice the $2.7 million he received in 2013.

Chief financial officer Arthur Minson received nearly $13 million in total compensation for the year, more than double the $5.5 million he received in 2013.

While the termination of the Comcast merger caused some top executives to lose out – Marcus and Minson were expected to receive $80 million and $27 million in severance after the deal closed – TWC’s board of directors did make some changes to the 2014 compensation program designed to support shareholder alignment as well as motivate and retain talent as the merger wound through the approval process. Included in that plan were enhanced cash bonus opportunities based on performance and the advancement of certain annual equity awards into 2014.

In the proxy, TWC said the length approval process and the termination of the Comcast deal underscored the importance of the changes to the compensation plan.

“The company’s executive team remains in place and—as evidenced by the company’s 2014 operating and financial results—was intently focused on achieving the company’s short and long-term goals despite the uncertainty and challenges during the pendency of the transaction,” TWC said in the proxy. “In addition, the retention equity awards remain subject to their time-based vesting schedules and, consistent with its intent when the retention equity awards were made, the Compensation Committee made no new equity awards to the named executive officers in 2015.”

Chief operating officer Dinni Jain, who joined TWC in January, received total compensation of $17.98 million, including $12.1 million in stock awards.

Comcast terminated its planned $67 billion purchase of TWC on April 24, after it became clear to the company that it would not receive regulatory approval for the deal. Since then, TWC reported one of its strongest first quarters ever, adding 30,000 basic video subscribers, the first period of positive video growth for the company in about six years,   

Who needs the upfronts, with their professional comedians and fancy clips and trailers? For the finance set, there was plenty of funny going on at what is becoming one of the hottest tickets among people who generally have to search for humor deep within EBITDA and OIBDA results, the MoffettNathanson Media & Communications Summit in New York.

Although not open to the media, presentations at the standing room only conference were streamed live on the Internet by most of the companies – at least the publicly traded ones – and sprinkled among the boiler plate were a few comic gems from the likes of Comcast chairman and CEO Brian Roberts, Charter Communications CEO Tom Rutledge, Time Warner Cable chairman and CEO Rob Marcus, and AMC Networks CEO Josh Sapan.

While nobody is suggesting any of this group quit their day jobs, here’s a sampling of some of their more humorous asides.

• Josh Sapan on his first encounter with streaming live video service Meerkat:

“I downloaded Meerkat and was pressing buttons like the old guy I am, and I kept looking up at my phone and it kept saying, ‘Stiletto Supermom is live now.’ I kid you not. Finally my wife looked at my phone and said ‘What’s with you?’ Stiletto Supermom turned out to be a mother with her daughter cooking dinner. We actually decided to push the button and check out the transmission on Meerkat and it was very benign. It was, frankly, ferociously boring.”

• Brian Roberts on the first time he and now-NBC Universal chief Steve Burke called on former Viacom CEO Mel Karmazin to discuss a deal for the fledgling technology of On Demand:

“We were there to get 60 Minutes and Mel said, ‘I’m going to put my head down on my desk and cover my eyes and count to 10 and when I’m done, I want you two guys gone.’”

• Rob Marcus on whether, in light of the termination of the Comcast merger and consolidation speculation, he had any news to share:

“What did Rutledge say?”

• Brian Roberts on being told by Bill Gates in 1997, just before the Microsoft founder invested $1 billion in Comcast, that one day Internet customers would exceed video customers.

“I didn’t know what he was talking about, but I was happy to take the $1 billion.”

• Tom Rutledge on the notion that FCC chairman Tom Wheeler isn’t too enamored with cable’s broadband success:

“What are you going to do? You’re selling stuff and people are buying it. You should keep doing that.”

Despite recording what it says was its best quarter subscriber-wise ever, Time Warner Cable said that growth won’t translate into meaningful cash flow growth until 2016.

Time Warner Cable added 30,000 basic video subscribers in Q1, its first positive showing on that front in six years. In addition, the operator added 315,000 residential high-speed data customers (best since Q1 2007); 320,000 phone customers (best ever); 298,000 triple play additions (best ever) and 205,000 customer relationship net additions (best ever).

But getting to those numbers costs money, and TWC chief financial officer Artie Minson said on a conference call with analysts Thursday that as a result of higher capex requirements – as well as pension costs, additional costs from its Los Angeles Dodgers regional sports network deal and overall higher programming costs – cash flow in 2015 will be flat. Minson likened the TWC business to a flywheel, adding that while it may take extra energy to get it started, once it’s one the move, there is no stopping its forward motion.

“You have to spend to get the subscriber machine running,” Minson said. “But once its running like our flywheel is now, you’re in a great position to deliver strong, sustainable financial growth.”

And so far it is running pretty smoothly.

Minson predicted that adjusted OIBDA could hit about $9 billion in 2016, a nearly 10% increase over 2014.

The basic subscriber growth was well ahead of analysts’ expectations – consensus estimates were for  a gain of about 12,000 customers – but chief operating officer Dinni Jain said the growth did not come at the expense of other pay TV providers.

“It is tempting to look at this as a complete zero-sum game, that if were growing that absolutely means somebody else is not executing as well as they want to,” Jain said. “The reality is there are a lot of jump balls – every time a customer moves, every time a customer is looking to change. We’re winning a lot more of those jump balls than we were last year or the year before. We’re so focused on a lot of small things. ...Our Triple Play is not dissimilar from a lot of the others in the industry; we’re not particularly aggressive in promotions. What we are doing is executing very well. “

Chairman and CEO Rob Marcus deflected questions about whether the strong quarter means that TWC will try to resist the inevitable takeover offer from Charter in the wake of the terminated merger with Comcast, adding that the company is focused on growing the business and increasing shareholder value. But he did say that even as TWC was moving through the approval process for the Comcast deal, he urged employees not to take their eyes off the ball.

“While we were confident that [Comcast] transaction would be consummated, back in February of last year I gave our operating team very clear instructions: in the unlikely event this deal doesn’t close, be ready,” Marcus said. “… As I sit here today, I will tell you that our team surpassed my wildest expectations.”

Time Warner Cable chairman and CEO Rob Marcus said at an industry conference that if recent over-the-top video offerings lead to more flexibility in programming contracts, he’s all for it.

Recently, Home Box Office and CBS have announced plans for an online video product that doesn’t require a pay TV subscription and others are expected to follow. While Marcus wouldn’t comment on those products specifically, he said if it means that programmers are beginning to loosen the reins on some programming issues, it could lead to overall growth in the video product.

“We’ve been articulating for quite some time that we thought that delivering video with a greater degree of flexibility would be very customer friendly,” Marcus said at the UBS Global Media & Communications conference in New York Monday. “Whether that is flexibility around devices, place- shifting, time-shifting , or flex in the way we package video services so we could make different customer demands. To the extent any of these recent announcements are reflective of programmers’ greater willingness to play ball on that front, greater willingness to explore new models, we’re in.”

Marcus didn’t seem to be worried about the potential that these services and other over-the-top offerings from Sony, Verizon and Dish Network could have in luring away pay TV customers. He said that right now, his focus is on traditional competitors like satellite TV and telco TV.

“I tend to focus more on our traditional competition than I do on the threat from OTT,” Marcus said. “There is no question that there is some element of cord-cutting out in the universe, but I don’t think it is having anywhere near the impact that  losing customers to traditional competitors has on our lives day to day. …We are confident about the value proposition we offer on the video side and we’re getting more confident as we enhance the product with a better guide, more VOD, improvements to our TWCTV app. We think we can compete with any variation on the video theme.”

 To that end, Marcus said that subscriber metrics have been strong and that Time Warner Cable has every intention of growing video subscribers in 2015.