CHICAGO — Broadband, OTT, the fight against onerous and outdated regulation and a pep talk from an unlikely source — a programmer — were all a part of the 2019 Independent Show, the yearly gathering of smaller, independent operators here.

This year’s theme was “Ignite” and the return to Chicago appeared to be a charm — the show was first launched 14 years ago in the city under the theme “Winds of Change” — with hundreds of operators, programmers, equipment vendors and their families making the trip to the Sheraton Grand Chicago hotel. The 2020 show will be held in San Antonio, Texas, July 26-29.

Viacom CEO Bob Bakish became the first major programming CEO to headline a keynote session at the show, and although he noted the sometimes contentious relationship his company has had with small cable in the past, came to mend fences with operators.

Fixing ‘Frayed’ Relations

Bakish admitted that Viacom’s past dealings with small cable operators have been “frayed:” Cable One and Suddenlink dropped the networks in 2014. (Only Suddenlink eventually renewed.) Since Bakish came on board in 2016 and focused the programmer on its six core brands, though, Viacom has worked hard to repair that relationship.

“[W]e stepped back, evaluated the situation to figure out how we could work with distributors in a more partnerly way,” Bakish said, which he determined would be to expand the scope of the distribution relationship, including licensing linear feeds and VOD content and exploring deeper relationships on the advanced advertising front.

“Since we’ve done that, we haven’t gone dark with anyone, we’ve renewed or extended the vast majority of our traditional sub base, we’ve actually increased our distribution and we’ve gotten access to plant for advanced advertising,” he added.

Bakish expects that relationship to evolve to its new acquisition, with Pluto TV becoming a successful complement to cable broadband service.

“The reality is, all of you have footprints and markets all around the country in all different-sized markets,” Bakish said. “There is great power in that, because you have those local consumer connections. I don’t want to go build those. I would rather work with the people that have them and figure out how, working together, we can grow our businesses.”

Regulation, as always, was a big topic at the show, with former Bush White House press secretary Ari Fleischer urging operators to continue to pressure regulators on issues important to their businesses.

“If you’re not involved, you’re going to lose,” Fleischer said in a Q&A with ACA Connects president and CEO Matt Polka, adding that particularly with complex issues like net neutrality, few members in the House and Senate fully understand the issues weighing on the industry. “The only way they will believe in you is if they see you, they hear you and they feel you. Activism is at the heart of what you have to do.”

Former NCTC chairman and retired MCTV chief Bob Gessner kicked off the conference with a CEO panel featuring top executives in the small cable space — including his daughter, MCTV president Katherine Gessner, who pointed out just how powerful offering a compelling high-speed service can be.

Katherine Gessner said MCTV began overbuilding its network with fiber-to-the-home in 2014 or 2015 and last year began acquiring a few small properties near its traditional service territory. Upgrading those systems has resulted in strong broadband growth, she said.

“We shut off the analog plant in the first system in November and went from 0% internet penetration to about 20% in about seven months,” Katherine Gessner said. “It really opened our eyes to the need for rural broadband.”

OTT, SVOD in Spotlight

OTT and SVOD products also garnered some attention from small operators. In a panel session titled “Kindling and Sparks … Getting Your OTT & SVOD Strategies Blazing,” Vyve Broadband senior vice president of marketing and customer service Diane Quennoz said the days when every pay TV provider’s video packages were the same are over.

“The challenge is picking the right horse,” Quennoz said. “TV can’t be the same way it was three, five or even 10 years ago. Viewing habits change. The challenge is we have so many different carriers.”

Cincinnati Bell director, programming and content Jonathan Bond pointed out the difficulty that smaller operators have when dealing with mega-companies like Netflix.

“Netflix called us ‘cute’ when we had 300,000 video subscribers and 170,000 broadband subscribers,” Bond said. He was not optimistic that the SVOD pioneer’s recent subscriber losses — it shed 130,000 domestic customers in Q2, its first period of domestic subscriber losses — would make it more receptive to smaller operators.

“Probably not,” Bond said. “It would probably take multiple quarters [of declines].”

Chicago -- Former White House Press Secretary Ari Fleischer urged small cable operators to keep up the pressure on Washington legislators on key issues facing the industry, telling an audience at The Independent Show that their continued activism is key to their success.

“If you’re not involved, you’re going to lose,” Fleischer said in a Q&A with ACA Connects president and CEO Matt Polka, adding that particularly with complicated issues like net neutrality, few members in the House and Senate fully understand the issues that are weighing on the industry. “The only way they will believe in you is if they see you, they hear you and they feel you. Activism is at the heart of what you have to do.”

Earlier, Fleischer gave his take on the successful campaign of President Donald Trump -- he said that unlike Democratic candidate Hilary Clinton, Trump appealed to blue-collar workers who believed they were being ignored by Washington -- and predicted that the 2020 presidential election will have record turnout.

Fleischer went to bat for small cable operators who have endured criticism that they shouldn’t be trusted with something as vital as the internet, adding that the actions of smaller operators speak louder than words.

“If ever there was an issue where the attacks on your position were exaggerated, it’s this one,” Fleischer said of the net neutrality debate. “As if the FCC’s ruling destroyed the internet? I do think you have history on your side to show that the opposition was wrong. That’s a good starting point.”

Fleischer suggested that cable operators continue to make the case of providing what consumers want, stressing that “superb” customer service is essential.

“If people call you the local hometown provider and they think they are falling into the same type of consumer responsiveness that they get from the giant cable providers, then you haven't differentiated yourself. If you believe in your small town, in touch, local community base, the people who answer your phone and help your customers have got to provide that service, otherwise it rings hollow,” he said.

Fleischer, who had his own disagreements with reporters during his White House tenure, touched on some of President Trump’s criticisms of the press, adding that his assertion that the press is an “enemy of the people” is unwarranted.

“No, the press is not the enemy of the people,” Fleischer said. “Every President needs to have their feet held to the fire. ...They are often liberal reporters who make mistakes. President Trump has proved something, that he can push back, he can fight back in a way that [former Republican Presidential candidates] John McCain and Mitt Romney did not. But I also believe that there are bounds and there must be civility in how we carry out our arguments in the White House and as Americans. I’ll just say that they’re liberals and they’re wrong. I won’t say they are enemies of the people. ”

Fleischer also decried the absence of White House briefings, but said reporters shouldn’t miss them because they have something better -- access to the President.

“I give tremendous credit to President Trump for going out there and being his own press secretary,” Fleischer said. “He takes questions every day. That’s a reporter’s dream come true. As much as reporters complain, as much as they hate the President and the President hates them, and there’s this terrible hostility, he gives them the No. 1 most important thing they need and that is access to him to ask whatever is on their mind.”

Earlier, Fleischer said he would bring back the briefings, but not put them on TV.

“It shouldn’t be a TV show,” Fleischer said. “The briefing should be a normal conveyance of governmental information to reporters with questions so that reporters don’t posture and argue back and stand their ground so they can become famous and get Twitter followers. Take it off the TV and just make it a good old fashioned briefing.” 

CHICAGO — Bridging the digital divide in small rural communities is still a top priority and one that can help operators drive sales growth even as video customers dwindle, a panel of top small cable CEOs said at The Independent Show’s Opening General Session.

“Providing that local connection, and not just driving the content of those customers, [is critical],” said Buckeye Broadband president and general manager Geoff Shook at the session titled Hot Topics, Cool Leaders. “Owning that relationship from the edge of the end user’s device all the way through the businesses.”

MCTV president Katherine Gessner added that just providing the service isn’t enough for success. Education is a key part of the puzzle.

Gessner told the audience that in MCTV’s initial moves to convert some newly acquired customers from fairly antiquated systems to fiber-to-the home, they were reluctant to switch, even though converting meant they would get data speeds four times faster than their old DSL service.

“They didn’t understand what you could do with it [higher speeds],” Gessner said. “We found out there was a waiting list for DSL. They didn’t want to switch because they were scared that if our service didn’t work they couldn’t go back.”

For Schurz Communications, president and CEO Todd Schurz said one solution has been to partner with other providers in building out broadband networks. Schurz is currently working with local governments, using some state grants in Vermont and Minnesota, working with telephone co-ops in Iowa, electric co-ops in Minnesota, and Native American nations in Minnesota and Arizona.

“What we have found, all of these are structured differently, there’s no one model that fits everything,” Schurz said. “But it’s something that everybody realizes they need to do.”

“If you can go to some of these local entities and say, ‘You don’t have to build a digital headend, you don’t have to worry about all of that infrastructure, and you can put your resources into upgrading the local network, and we will then take the handoff,’ that seems to work pretty well,” he said.

As the industry moves closer toward 5G wireless services, smaller operators are helping to lead the way. At Shentel, executive VP and chief operating officer David Heimbach said that while his company is moving forward on wireline initiatives like DOCSIS
3.1 — which should be completed by the end of the year — they are also making inroads with 5G.

Heimbach said Shentel is currently trialing a 5G service, but there is still plenty of time before that service becomes essential. Of the 5 billion discrete wireless customers worldwide, he said, only one-third are on a 4G network and only 15% of mobile customers are expected to have 5G by 2025.

“This has a long tail on it,” Heimbach said.

But small operators are forging ahead, building out their networks and providing state-of-the-art service to customers, largely funded by their own coffers.

Gessner said that although MCTV did look into obtaining federal grants to build its fiber network, it didn’t make sense in the long run. MCTV began overbuilding its network with fiber to the home in 2014 or 2015 and last year began acquiring a few small properties near its traditional territory. The upgrades have resulted in strong broadband growth, she said.

“We shut off the analog plant in the first system in November and went from 0% internet penetration to about 20% in about seven months,” Gessner said. “It really opened our eyes to the need for rural broadband.” 

CHICAGO — The Independent Show — which kicks off today (July 29) in Chicago — is shifting with the changing cable sands this year, offering members more marketing, workforce and e-commerce sessions in line with the industry-wide transition toward broadband and IP services. National Cable Television Cooperative CEO Rich Fickle spoke with Multichannel News about the show and and other issues affecting small cable operators. An edited transcript follows.

MCN: What’s different about the show this year? What should operators be looking for?

Rich Fickle: If you looked at the show content three years ago or four years ago, it was probably 80% video-driven. Now you’re seeing a broader mix, more broadband and some other areas relating to the management of companies. So, for example, this will have a focus on three panels regarding workforce hiring. Next generation — there are a lot of family-run companies, so there are a lot of special circumstances associated with that. It’s really an interesting time, in terms of how do you find a workforce that can adapt and operate in a much more software-driven world, given the mix of services? That’s one critical theme.

The folks in our group and ACA [Connects] on the legal side put together a pretty good program that is attracting some of the top legal executives from across the membership. That’s a first for us.

There is much more of a focus on marketing. As some of these services start to look alike across the competitive landscape and there is more competition, how do you differentiate yourself as a smaller operator? Where do you stand in terms of your brand, and what are the best practices that you can learn from others to compete with sometimes larger companies?

MCN: How different is it marketing broadband, apps and IP services than the traditional bundle, which mainly was sold on a price-comparison basis?

RF: Operators used to have a common, triple, double, sometimes quadruple play, and everyone was organized the same way and it was a call-center sales process. Today, I think it’s much more of an e-commerce play — allowing customers to find you easily, make their selections online and, in some cases, fill their requests online and even from the comfort of their remotes at home. That’s a different paradigm.

MCN: I see that you’re doing a General Session with Viacom. Is that a first for you guys?

RF: It is. We recently completed a renewal with Viacom and I think the terms are good, they’re attractive to a lot of our members. It doesn’t mean you won’t see some members think long and hard about the renewals, just because of the way that pressures are with the cost of video. We thought it was appropriate, given that we were able to reach a positive agreement with Viacom, to have their executives spend some time talking about what’s going on with that company, and a little bit about the deal structure and where they’re going. I would give kudos to [Viacom CEO Bob] Bakish and his team in their efforts to revitalize those relationships across the industry, ours included.

You’ll see another similar approach on the technology side. We invited some senior executives from a couple of the large suppliers to talk about their businesses and the challenges they have, given things like competition on a global basis, tariffs and shrinking R&D budgets. We thought we would let these executives help us understand what’s important to them, what the challenges are and how we can work together more collaboratively.

MCN: There are some breakout sessions on topics like HR. Is that becoming increasingly important to your membership as technology advances?

RF: It is. In some ways it’s kind of an aging workforce, and the question is, how do you recruit and attract that next generation? The old way I grew up in cable, you had technicians that were at the top of the food chain in terms of being able to solve problems and turn things around. Now a lot of the tech skills are embedded in support systems, alarming, alerts and diagnostics. [Call-center reps are] no longer customer-service reps. They’re really technical support people now, with tools that are far different than what we had five years ago.

MCN: What can members do for fun at the show?

RF: We’ve got an afternoon out at Wrigley Field, giving members and their families the chance to run out on the field, run the bases, throw pitches, hear from the Cubs management and a few players. I think it will be a tremendously popular event and it’s being done in partnership with Sinclair, which struck a relationship with the Cubs [forming RSN Marquee Sports Network]. … We’re grateful to Sinclair, to have them participate in a big way, and once again it’s a sign of the different approach to how we’re adapting to the challenges in the industry.  

CHICAGO — The Independent Show is really two shows in one for small cable operators — an opportunity to meet, reconnect and share ideas with other small operators from around the country, and an opportunity to bone up on regulatory issues and trends with the biggest small operator lobbying group in the country, ACA Connects. ACA Connects CEO Matt Polka spoke with Multichannel News about what attendees should expect to see and what sessions could be of particular interest. An edited transcript follows. 

MCN: Going into the show, what should small operators be expecting from ACA?

Matt Polka: There is a lot that we’ve been working on together with our friends at NCTC to make this show stellar and to stand out in our industry, which I think it does, now that there are basically fewer shows. It puts a lot more focus on our Independent Show and our members and what they are doing, which was ironically the goal when we introduced The Independent Show 14 years ago in Chicago.

In terms of the show itself, we expect this to be one of our largest ever for a couple of reasons. There are fewer shows, so you’re getting more participation from operator members, as well as vendor companies that want to come out to support it. The second reason is we’re in the middle of the country in Chicago, where if you draw a 400- to 500-mile circle around Chicago, you can draw a lot of people in who can drive. As we saw a couple of years ago in Indianapolis, a show like this in the breadbasket of the country helps to bring in members.

“Ignite” is a really good term for our theme. Fourteen years ago, it was “Winds of Change,” and that was appropriate then as we were introducing a brand-new show. Now, Ignite is just as appropriate, because so many things are hot, they’re moving, they’re important right now, whether it’s business, technology, policy, operations, over-the-top, 5G spectrum issues. [There is] a lot more that our members are involved in, day to day, than they ever were back in 2006.

MCN: Tell us about some of the speakers you’ve brought in. I see that former White House press secretary Ari Fleischer is scheduled for the Tuesday keynote.

MP: Ari Fleischer is nationally known, former key staff in the Bush White House, someone who has made his views felt on Twitter and in our industry. And while he speaks from a particular political point of view, the one thing that has always impressed me about Ari, particularly when I follow him on Twitter … throughout everything he says are two important elements that are sorely lacking in Washington today: common sense and fairness.

We’re bringing in another keynote on Wednesday, Bill Conner, the CEO of SonicWall. Bill’s been in cybersecurity posts and technology all of his life, from an association perspective and a business perspective. Beyond that, in addition to his work advising clients, he’s an international expert on the threats that today our nation, our government, our infrastructure, our business face from all across the world. After Bill is done, I think a lot of people are going to run out and start changing their passwords.

I’ve been happy to work with the development of our CEO leadership panel this year, which will be Monday morning after we have our kickoff. Bob Gessner, who is our current chairman at ACA Connects, is going to moderate that, along with his daughter Katherine, who is the president of MCTV; Dave Heimbach, who’s the COO of ShenTel; Todd Schurz, the CEO of Schurz Communications; and then Jeff Shook at Buckeye [Communications], who is the operational head of Buckeye in the Toledo [Ohio] area. This has become kind of a tradition for us, but it’s really great to benchmark from some of our top leaders.

MCN: I see there are sessions on the legal track and on state government issues.

MP: Our SVP of government affairs, Ross Lieberman, and our VP of regulatory affairs, Brian Hurley, have been working closely with Jeff Nourse [NCTC SVP regulatory and legal affairs] on developing this very very strong legal track that will certainly attract practicing lawyers, general counsels and legal staff for our members, as well as other interested parties.

MCN: The Independent Show always struck me as one where the members realized maybe more than most that talking to other people in the industry was good for their business. In this climate, is that more important than ever?

MP: Many people say that our show harkens back to what cable used to be like. It’s always one of the top reasons our members give us in surveys for coming to the event, and that is to be able to have lunch and dinner with another member to network, to ask how they’re handling this problem or that problem, to benchmark with each other. I think that’s one of the coolest things our show provides.