For two decades, Full Channel TV Inc. was the sole operator of a wired pay TV business in a handful of communities in Bristol County, R.I. The company’s network passed 19,000 households in towns such as Barrington and Warren, near Providence. Then, in 2002, Atlanta-based Cox Communications Inc., now one of the four largest cable operators in the country — came in and built a competing system. In a year or two, Verizon Communications will arrive. At last week’s Independent Show in Chicago, chief operating officer Linda Maaia and her son, Levi, its director of new media, told Multichannel News editor in chief Tom Steinert-Threlkeld at last week’s Independent Show how they hope to survive the competition.
MCN: What is it like competing against a Goliath in cable TV, Cox?
Levi Maaia: The biggest challenge is fighting against the onslaught of marketing money that is spent in Bristol County. When Cox came in, its goal was to take as many customers as it could. They spent a whole lot of money and actually, when you look at the returns, they didn’t actually get a whole lot of Full Channel customers out of it. With the redirection towards competing with Verizon, it’s been a little bit of a relief for us. But certainly that continues to be the biggest challenge is getting the word out there, especially to folks that are new to the area: That we are here, that we are the local company and we are here to stay.
MCN: How do you make it clear to the customers what’s different about Full Channel versus Cox?
Levi Maaia: Our goal has not been to go head-to-head with Cox, as far as a pricing war. $99, $98, $97, $96 … it just is not going to work. Our goal has been to provide an everyday value to customers, by not lowering prices then jacking them back up again. Just trying to stay consistent with people and making them realize that what you’re paying now is what you’re going to pay in the future. Not trying to play with special bundling and upgrade offers that expire.
MCN: You peaked at 12,000 subscribers. You’re at about 7,000 now. Have you been able to stem the subscriber losses? If so, why and how?
Linda Maaia: One of the things that has helped us to mitigate the loss of the customers [are] the additional products we offer. We do resell Verizon telephone, local, and we do have high-speed Internet and on-site computer service. It was a huge bleed. Now, it’s down to a trickle. And now we’ve actually seen some growth in the first quarter.
MCN: What’s the effect been on the bottom line since the larger competitor can regard this market as a loss leader?
Linda Maaia: It’s had a major impact on us. One of the things my father (Full Channel’s founder, John Donofrio Jr.) did was set us up to move into the contiguous community. We’re about 90% through that path. So the path is to reach into a new community and increase subscriber growth by competing head-on with Cox.
MCN: What will you do one or two years from now, when Verizon comes in? You’ll have one of the few three-wired-competitor markets.
Levi Maaia: One of the advantages of coming into a new area of Providence is we start over again. We’re not piggybacking new services on existing systems.
We’re coming in with a completely fresh start and we can bring modern technology there on a modern plant that was built and designed for these new technologies. We won’t have some of the challenges that we had in upgrading an older plant.
Cox had spent enough money in Bristol County to extinguish local competition and we survived it. So I think we can hold our own in East Providence as well.
Editor’s Note: The Rhode Island attorney general’s office in May 2005 indicted Full Channel’s general manager and chief engineer for allegedly stealing programming from Cox and rebroadcasting it. The events pertaining to these allegations occurred before the Maaias arrived at Full Channel, according to Levi Maaia.
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