Live From New York: It's Time Warner Cable

Cable World, July 15, 2002

Byline: MAVIS SCANLON

The media- and computer-savvy of Time Warner Cable's subscriber base in New York City, the country's largest contiguous cable system, is underscored by one little statistic. Four percent of TWC subscribers have watched video programming online, via high-speed Internet connections, according to local market research firm Scarborough. While that number alone seems paltry, it's 154% higher than the average consumer. Media-crazed New Yorkers are also far more likely than the average consumer to read magazines and newspapers online, to pay their bills online and to sign up for premium cable.

Like the Big Apple itself, Time Warner Cable's New York City subscriber base defies any sweeping generalizations. More than half the system's subscribers earn less than $50,000, according to Scarborough, but almost a quarter earn more than $100,000. They're a well-educated bunch: More than half have some college, education and almost a third have graduate degrees. Just about evenly split between men and women, more than a third have never been married, a percentage that indexes well above the top 75 markets measured by Scarborough, and the population of black and Hispanic TWC subscribers, at 47%, may be the majority at some point very soon.

"We have customers at the top of the economic spectrum and at the bottom of the economic spectrum," says Barry Rosenblum, a Time Warner Cable EVP and president and GM of Time Warner Cable's New York City system. "Some whose relatives have been in the United States since before it was the United States and some who have been here for a few weeks - and everything in between."

So how does an operator serve such a diverse - not to mention discerning and demanding in New York City's case - customer base?

Very carefully, Rosenblum says. "You always want to make sure you have a proper variety of programming. You always want to make sure from a technical standpoint that your system is up to date and maintained properly and from a customer service standpoint, you want to make sure you answer your phone politely and solve the problem. If you do those three things - and they're very complicated to do - it really doesn't matter how diverse your area is."

New York is not only one of the more diverse cities in the world, but one of the most buoyant. If there's one thing that New York City has demonstrated since the terrorist attacks of Sept. 11, it's resilience. After several quarters of contraction, the city's economy is showing signs of recovery; the real estate, tourism and professional services industries have remained strong or bounced back after dipping in the wake of the attacks and are helping to offset the blow of tens of thousands of job losses on Wall Street.

One effect of the economic downturn is that advertisers have realized they need to spend their precious advertising dollars more efficiently, which has been a boon for cable.

"We've broken a ton of new accounts," says Steve Berman, SVP and GM at Time Warner CityCable, TWC's ad sales arm. Despite the vicious advertising slump, "we had the best year we ever had," in 2001, he adds - advertisers have come to embrace cable as a niche, targeted play. New York City's attractive demographics have helped, of course, as has the fact that, for the first time, cable's total audience recently inched ahead of the total broadcast audience. According to the CableTelevision Advertising Bureau, the first week of July was the sixth consecutive week in which cable's total prime-time viewing share was above 50%.

The story has helped attract advertisers such as Verizon, TWC NYC's largest advertiser. Other large advertisers include Macy's, Mercedes-Benz, Ford, Coca-Cola, Men's Wearhouse and Lexus. The banking, airlines and movies and entertainment sectors are also big. Advertising from AOL Time Warner units - who can miss the ubiquitous America Online ads on TBS - are counted in a separate marketing category.

Although Berman declined to give specifics, TWCC's 37-person ad sales staff has pushed hard for new business; backed by Rosenblum, who oversees the unit but gives Berman's staff the leeway to run its own operation, sales are up in the "double-digits" compared with last year.

Berman says TWCC, which uses digital advertising insertion equipment from SeaChange Technologies and CAM Systems traffic and billing systems, is competitive with New York's broadcast stations. "We can deliver the ratings," he says. "With 1.5 million homes, we can sell the same way the broadcasters sell." For the top-tier networks, local avails total two to three minutes per hour and can be zoned by ZIP code, but could go higher depending on the network.

While TWCC lives by the ratings, when it comes to programming lineups, ratings matter less than having something for everyone, says Rosenblum, who, at 49, has spent more than 20 years in the cable industry and at TWC has built a team of managers with similarly long tenure. Likewise, what the customer wants - and how satisfied he or she is - plays more into programming decisions than what the competition is doing.