Back on Track In Home of the Derby

Cable World, Sept 23, 2002

Byline: MAVIS SCANLON

Come spring, the first weekend in May to be exact, little else matters in the river port city of Louisville, Ky., besides the Derby. Unfortunately, the world's most famous horse race, run at Churchill Downs, isn't on cable.

Lucky for Gregg Graff that horse racing isn't the only leisure activity beloved here. As Insight Communications' SVP for the region, Graff oversees the major cable system in the 50th-largest TV market, as measured by Nielsen. Louisville is also a model of Insight's strategy to offer a bundle of interactive digital video, high-speed-data and telephone services.

NASCAR racing - which most definitely is on cable - also happens to be a favorite with Louisville residents. According to Scarborough Research, about 25% of Insight's customers follow the sport, a percentage that indexes well above the average for consumers in the top 75 markets. Ditto for bowling and fishing. College sports are popular as well. A Sept. 1 Louisville Cardinals-Kentucky Wildcats football game, broadcast on ESPN2, delivered a 23.7 household rating in the Louisville DMA - the highest-rated cable program of the year, according to Insight Media Advertising.

Although the city so far has failed to attract a major league sports team, it counts among its manufacturing base the Hillerich & Bradsby factory, which makes the legendary Louisville Slugger. So it's appropriate that the city is currently going wild over the Valley Sports American Little League team, the hometown team that defeated Japan to win the Little League World Series last month.

ICN 8, Insight's local origination channel in Louisville, is big on covering local sports, and the newly crowned Little League champions could be a boon for the channel. ESPN's Little League broadcast regularly draws high single-digit ratings, and Graff is in negotiations with ESPN to rebroadcast the last four games in the series.

Pursuing its strategy of geographic concentration - Insight's 1.4 million customers are clustered in Indiana, Illinois, Kentucky and Ohio - Insight scooped up its 50% interest in Louisville and Kentucky's three other major markets, Lexington, Bowling Green and Covington, in October 1999 for just under $1.1 billion. (AT&T Broadband still owns the remaining 50%, but Insight manages the systems.) Prior to Insight's acquisition, the system either flipped or was sold every couple of years, with a list of owners including Storer Cable, TCI and Intermedia Capital Partners. Morale among employees, who were dispersed among nine buildings throughout the city, was low, to put it mildly.

The turnover in ownership prevented previous owners from investing in people, products and the cable plant, says Kim Kelly, president of Insight, the ninth-largest MSO and the largest in both Indiana and Kentucky. As a result, the system's product was overpriced, and not up to par. One employee told Kelly that she used to take off her employee badge when she went into the local Kroger's market so she wouldn't have to hear customer complaints.

Enter Gregg Graff, a cable veteran whose career includes stints at Continental Cablevision and Paragon Cable. Graff's charge in Louisville was daunting: to complete the network rebuild and to launch a suite of new services, including digital telephone. Another challenge was more immediate - to galvanize the 700-plus employees who'd nearly given up on the notion that their company might get its act together.

"We had been through so many swinging doors that there was a lot of apprehension," says Reba Doutrick, Insight's regional community relations manager. "Insight came in and talked about a no-layoffs policy, and immediately there was a collective sigh of relief."

Graff says the skepticism was palpable the first time he gathered the group together and told them Insight was here to stay and would be building not only the system but also a new headquarters. Getting all the employees situated in one location was a top priority; late last year, the new HQ was up and running.

"No matter how many times we said we were not here to flip, the building was tangible evidence that we were willing to invest in the system," says Kelly.

The new space also has had an impact on the operation itself. Close to 30,000 square feet of the 89,000 square-foot facility is call center space. Whereas before Graff was able to get to the call center once or twice a week, now his office and the call center are on the same floor. "You can immediately get people together to troubleshoot," he says, adding that it's far easier to stay in tune with the operation.

With customer service and techs more easily trained and deployed from one central location, it's easier for the system to focus on its major strategic initiative: selling a bundled package of video, high-speed-data and telephone service. Eighty percent of new customers are taking a digital package, and, systemwide, 23% of new Insight customers are taking a bundle.

"We're seeing the numbers of customers taking two or three services from us continuing to rise every week," Graff says. "We know we're going in the right direction." Overall, Insight has its sights set on 50% digital penetration companywide in three years and 30% penetration of telephony and data services.