Comments
JohnBarnes
3/24/2016 7:40:16 AM
User Rank Platinum
Classic problem in PR
It is probably unjust that MediaCom is at the brunt of complains about rising bills, but that's a basic problem in any business that sells a package of services provided by other businesses (especially in a regulated environment). The provider can raise prices and simply expect the retailer/combiner to "pass them on", because the provider isn't going to hear any more of the howls of consumer outrage than it wants to.
Some businesses some of the time -- notably in the health care industry -- have tried supplying an itemized bill, with information about price changes they pay, showing that, for example, the drug company has doubled the price on an old drug or the hospital has a system of minimum charges that most insurance companies refuse to pay. Others do something similar with the cost of regulations. It's not clear that this actually makes the consumer like the retailer any more, or complain any less.
The one thing that never works is to tell the consumer that "there are (unspecified) rising costs and we're doing our best to contain them." MediaCom needs to think about how specific they can make their message and how much they can let the consumer in on what's really going on.
clrmoney
3/24/2016 11:40:16 AM
User Rank Platinum
Mediacom Programming Cost
I think he should get over having to pay more for programming cost because everything is going up as we go into the future and information technology increases.
Re: Mediacom Programming Cost
It's how much they are going up that he's complaining about. They go up every year, but then again so does my cable bill. Mediacom used to be public and it was always worth listening to the earnings calls because Commisso would say something that was very blunt.
faryl
3/24/2016 1:00:50 PM
User Rank Platinum
Re: Classic problem in PR
Yup. I think it's a bit unlikely that end consumers are going to have much sympathy for MediaCom's rising costs.
As Mike said, end-user costs keep going up too.
And we consumers generally care more about what the impact is to our wallets than to the profit of some company!
Re: Mediacom Programming Cost
Ultimately companies have to pass those cost increases on to consumers, which drives up the price of the service and spurs more cord cutting. Commisso noted that Mediacom has lost about 45 percent of its initial video subscriber base. He says the comany continues to be profitable by launching broadband, aggressively pursuing business services, and adding phone service.
dmendyk
3/24/2016 3:16:48 PM
User Rank Platinum
Speaking out
It's good to hear from Rocco -- definitely someone who knows the business he's in and is up front with his POV (in other words, the opposite of most CEOs). That said, it's beyond time for video service providers to shed the role of passive middleman and attack the cost issue aggressively. Some of the skinny bundles are a start, but even those are gamed to appeal to a very limited subset of subscribers.
elizabethv
3/25/2016 7:07:13 AM
User Rank Platinum
Re: Classic problem in PR
But I think that's the point - realistically, the business does have to make a profit to survive. And I'm as anti-corporation, anti-CEO as they come. But I do understand if the business isn't making a profit, it doesn't exist. And while initially, when a customer was paying $23 for service, the actual cost was only $4.50. Now, even though the average price to the consumer as increased 3-fold, the average cost of the service to the company has increased 10-fold. Those numbers don't compute. And the problem is it's the cost of paying the people who are relinquishing the rights to the cable company. And while Rosso admits it's the fault of the cable company, I don't know that's entirely the case. Either way, there is a real problem that exists, that affects the largest portion of our society. And the FCC seems wont to address it at all.
faryl
3/25/2016 12:37:07 PM
User Rank Platinum
Re: Classic problem in PR
Agreed. I don't disagree with what Rosso is saying - but I do think that there is an issue getting overall public support/sympathy.
The average consumer doesn't think about what's behind the costs; they just care about how it hits their wallet.
vnewman
3/25/2016 4:07:47 PM
User Rank Platinum
Re: Classic problem in PR
Whether you agree with him or not, Rocco has a strong financial backgroud so his position and opinions make more sense when you think of it in that framework.
I think you can liken the situation to how people feel about paying school taxes when you have no children.
Re: Classic problem in PR
He made those remarks at a cable event, so he's preaching to the choir, but in his case he probably would say the same things to a mainstream news outlet. Programmers aren't going to give their content away, especailly if they have web portals of their own, but at some point smaller cable operators are going to start to bail on video services. Cable One and Suddenlink decided to forgo Viacom's programming.
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