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The Channel Nepotism

At NextGen Cloud Expo (what is the nextgen cloud?), we were talking about all of the musical chairs in the channel programs in 2015. So many. Maybe you noticed the changes, but more likely you probably noticed the pattern.

The pattern is that a channel executive moves to a new company and he takes his cronies with him. Some look at it as surrounding yourself with people you can trust. I look at it as you surround yourself with Yes Men and insulate yourself from others.

This is like the Yankees hiring a player and he brings a quarter of his old ball club with him, When has that ever happened in sports? It happens occasionally with coaches.

Most of us in the channel wouldn’t mind so much except that by keeping the band together – the nepotism I used in the title – you don’t improve. This band of merry channel men go from company to company — and hardly ever hit a home run.

If the exec does this for comfort, he is doing it wrong! Being comfortable is not how you bring about change — or make a dent in the universe.

Being insulated or surrounded by people beholden to you isn’t how you can listen and get feedback.

It happens again and again. It has happened often this year. I wish it would be different because we could use an A Team of two running some programs in this tumultuous time in telecom.

Tags: channel managers, rant, talent
Related tags: nextgen cloud, channel, yourself, company

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RAD Rant on Channel Marketing – Dec 01, 2015

What Does a Master Agency Look Like? – Oct 27, 2015

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Will You Be in Anaheim Next Week? – Sep 29, 2015

Is the Channel a Reflection of its Execs? – Aug 05, 2015

What Do the Security Hacks Mean for the Channel? – Jun 30, 2015

Europe Invades American Cable – May 21, 2015

Cloud, Channel and TelePacific Podcast – Apr 09, 2015

Is Size Important? – Apr 03, 2015

Channel Manager Training – Mar 20, 2015

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December 9, 2015 , On Rad's Radar

Non-competitive Broadband

The FCC defines broadband at 25 Mbps by 3 Mbps. At that speed, most Americans have one choice: cable!

How funny is it that telcos had DSL in the Lab in the late 1960s and didn’t roll it out until Covad, Northpoint and Rhythms basically forced their hand. They then pushed all 3 into bankruptcy to be the sole high speed Internet providers — except for a smattering of independent ISPs that they would kill off later. Then the ILECs – especially Ma and Pa Bell – basically get their asses kicked by cable – and all but lose the SMB market. Who would have thunk it?

The whole time the Bells were worried about the CLEC industry, they should have been more concerned with better technology to combat DOCSIS 3.0. The CLEC industry at least gave the techs work to do and the Bells wholesale revenue (many times that revenue was more than retail). The Bells should have welcomed the wholesale – as both the ILEC and CLEC had cable to battle.

I know Ma and Pa Bell think that cellular is their answer, but that pie is flat. How much more can they ring out of it except for the IoT income stream? Meanwhile they lost millions of residential and small business customers.

Both have whopping huge debt and need a new revenue stream. VZ bought AOL thinking that might be mobile video and ad revenue, although I have to wonder how much more ARPU they can ring out of their customers. People aren’t cord cutting because they don’t watch TV. They are cord cutting because the ticket price is too high (plus other reasons). The same will eventually happen to VZW and ATTM.

The reason that the counties and cities want to build fiber is because the Duopoly isn’t providing the broadband that businesses need and consumers clamor for. Comcast has data caps just because they can. Google Fiber is able to goose the Duopoly enough to get some PR rolling from the big boys but not enough to see $70 ultra-fast Internet through America. And this is after billions in BIP, BTOP, NTIA, RUS and CAF monies have been spent across the plains.

It makes it hard on Agents too. Cable as the only option means that often the Agent can’t get paid. (Not every cableco has an agent program.)

Likely there will be more programs like Granite Telecom’s Grid, where a CLEC will put in a fat pipe and spread it throughout a business park, strip mall or shopping center. And the agent that finds those opportunities will get paid (or do it herself).

As the price of Gigabit falls to a ridiculous Spectrum price of $1200, it is harder ad harder to make a living on pipes alone. As one CLEC explained, revenue was off from last year mainly due to price compression, not because we aren’t signing deals. Three years ago, what was $680 is now $505. More deals have to be closed just to maintain — not even get ahead.

Everyone is feeling it which is why so many telcos have so many product offerings: Buy something from us please? And will you please also get service ABC too? How about DEF? How about GHJ?

Tags: agents, broadband, cableco, clec, commissions, duopoly, fiber, ilec, Internet
Related tags: cutting because, revenue, because, cable, price, bells

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The Broadband Competition Problem – Sep 23, 2015

Are You Getting Rejected By Cable? – Jun 30, 2014

What Competition? – May 01, 2012

News Tidbits Part 2923 – Nov 30, 2015

FCC Moves on Frontier and the Internet – Sep 14, 2015

The WalMart Effect on the Duopoly – Jun 17, 2015

Cable Will Win – Feb 16, 2015

Why Agents Should Be Pro-Copper – Oct 11, 2013

Beware of Cable – Dec 06, 2012

Usage Based Billing Rant – Jun 18, 2009

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December 8, 2015 , On Rad's Radar

Host.Net CEO Retires

I remember back when it was BroadbandOne, founded in 1996 and mainly sold bandwidth nationally. Then the company bought WV Fiber. Then it became Host.Net with a pretty impressive data center in Boca Raton, Florida. A lot has happened – and now CEO Jeffrey Davis is retiring.

Host.net has acquired assets from a number of companies along the way. According to PeeringDB, Host.net consists of assets from WV Fiber, WebUnited, Expedient Florida, Netrox, Continental Broadband Florida, and Yipes! Florida.

Almost 3 years ago (1/2013), Davis and Novacap, a Canadian private equity firm, acquired Host.Net from the parent company, BroadbandOne and the co-founder, Randy Epstein. In October, “Novacap has purchased the remaining interest in Host.net Inc from a group of shareholders led by Jeffrey Davis, the company’s co-founder and CEO, according to the press release.

Davis is now running Gourmet Garden Cafe & Juices in Ft. Lauderdale as well as CEO of Sanctuary Medical Center in Boca. Sometimes you can escape telecom.

“The BroadbandONE backbone consists of the former WV Fiber network assets which were combined with the Host.net national backbone. Host.net operates as the enterprise and governmental arm of the company, providing colocation, cloud computing, storage, last mile, VoIP and disaster recovery services.” [LinkedIn]

Tags: data center, fiber, mergers
Related tags: jeffrey davis, davis, florida, company, assets, fiber

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Mergers, Acquisitions and Moves – Nov 09, 2015

M&A Rumor Mill – May 04, 2015

The M&A Picks Up Steam – Jan 14, 2015

The Expo News Update – Sep 09, 2014

2 Small Acquisitions – Dec 14, 2012

The Move Into Canada – Nov 24, 2015

Telecom Tidbits (Part 2921) – Oct 20, 2015

3 Big Changes Today – Oct 19, 2015

FCC Moves on Frontier and the Internet – Sep 14, 2015

What’s Up With the Data Center? – Aug 26, 2015

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December 4, 2015 , On Rad's Radar

RAD Rant on Channel Marketing

Voice Over Pete and I did 3 videos for RAD’s Rants last month. This is Rant # 3 where we talk about channel marketing tactics – email, website, video.

It is about giving value first. We talk about that as well.

Note:

If you can’t see this video, you can click here.

Tags: channel partners, marketing, podcast, rant
Related tags: channel marketing

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A View of UC from Broadvoice – Sep 24, 2015

A Cloud View from AVANT – Aug 19, 2015

Cloud, Channel and TelePacific Podcast – Apr 09, 2015

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3 Reasons Channel Management Needs a Slap – Oct 31, 2014

A Chat with IPR’s Channel Chief – Sep 22, 2014

Info You Need That I Didn’t Blog About – Aug 14, 2013

Tough Talk About the Channel – VARs and Agents – Oct 31, 2012

Why Do Agents Need Marketing? – Oct 09, 2012

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December 1, 2015 , On Rad's Radar

The Butterfly Effect of Cord Cutting

Cord cutting is real. It is affecting more than just the cablecos.

The cablecos realize that they have to switch to broadband, voice and other product lines to counter the revenue loss from TV. CableOne CEO, Tom Might, gave a presentation at Wells Fargo that follows a speech he gave a year prior.

Cable – typically residential TV – has turned to broadband and voice for extra revenue and then it turned to the small business market with the same triple play bundle. TV for any lobby plus voice and broadband has captured a large chunk of the marketplace.

Cablecos have invested in smart home security and Ethernet for businesses. There is even some interest in cellular for a Quad play. These are the emerging revenue streams for cablecos – at the expense of the incumbents.

Content providers are feeling the disruption too- in a couple of ways.

More OTT choices for the consumer means that the Big 4 networks – ABC, CBS, Comcast/NBC and Fox – don’t command the audience or eyeballs they once did. That hits their pocketbook big time.

Content producers now have HBO, SyFy, Starz, Showtime, Netflix, Hulu, Amazon and YouTube to distribute their shows. Consumers have too many choices!!! In one generation – 40 years ago when I was a kid – we had 4 channels with rabbit ear antennas. Now, unlimited channels across the Internet – legally and illegally.

Then there are the cord cutters, who MSOs only recently acknowledged. Now we have slimmer TV packages from DISH/Sling, Boingo, Verizon, and cablecos. These slimmer packages mean that some channels are making less money. ESPN is the best example.

ESPN is owned by ABC/Disney. It has a stranglehold on TV distributors. Commanding not just $6-$8 per subscriber, but that the package has to include all 7 ESPN stations — even on cable systems that cannot supply 500 channels. [The Big 6 do the same thing — bundle crappy channels with the one everyone wants with stupid clauses and restrictions. That’s right just 6 companies control 90% – and less than 300 people control what you can watch.]

DSLR writes, “According to recent company filings, ESPN’s subscriber rolls peaked at 99 million in 2013, but in just two years have dropped by roughly 7 million users to 92 million.” At $6 per subscriber per month – $42M per month is $500M per year. And that is just subscriber revenue — ad revenue will be adversely affected by this subscriber decline too. It spins down fast. Gravity takes over.

Then look at the content owners. The NFL commands $6B per year from networks, including $1.6B per year from ESPN for Monday Night Football.

Cord cutters make me laugh when they demand that the content be available without cable. How exactly would that work?

The channels (like ESPN) have the distributors (like cable) by the balls. ESPN is suing Verizon over the way it packages ESPN now. VZ broke the conditions of the carriage contract. Who will break first – the channels or the distributors?

CBS is selling its channel access for $6 per month. Even though you can get CBS with a TV antenna in most cities. [Many viewers will tell you that they miss their DVR and recording shows. You pay CBS for on-demand access.]

ESPN has to worry that if they wait too long, the NFL follows the MLB and goes straight to viewers and that $2B per year becomes part of a bankruptcy battle.

It is all disrupting. Just like the music industry. Just like the newspaper industry.

In the end, people will pay for (1) convenience and (2) user experience. Excel at one or the other.

Tags: cable, cableco, ott, tv, TV
Related tags: broadband voice, channels, subscriber, revenue, cablecos, cable