Former Foe Turns Friendly
Wilson is the man cable networks want to know
By John M. Higgins -- Broadcasting & Cable, 5/8/2005 8:00:00 PM
As head of programming for cable giant Cox Communications, Bob Wilson has many friends in the industry—and many cable networks that want to be his friend.
As Cox is the fourth-largest cable operator, cable networks looking for carriage come to Wilson. But the company's senior VP of programming wasn't always such a pillar of the cable community. In fact, he was once the enemy.
Early in his career, Wilson headed up the operations of one of the great annoyances of any cable operator: an overbuilder. Overbuilders dare to compete in the same markets as entrenched cable operators, despite expensive price wars. During the 1980s, Wilson was director of operations for ODC Communications, the TV subsidiary of the nation's fifth-largest apartment developer. ODC wired apartment complexes for video via satellite, trying to cut the local cable system out of a lucrative part of their markets.
Wilson acknowledges that this past job is a deep, dark professional secret. Working for ODC was a “very ill-informed decision on my part,” he says, laughing. But colleagues at Cox “don't hold it against me.”
Apparently not. Today, Wilson is the top executive in charge of perhaps the most important and expensive element of Cox's business: programming. As the chief negotiator with cable networks, he faces the task of securing the best possible terms for its 6 million cable subscribers. That means not simply whittling down per-subscriber license fees but also getting the flexibility to package networks into tiers or video-on-demand.
That can be tough. Cable networks thrive on license fees and carriage to the widest possible number of subscribers. And new networks—some of them from big conglomerates with clout—are always knocking on Wilson's door in search of slots on Cox's systems.
But programming has already ballooned to account for 30% of Cox's operating expenses. DBS competition and subscriber resentment make it increasingly hard to raise bills each year, especially for programming that only a small slice of customers watch.
And for all the tension between operators and programmers, Wilson's approach is to keep things calm. “I don't think the senior vice president of programming gets any points for roughing up the programmers,” says Ajit Dalvi, Wilson's former boss at Cox, who still consults for the operator. “Bob's personality is perfect for this.”
“It's about striking the right balance between what the customer wants and what the network needs,” Wilson says. Cox strives to put programming into tiers that subscribers pay for only if they actually want to watch. Unfortunately, “the business model that works for all programmers is: All subscribers get all the programming.”
Cox is adding virtually no basic networks. Channels willing to go on digital tiers have a shot, as do niche networks willing to live as pay or video-on-demand services. Cox recently signed deals with gay premium network Here TV and with a new service from World Wrestling Entertainment.
Network executives often complain that cable executives don't watch enough television, and Wilson admits he could watch more. “I just can't get into series,” he says. “Don't have the time.
He doesn't TiVo any sitcoms or dramas, though he does occasionally record Letterman and The Daily Show. He confesses that he is amused by Spike TV's Japanese oddity, Most Extreme Elimination Challenge. And he watches American Idol and Survivor with his kids.
A cable novice
Wilson knew nothing about cable when he joined Cox in 1979. Raised in Maryland, he went to grad school at Georgia State University in order to be with his college girlfriend. Wilson scheduled a meeting with a Cox recruiter looking for freshly minted MBAs, and he was hired.
Initially, Wilson was part of that small unit that figured out how to build new cable systems. The early 1980s were the go-go days for cable franchising. Cable had long been a rural business, but companies started rushing to build systems in cities and suburbs.
Wilson's group figured out what it would take to build the system. Wilson worked up plans for cities including New Orleans, Fort Wayne, Ind., and Cedar Rapids, Iowa.
Wilson learned so much that he was tapped by ODC to become director of operations, bringing him back home to Maryland. But the apartment-cable business—dubbed SMATV for “satellite master-antenna TV”—was difficult. And ODC's parent company, Oxford Development, got into other financial trouble and sold the 24,000-subscriber SMATV operation for $20 million in 1989.
Fortunately, ODC didn't compete against any Cox systems, and Wilson's relations at Cox's Atlanta headquarters were still good. Dalvi, then head of both programming and marketing, took Wilson back in. He moved up and took charge when Dalvi left Cox in 1989.
Wilson's department administers existing contracts—for example, making sure networks get paid what they're owed and programmers are providing promised marketing support.
But the difficult part comes when a programmer's contract—typically running five years—comes up for renewal. Operators' push to control costs has led to unprecedented tension between networks and systems, particularly over high-priced sports networks.
Wilson notes that “you can count on one hand” the number of major fights Cox has gotten into with programmers over the past several years. Nevertheless, he says, “We hate that.”
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