“Don't Screw It Up”
CEO of Cox Communications has some parting advice
By John M. Higgins -- Broadcasting & Cable, 12/18/2005 7:00:00 PM
The cable-TV industry is undergoing a metamorphosis now—fueled by video-on-demand, TiVos, iPods, Internet TV and an army of competitors. Some apprehensive executives don't know how to cope. Media execs quietly pray that they can make it to retirement with the value of their stock options intact before technology upends TV's economic models.
That's not Jim Robbins. When he retires as president of Cox Communications Jan. 1, it will be with more regret than relief. Beginning with his early days turning around troubled cable systems, Robbins, 63, has thrived on tough trials, and his career is a blueprint for survival.
“What a horrible time to be leaving,” he says.
Robbins has spent 22 years helping build the company into arguably the most respected cable operator in the U.S. Cox's distinction isn't its size: It's currently the third-largest operator and will slip to fourth after the planned sale of a portfolio of ill-fitting small-town systems.
No, Robbins' legacy can be gleaned from two numbers: 20% and 8%.
The larger number is the average nationwide penetration of Direct Broadcast Satellite (DBS). The smaller is DBS' penetration of markets served by Cox systems. DirecTV and EchoStar have found the customers of other cable operators fairly easy prey. Cox customers, DBS companies have learned, are much harder to steal away.
“Keep your eye on the consumer”
Why are Cox's customers so loyal? The answer behind that lies in Robbins' parting advice to his system executives. He offered it in early December, at a meeting in Cox's Atlanta headquarters of 20 or so general managers. They pranked him by all dressing in the standard Robbins uniform: a blue denim shirt, khakis and—in the winter—a black fleece vest.
Robbins sums up his counsel: “Keep your eye on the consumer. Execute extremely well. Continue to invest in the platform. It's going to continue to serve you very well.”
Sounds mundane. But those are principles Robbins figured out years before fellow operators did, and they have been key to Cox' success. He drove the company to invest in high-quality customer service in the early 1990s, when other operators were too cheap to staff phone centers and focused more on jacking up rates.
Because Robbins invested early to upgrade the cable systems, Cox was the first operator to offer telephone service over existing cable lines, something that's just catching on with other operators and promises to financially transform the cable industry.
The cable platform is why Robbins isn't dreading technological change the way some media executives are. Cable operators have built a pipe with the capacity to allow a number of video, voice and data services and the flexibility to offer future services. DBS can offer lots of video but has difficulty offering interactive, on-demand services and cannot supply telephone. The new video systems being launched by telcos require years and billions of dollars to match cable's offerings.
“Overall, cable is in the catbird seat,” Robbins says. “And Cox is better off than a lot of companies.”
Still, Robbins finds the latest attack by the telcos maddening. Verizon and AT&T (formerly known as SBC) are spooking Wall Street and lenders with plans to rewire their phone systems and take on cable. It's a counterattack to cable's successful assault on their residential-telephone business. “It will take the telephone companies a generation to get it together,” Robbins says. “In the meantime, they're going to have to spend a hell of a lot of money. I do not see a sustainable business going forward.”
Robbins had no love for public investors while Cox was a public company. For the past year, he has had to answer to only one shareholder: the Cox family. Parent company Cox Enterprises took the cable operation private a year ago, freeing Robbins from having to satisfy the hordes of analysts, managers and institutional investors.
“There's a lot of young kids that are quantitatively oriented, and they have no sense of how you run a company, what a culture in a company is about, or customer interface,” he complains. “Being private, being able to take the long-term view, running the business the way we think we can run is a real joy.”
In Washington, he's startled by the intensity of the regulatory furor coming out of Congress and the FCC, which is threatening to force systems to sell all channels à la carte or face other measures intended to curb indecency. “Here's a Republican administration giving us more problems than we've had with the most regulatory Democrats that have ever been in office.”
Focused on “QTR”
So why is Robbins leaving? He personally reached a milestone two years ago when he hit two decades in his job. Cox reached a milestone when it went private last December, one decade after going public when it acquired Times Mirror Cable.
But Robbins is primarily focused on what a friend calls “QTR”—“quality time remaining.” At 63, he is healthy and wealthy enough to live life pretty much however he wants to. And he'll be getting away from the grind of running a massive 6 million-subscriber operation, battling competitors and regulators.
But he has also watched leaders of other companies who seem to get stale after years and years on the job. “They stay longer than they should, and they go out under a cloud,” says Robbins, who has homes in Atlanta, Florida and Massachusetts.
He's confident that his replacement, Pat Esser, who rose from local-ad sales to become COO, can serve Cox best. “That's the final measure of an executive: whether his successor does well,” Robbins says.
So Robbins is leaving Esser with two major pieces of advice. The first is to keep close track of the telcos, because they are fierce and rich rivals.
The other piece of advice: “Don't screw it up.”
E-mail comments to jhiggins@reedbusiness.com
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