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.
Keeping calm
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.”
