Interview Date: July 18, 2006
Interviewer: Steve Nelson
Panelists: Lucille Larkin and Trygve Myhren
Abstract
Trygve Myhren and Lucille Larkin discuss their involvement with CTAM. They clarify the issues of competition and cooperation within the cable industry; early marketing activities; and the surge in programming from satellite transmission. They comment on the work of Greg Liptak and Gail Sermersheim; growth of the industry; and Larkin’s role as executive director of CTAM. She explains selling the concept of marketing to CEO’s; issues around pay retention; and CTAM as a model organization. They describe the conferences, the importance of clustering, and how CTAM brought diverse industry figures together. Myrhen concludes by summarizing the organization’s success with stimulating new programming, promoting customer service, and dealing with regulatory issues. They also name people important to the mission of CTAM.
Interview Transcript
STEVE NELSON: Let’s just start and we’ll talk a little bit about what your backgrounds were coming into the cable business. Trygve, where did you come from? Even before cable?
TRYGVE MYHREN: Before cable… well, actually I had a marketing background. I went to Dartmouth and Amos Tuck School where I majored in marketing at Amos Tuck and got my MBA and then went into the Navy as an officer for a period of time and eventually was at Proctor & Gamble, and got a heck of a marketing background there. Then I went off with a company that two other people and I started which did a lot of marketing consulting, and we did work for people like General Motors and Coke, Time, Inc. which came into my life later in the cable business, but also was involved just before coming into the cable business with a company called CRM on the west coast, and we were a publisher of magazines, we were an educational publisher of books, and we made educational films. So that was the background coming into the industry. That marketing background was very important both in terms of my involvement with CTAM and in terms of what the industry needed at the time.
NELSON: And how about your first cable job? What was your entry point?
MYHREN: Well, I came in as Vice-President of Marketing at American Television and Communications in 1975, in May, and eventually took on programming and went through the rungs of Senior VP and Executive VP and President, and then eventually in late 1980 I became Chairman and CEO of American Television.
NELSON: Worked your way up through the ranks from a marketing position.
MYHREN: From a marketing position.
NELSON: Unusual in those days.
MYHREN: Yeah, and my involvement in CTAM I think was very helpful, frankly, in getting me there, and there are others in the industry who made progress because they understood the power of marketing and moved ahead even though there were not many people when I started in ’75 who understood the importance of marketing to the industry.
NELSON: And Lucille – we’ll come back to CTAM, obviously, that’s a separate conversation – but just give us a little bit about your background.
LUCILLE LARKIN: I came to Washington and was a reporter with Time Life Broadcast, so it covered the White House when I was just a kid, and then I worked for Time Magazine for quite awhile before going into public relations, and out of Hill and Knowlton I was hired as the Vice-President for Public Affairs for the National Cable Television Association, so marketing is not my background. Public relations really was what my forte was, but it was a magic time to go into the cable television business. I think I came in in 1978.
NELSON: Okay, so he preceded you.
LARKIN: He did.
NELSON: So when you came in, what was your involvement with CTAM when you first became involved with the industry?
MYHREN: I came in May of ’75, about one month after HBO had gone up on satellite and that was… well, actually, no, it was before HBO went up on satellite, which was in September. But the announcement had been made the month before that this was going to happen and it was an interesting time because people began to say, well, gee, what do we do with this new product and how do we market it? Are people even going to like it? Is it going to give this industry some strength, some momentum? A lot of questions. Is the satellite even going to work? Those kinds of questions.
NELSON: Start with that one, right?
MYHREN: This was real pioneering stuff, and people like Gail Sermersheim and Greg Liptak who had been in the industry for a period of time were saying, we’ve got to start sharing some ideas. The industry was interesting in the sense that it was not competitive in the traditional sense. Different people had different franchises in different markets. You might compete to get a franchise, but you weren’t competing on a day-to-day business basis.
LARKIN: That’s right.
MYHREN: So there was an opportunity for cooperation, which a lot of people didn’t quite understand, but people like Greg and Gail understood it and they decided that it would be a good idea to pull people together and start talking about the questions that surrounded this pay television entry. Having looked at my background, because you know these things are announced when one comes into the industry as an officer, at least in those days that was a pretty big deal in the industry, and they said, gee, “There’s a guy with a marketing background. Let’s get him to the meeting too.”
NELSON: And there weren’t too many of you.
MYHREN: There were very few people of marketing backgrounds, but there were people with marketing sensitivities. In that first meeting that they pulled together there were a number of people in the industry – the Tom Johnsons and the Ernie Olsens and the Bill Bresnans and the Chuck Dolans and so on – who may not have had really long pedigrees in marketing, but they knew what they wanted to do and they had marketing sensitivity.
NELSON: This was the famous…
MYHREN: The famous Chicago meeting.
NELSON: The airport meeting.
MYHREN: So, in any event, to your question they asked me would I come to the meeting?
NELSON: And you did.
MYHREN: Yeah, and it was a hell of a meeting. It was a lot of fun. I saw that there were a lot of smart people in the industry, and people who were excited and wanted to work hard. It was an eye-opener for me.
NELSON: Being so new to the industry.
MYHREN: Being absolutely new to the industry, but it was also obvious to me that people didn’t understand a lot about traditional marketing and some of the techniques that might be used.
NELSON: Okay. So how did we move from this meeting in the airport to CTAM starting to become something?
MYHREN: Well, through I think a number of things – a lot of hard work on the part of a lot of people; pretty good organizational skills that people like Gail and Greg brought to this thing; a need!
LARKIN: I was just going to say, I think the need is what spurred it all. They were scared, practically. The satellite started raining programming down; nobody had a clue! We had ABC, NBC, CBS and now we have 12 channels. In fact, I have to tell the story, we asked at one point… of course, Ted Turner was what? The third on the satellite or something like that? And he was trying to force people to put his television station on and we were having an interview like this one day, and I said, “How can you be pushing your colleagues so hard when they’ve got 12 channels and they’re all filled up?” And in typical Ted fashion he said, “Well, if I had 12 wives and Bo Derek came along…”
LAUGHTER
MYHREN: I do remember that.
NELSON: Well, that was certainly Ted. So he saw this satellite as a “10”. A Bo Derek.
MYHREN: And it was a 10 because it created efficiencies in distribution of programming, economic efficiencies which were outstanding, and it allowed you all of the sudden to get your programming to a lot of places assuming the cable operator would buy the receptive equipment.
NELSON: But were you sensing at that time that it would be such a profound impact? Okay, we’re going to get this pay television channel that’s going to come down by satellite but…
MYHREN: The honest answer is we didn’t know for sure.
LARKIN: That’s what I was thinking today.
NELSON: We can be honest here. That’s okay.
MYHREN: A lot of what we did in those days we weren’t sure of, and that’s why I’m frankly proud of the group of people that did this because we didn’t know what the answers were and we didn’t know at all that we were going to be right, and we didn’t know at all that we weren’t going to screw things up real badly and put companies out of business and so on.
LARKIN: That’s right.
MYHREN: I mean, we didn’t know. But we had a sense that we had a shot at doing something really big.
LARKIN: I found CTAM itself an intensely personal organization filled with people of vision and of enormous generosity. As you mentioned, they weren’t competitive in the marketplace so it was okay to share, but you had to get over that business thing where it was okay to share, and I think Greg and Gail and you and some other people were really… I think particularly of Greg, who seemed to be a person who knew that if he got three or four or ten heads together certainly they were going to come up with a better idea on what to do with this rain of programming. Should you build more channels? Should you try to find a way to buy that programming? Could you sell that programming? Could people in their homes care enough to buy, and if so, how do you package it? Do you tier it? Nobody really knew what to do, and I’m just amazed at what you did. Just amazed at what you did because you were the architects of the cable television industry, not as it is today but as it was in the ’80s because CTAM kept reinventing cable television about every ten years, I think, since then.
MYHREN: And CTAM would reinvent itself, too, as it went along.
LARKIN: That’s right.
MYHREN: It would reinvent the way it worked and what it was really trying to do.
NELSON: How did it do that? Was this just circumstance, or…?
MYHREN: I can remember in ’79… I think I came in as president of CTAM following Gail, as the third president probably in ’78 and then finished up in ’79, and one of the things I did was set up a blue ribbon committee of people who – and I’m trying to remember who it was… it was Tom Johnson, Tony Cox, there was one other person on there and myself – a blue ribbon committee to look at the structure of the organization, and obviously kept in touch with both Gail and Greg about what we were thinking. That was not untypical. That was done over and over through the years. The idea of bringing Lucille on as a part-time executive director was we can afford so much; we’ve got to afford so much because the task is becoming overwhelming. You had 49 people at the Chicago do. By the time we ran the thing in ’79, we had 240 people; that was the annual seminar.
LARKIN: It was done all with volunteer…
MYHREN: All volunteer work. And there were 600 the next year in ’80. So it was growing like top seed, people were beginning to understand that this was critically important if the industry was going to grow and if it ever had to compete, and all of those things. You had an awful lot of people working awfully hard, but we needed help.
NELSON: So at the time of your presidency, I mean you had a full-time job, this was just a volunteer occasional kind of meeting and whatever?
MYHREN: That’s right. I did not give up my day job.
LAUGHTER
NELSON: Yes, yes.
MYHREN: But there were those who said maybe I was giving it up!
LAUGHTER
NELSON: So you had this nascent organization, you have your big annual meeting and you’ve got a hundred people there, and then you have 200 people there. So now you start to see that growth and say, hey, somebody’s got to spend some time working on this. We all have jobs, Greg, I’m not going to do it. Now how did you discover Lucille?
MYHREN: I’m trying to remember how we found you.
LARKIN: Well, Gail and I were friends, and I had started Larkin and Company and a division of Larkin and Company ran Women in Cable so we had already an organizational management operation going…
NELSON: But you weren’t in cable, you were just in Women and Cable – is that right?
LARKIN: I was never in cable as an industry. I was in the association part of cable all the way along – trade association and then the professional associations. Women in Cable is actually a professional association, so it suited. We had all the processes in order to do the membership, to do the newsletters, to do the conferences. We never did the programming because – this is what I think is the magic still of CTAM – the people who are the members of CTAM are the people who make CTAM work. They were the ones that did the programming, they were the ones that sat on the panels, they were the ones that planned it, we did the logistics for them and we had a lot of fun doing it because as hard as they worked, that’s as hard as they played.
MYHREN: That is the truth. When Lucille says programming she’s not talking about programming like C-SPAN or CNN.
NELSON: No, no, at the events.
LARKIN: Conference programming.
MYHREN: Yes, what are the topics going to be and so on.
NELSON: Right, exactly. What are the sessions?
MYHREN: Yeah, yeah.
NELSON: But that takes a particular professional skill to know how and have the tools to run an organization, an association, as opposed to being a marketer or being a cable television engineer or something like that. It’s just a different…
LARKIN: And I felt quite good being involved with these people because I enjoy making people welcome, and I will say that CTAM then and now makes people feel very welcome when they come and so they are readily able to participate, they’re able to give generously as the very first CTAMers did.
NELSON: Just harking back for a moment to Women in Cable, how many people were in that organization at the time? How many women could there have been in cable?
LARKIN: They were coming in to the industry in exponential numbers, both women and men, exponential numbers. I think Bill Daniels said at one point we were hiring 2,000 people a month in the industry.
NELSON: And this was ’78?
LARKIN: ’79, ’80, ’81, would you say?
NELSON: So this is a really rapid growth period.
MYHREN: Yeah, you have to understand that up until that point, up until ’75 when there was the September launch of Home Box Office, which went to Florida with UA Columbia, and to Jackson, Mississippi with our ATC system, there was no reason to hire a lot of people because we couldn’t get out of the small towns, the rural areas. We didn’t have a product to offer that would appeal to someone in an urban area.
NELSON: You were just the reception service.
MYHREN: Now all of the sudden you had Home Box Office, but then things followed along after that. WTCG, Atlanta, became the Super Station, Ted Turner. There were a series… and then there was Madison Square Garden Network; C-SPAN was set up with cable operator money in Washington; you had CBN, which was Christian Broadcasting Network; you had News Time, which I think – I’m trying to remember now – was Westinghouse, actually came out of TelePrompTer/Westinghouse but then died off; and you had CNN, eventually.
LARKIN: I remember the first one – “Give me 27 minutes, we’ll give you the world”.
MYHREN: Exactly. There was a proliferation, as Lucille said earlier. Programming started raining down.
LARKIN: It just showered.
MYHREN: So now you’re in a position where you can offer people something that might make them sign up in an urban area. Maybe not the biggest of cities at the beginning because they had so much programming available over-the-air, and so many other entertainment options, but it came along. It came along pretty quickly and you needed to hire people, and you needed people with some marketing skills and some programming skills, and people who knew how to sell programming and the industry really didn’t have that so we had to start doing something about that, and that was one of CTAM’s jobs was to get that going. Train people, not only to recommend people to hire, but to take people who were good, smart people who had a sensitivity to those things and train them.
NELSON: Take them to a higher level.
MYHREN: Take them to a higher level. And CTAM tried to do that through its sessions, not just at the annual seminar but there were training conferences that CTAM began to run around the country training on how to think about programming, how to market it to consumers…
NELSON: There was a lot to consider.
MYHREN: There’s a lot to consider.
NELSON: But looking at CTAM in this time period when you got there, what were challenges that you felt that you faced in being able to be the executive director?
LARKIN: To pull the organization together.
NELSON: Was it just very amorphous?
LARKIN: It needed very rudimentary things such as membership lists; it needed some regular communication to go out; it needed to have board of directors meetings organized for them. At the time it was pretty interesting both for Women and Cable and for CTAM, some of the CEOs needed to be convinced that they needed to allocate travel money for travel purposes for CTAM people, and that was a bit of a hurdle to go over. I often say that we did have enough fun at those meetings that the CEOs started to come to our meetings and then we became the CEOs.
MYHREN: As they say at some of the meetings, they bare it all!
LARKIN: That’s right.
LAUGHTER
NELSON: Well, we won’t touch that.
MYHREN: There were headlines to that effect as a matter of fact.
NELSON: Yes, yes, we’ve skirted around this issue and we’ll continue to do so.
MYHREN: I think Lucille has touched on something here which was critical. It was very difficult to get money to send people to conferences for marketing and so on. It was very difficult to do a lot of things in the industry that really were customer sensitive, marketing sensitive, promotion sensitive, public relations sensitive. The industry just wasn’t that. The industry, people who really pulled the strings in the industry were financial people, engineering people, and financial people who were nuts and bolts financial people but also real financiers, and they just didn’t see this stuff. They didn’t see the importance.
LARKIN: They didn’t.
MYHREN: They didn’t understand that… I can remember having an argument with a key person in my company – not the CEO, interestingly enough, but another person who was a very strong operations person – and his saying you could spend 2 million dollars a month in that market in advertising and promotion and you won’t get one more customer. The customers come on as the customers want to come on. That was the argument, and a lot of people believed that or close to that. So it was very difficult to get money, and one of the key tasks of CTAM was to interest the operational people in starting to think about these things because all the members of CTAM, the key people who had started it, were all convinced that unless we got over that hurdle we’d never get anywhere, and when we faced competition we’d be a disaster, and on and on.
NELSON: Well, that’s certainly an interesting attitude about the 2 million bucks and no new customers. What other industry could they cite where marketing was completely useless?
MYHREN: Well, that was partly my answer. As you can imagine, I did have some answers.
NELSON: I would think so. I would think so.
MYHREN: But the point is that answers don’t necessarily convince somebody and it took a heap of convincing in all of the companies around the industry to spend money on marketing, on training of people, and interestingly enough, one of the things that happened during the period that I was president was that we set up a conference on back office systems because we had very rudimentary systems for accounting with customers. The whole back office of a customer operation today on the internet, you understand that that’s the guts of what you’ve got, but people didn’t understand that then. But we knew that computers were getting better. As we talk about this today in 2006, you can’t imagine how rudimentary these things were back then.
NELSON: That’s why we’re trying to get that feeling.
MYHREN: Right. But it was, it was really, looked at from today, just dark ages.
LARKIN: Well, we weren’t very far past the pole climbers, the mom-and-pop shops which was the genesis of cable when it was a cable television antenna service.
MYHREN: That’s right. And those are smart people, too.
LARKIN: They were very good people and some of them became heads of big companies.
MYHREN: They were gutsy and they became heads of big companies. They were smart people, good people, and they had made things happen, but they just didn’t have this experience in their life.
LARKIN: But I’m interested in what you just said a little while ago that I find true, and maybe you remember this story better than I do, but you were saying that the industry was basically run by engineers and money people. So you have the folks that do things and own the systems, and you have the folks that build things or the pole climbers. They had no clue how to relate to a marketing person. Remember, they used to say that the engineer would come in with his short sleeves and his slide rule in his Volkswagen Bug and then you guys would come sliding in your Beamers with tight jeans and a hat.
NELSON: Sounds like a clash of cultures.
LARKIN: It was!
MYHREN: That’s why I never had a Beamer. It wasn’t the right way to convince them. But the fact is, you’re right, and that was the environment that you had and part of CTAM’s task was to break through that. So we invited operating people. When we say financial people and engineering people, we’re also talking about people who styled themselves as operating people, and they’d had experience in the business operating. That is managing a system. They might not have been particularly good engineers, they had an engineer, and they might have had somebody who kept the numbers. So they were just sort of administrative types and some of them were very, very good at that. But once again, they didn’t have the marketing experience so we had to get them in and involved. As Lucille said earlier, there was a need there so it began to get through. But also, we, at conferences, would invite a lot of people and at this particular conference in San Francisco in ’79… well, actually we started off in the summer of ’79 with a seminar where we talked about advertising and we talked about back office systems a bit as it tied to customer service and how important that was. Then we took sort of a new direction for CTAM, which was a management conference. Now to a management conference you can invite managers, right? They don’t have to be marketing managers. So we invited a lot of managers, and we invited financial people and engineering people and general managers and got them out to San Francisco and set up most of a hotel with rooms which displayed the various back office systems and then had general sessions to talk about them. So people could go in, spend time viewing that system, talking about how it worked or didn’t work, what its shortfalls were as well as its advantages, and then go into a general session and talk about it. We got a lot of general management people to that and the point was that if you understood all the information on the consumer when the consumer called you, or you called the consumer, you’d have a much more fruitful call and you could solve their problem, or you could sell them or you could do whatever.
LARKIN: So you see what I mean when I say that CTAM and the CTAMers really were the architects of how this industry looked.
NELSON: Talk more about the management people because this was a struggle to get across to other people about marketing.
MYHREN: It was a struggle and I think you could talk to anyone in the CTAM organization and they were just fighting like crazy in their own companies to try to get operating people to pay attention.
NELSON: Could you give me an anecdote or some moment you recall when you thought, well, maybe I’m really breaking through here.
MYHREN: Well, yeah, I’ll give you one. When we introduced Home Box Office, which was shortly after I came into the industry, and I had to get up to speed quickly because I came in in May, this was September of ’75…
NELSON: You had the summer.
MYHREN: We introduced it at… what did we charge for it? We charged $6.95 in Jackson, Mississippi and we achieved about 15% penetration with it, and it was very interesting. We did a lot of public relations around the opening of it and so on. I remember TelePrompTer then came out and was going to introduce a system not too long after that, and they decided to go at $9.95, and I convinced the people in our company we were going to go at $4.95 in Rochester, NY. I said we will more than double what they do in terms of customer penetration, and then we can raise the price later, right? Typical marketing.
NELSON: Get ’em on board.
MYHREN: Let’s get ’em on board, let’s get them to understand the value of the product, sort of like product sampling and let’s see what happens, and we did that. In fact, I think we might have tripled the penetration that TelePrompTer got.
NELSON: I hate to ask this question – did you test this price in some way or other as one might – $4.95, $6.95, $9.95?
MYHREN: Well, we were creating a test because what we had was we had TelePrompTer at $9.95 over there, we’d already been at $6.95, and we just about doubled in Rochester what we had done in Jackson at the $6.95 price. So $7 versus $5 or slightly under $5, and then you had TelePrompTer basically at $10. So we were using other people to help us test as well. There’s always the thought that well, maybe they don’t market the same way we do and so there are a lot of variables that we didn’t have nailed down. In rough numbers it was pretty obvious what was going on here. That kind of thing in our company, people looked at that – because a lot of people had argued with me about it and I prevailed – and that really caused a lot of people to say maybe he does know something. Maybe marketing people aren’t all stupid, and maybe the guy who’d made the 2 million bucks argument I think went home and said, hmm.
LARKIN: But you took a risk.
MYHREN: Well, sure. Everybody was taking risks all the time in the business at that point.
NELSON: That’s all there was, right?
MYHREN: Yeah, it as all risk, right.
NELSON: Do you remember a time, particularly, at CTAM – because now you’re in the midst of this whole issue of trying to get across the virtues of marketing – do you remember a time where you felt that maybe the message was getting through?
LARKIN: I can’t pinpoint a specific time going back that far because the CEOs would fall one at a time, wouldn’t you agree? One would get convinced that it was going to work and then they would kind of… they were a good old’ boys club, too. So if Trygve convinced Monty Rifkin and Monty Rifkin could convince somebody else and somebody else would talk to somebody else, and then Bill Daniels would come in and say it was all my idea and I knew these guys were all right in the beginning.
NELSON: Well, it put the seal of approval on it.
MYHREN: Although one thing about Bill Daniels, interestingly enough, is that he did have a great marketing and promotion and public relations sensitivity.
LARKIN: Yes he did. Very big sense of that.
MYHREN: Well beyond the average cable operator.
LARKIN: And I was teasing when I said that anyway. I have a lot of respect for him, and he loved CTAM.
MYHREN: He did love CTAM. But you’re right, I think you’re absolutely right that it was sort of a daisy chain type of thing and you could get one person convinced and they would help you convince the next person.
NELSON: This is what we now call viral marketing, right?
MYHREN: Yeah, yeah.
NELSON: We didn’t know it at the time.
MYHREN: It was our own little version.
LARKIN: Well, one of the other ways that it happened is that Trygve and Gail and Greg, when they were putting these programs together, they featured some of these CEOs. If you rub shoulders with somebody, it’s a lot easier to understand what they’re talking about. So they were no longer sitting up here waiting to be convinced; they were kind of listening to these people talk to each other and understanding that they had had successes and failures – there’s no doubt about that too – but they were so honest with what they were doing and they had such vision with what they doing, I think that your asking them to participate was a real step in the right direction for getting them to start believe that they needed to listen up to marketing. That marketing people really were visionaries to some degree and they were willing to put their neck in the noose and see if it was going to work.
MYHREN: By the time that ’79 conference I mentioned in San Francisco – which was a management conference, not the annual seminar – came along, I think I went back and looked at this recently, Monty Rifkin… who was my boss, was the founder and chairman of American Television and also happens to be my daughter’s father-in-law at this point… but in any event, Monty who was not a guy who was big on going out and rounding up people and doing lots of cooperative ventures, and was not a great believer in marketing – but he had hired me – he was willing to run the first major panel at that particular meeting, and that meant something to other people in the industry, as Lucille said.
LARKIN: It did.
MYHREN: And so we got a couple of other people to come in and run panels like this.
LARKIN: He was a hard-sell on things like that.
MYHREN: He was, but he came and ran the panel and others showed up, and they ran panels. Now they’re involved.
NELSON: They’re now spreading the word.
MYHREN: They have to sit there on the panel, moderating the panel, listening to these people say all these convincing things about marketing and about back office systems and so on.
NELSON: I want to just come back for a moment to your $4.95 HBO offer. Did you find later – because I know there was a period later where there were issues over pay retention. Did you run into that, or how soon did you run into that because you talked about you were going to raise the price later?
MYHREN: Well, the thought was that when we raised the price that we would have terrific roll-off, they called it, I think was the original word. But we didn’t.
NELSON: You didn’t.
MYHREN: We had some, but where there was some there was some people dropping off no matter what you priced it at, but if you came in at $9.95 presumably you should hold more of those people, right?
NELSON: Right.
MYHREN: But some of them dropped off, too. Not at as great a rate, but the key when you do that kind of a measurement is if I got 100 people at $4.95 and you get 30 people at $10.95 and I lose 20% of them and you lose 5% of yours, I think I’m pretty far ahead. And I’m saying once I raise my price if I lose 20% of them.
NELSON: Yes, right, right.
MYHREN: So there was a lot of that and with a consumer product you always have to look at what different price points do to you and you should do a lot of testing. We had an opportunity to watch… and one of the great things about CTAM was we’d come into these meetings as the years went by – okay, I ran Rochester at $4.95, I ran Jackson at $6.95 and I ran Honolulu at whatever it was and so on, and somebody else would say I ran these, here are the marketing tactics we used going into those markets, here’s the kind of retention devices we tried to put in place, and how did it all work? And then you go back and you look at the demographics in that market, and you also knew what the actual cable penetration was, so you were looking at not only the percentage of cable subscribers who took pay but the percentage of households in the market who took pay. How many people do you think you got to sign up for cable by using pay as the device? Well, if you have a lower price for pay that’s a good idea, right? You’re going to get more people to sign up for cable. So we went through all of these kinds of calculations and comparisons and CTAM was an organization that could do that.
NELSON: Right, because that was the remarkable thing that you could get together and compare all this information, so in a sense the whole industry became a whole series of market trials that everybody else could look at, learn from and move forward more quickly.
MYHREN: Right, exactly.
LARKIN: And at a point, you gave prizes for the best reports on some of the adventures that people were willing to try and put down on paper to see how it worked out. There were – I don’t know how many prizes exactly – but there were papers submitted so that you could actually put these down in addition to panel discussions. There were actually studies done that they would share with one another, and there was a lot of good industry press coverage. CTAM made headlines constantly. Constantly.
NELSON: In the trades.
LARKIN: Um-hmm. That’s where the action was.
NELSON: It always seemed that that was the leading edge in terms of growth.
MYHREN: We were doing the fun stuff.
LARKIN: That’s right!
MYHREN: I should mention that back there in the Denver conference in the summer where we did do some talk about back office systems and we talked about pay tiering and about pay selling and so on, we also got into the advertising business. We invited the ten top advertising agencies in the country to come meet with us, and some people said that’s foolhardy. If one of them shows up you’re going to be really lucky because we were zilch on the national landscape.
NELSON: And you’re asking them to come to Denver?
MYHREN: Yeah, come to Denver, come to Denver in the heat of the summer…
NELSON: Primarily from New York.
MYHREN: Yeah, exactly, from New York, right, primarily. And come to the Marriot Hotel Southeast which was at 1-25 and whatever it was… Hampden. A pretty grungy hotel. And show up and we’re going to have this conference, and the conference was overall pretty interesting but the advertising portions were fascinating because we got the ten top agencies to show up. They sent somebody, and some of them sent some pretty heavy people. We had Pat Weaver there as a speaker, you know, the famous Pat Weaver, who’s daughter is Sigourney, by the way. And Pat came and I had a special connection, which was the Dartmouth connection, with him, and he came and talked and was just terrific. He was a bit of a futurist and that helped because he could talk the talk. He didn’t come in, as many network people did, with a defensive “Well, you guys can maybe accomplish this, and maybe you can get that done but…”
NELSON: That’s it.
MYHREN: Nothing else, right.
NELSON: Mind your place.
MYHREN: Yes, exactly. And he was really expansive and it was great. Then that led to a later conference which we had in… was it in San Francisco? It was at the Western Show which was actually in southern California. We had a seminar which a fellow named Bill Ryan, who was Palmer Communications and was very knowledgeable in advertising and later head of the Cable Advertising Bureau – I mean the president of the Cable Advertising Bureau – and I actually put that conference together, that seminar later in the year at the Western Show, and the ad agencies by that time were really into it. Of course over a period of time this really worked. Primarily, however, the driver, I think, as we went through the years and formed the Cable Advertising Bureau, which came out of all that with Bob Alter and a number of other people who had major roles there from the industry, I think a driver was not just us trying to put advertising on our systems for our locally generated car channel or real estate channel. It was all of these basic cable services coming down which had availabilities and were pretty targeted. One of the disadvantages of cable during all those years was that we had these prescribed municipal boundaries. We were not clustered, which is another issue we should talk about, but an advantage of that was that you could at least make the argument versus the local broadcast station and the newspaper that yeah, we can’t cover the whole market you want but we can go into certain high bucks communities and give you that and you don’t have to buy the rest of it. So we would do that type of thing, and the advertising people, the vanguard of the advertising industry understood that. Most of them said forget these guys, they’re too much trouble to figure out what the advertising is worth…
NELSON: It’s too complex a buy.
MYHREN: By the time they went and presented it to their client – they went to General Motors or Coke or somebody – it was like, come on. So we didn’t make a lot of headway early, but the vanguard of that industry understood there was something here and we built on that over the years. Now, of course, we are… I think most people would much rather be in cable advertising than in network broadcast advertising.
NELSON: Now before we forget, because you had touched on this a moment ago, clustering.
MYHREN: Clustering!
NELSON: We talk about this patchwork, which you made it work to your advantage, but overall that was not an advantage.
MYHREN: Overall it was not a good idea, but it was the way it was because you had to win these franchises at the municipal level. I would say that CTAM drove clustering, which is of course what the industry is all about today. As it turned out, I happened personally to articulate what clustering was and why it was advantageous and a lot of people picked up on that. I got a lot of my impetus…
NELSON: What year was this?
MYHREN: ’79.
NELSON: Just so people know because that’s very early advocating clustering.
MYHREN: Yes, well, it was very early. Nobody was really talking about it, although I would have to say that companies like Cox and Continental both were relatively well clustered.
NELSON: From the get-go. That’s the way they got franchises.
MYHREN: From the get-go. Nobody had articulated why and so on. It was more an accident of the way they were able to get franchises and so on, although the people who ran those companies were very, very bright people. The industry had to understand what clustering was all about and it frankly drove the growth of ATC. We went out and tried to cluster. We tried to get everything near where we had a franchise. Clustering became very important to our company and eventually became very important to the industry. The idea was this: the broadcast station in a major market covers the whole market; the newspaper covers the whole market; the radio stations typically cover the whole market. If you’re going to compete with them for advertising, it’s very difficult to go in to someone and say, well, I can give you this town over here and this town over here. This happens to be a wealthy town over here, and that’s a very poor town over there…
NELSON: But we’ve got ’em.
MYHREN: Yeah, and we’ve got 15% of the market. It’s too much trouble for everybody as a starter, and it also puts you in a position where if you ever get competed with – and we used to actually talk about this in the early ’80s when we were talking clustering, was if you got competed with by anybody, like satellites, they’ve got the whole market again. They can advertise efficiently, you can’t advertise efficiently – you’re going to get killed. So you had to understand this. Clustering also had a lot of other operating advantages. For example, if you had, let’s say… a not untypical situation would be to have four or five systems in individual municipalities within a big urban area, they’re all separated, and every one has to have a manager, and an advertising manager, and a top engineer, and da-da, da-da, da-da. Now you’ve got the whole market, you’ll still only need one manager, but you can pay a lot more for that manager and that person’s going to be a lot better, and that goes right through all your people. You can hire a really top engineer, you can get real whiz as a marketing person. Now you’ve got a powerful machine, okay? Before it was just scattered dogs. So the interesting thing I found with clustering, because I was really into it, was that the place I could talk about it was with my friends at CTAM. Couldn’t get a lot of currency elsewhere, but people in CTAM understood because it’s a marketing concept. They understood it, and so CTAM was really very responsible, I think, for the concept of clustering, which now of course is the industry way.
NELSON: Absolutely. Lucille, let me ask you. Over your tenure at CTAM, which was what? Three years or so?
LARKIN: Two, three years, yeah.
NELSON: But it was a fast moving period.
LARKIN: Oh, it was a very fast moving period.
NELSON: What were the changes you saw, let’s say, within CTAM during that time?
LARKIN: Numbers. It just got bigger and bigger and bigger. And interest – everybody wanted to know what CTAM was doing; everybody wanted to go to the meetings whether they were in marketing or not. If they were in sales, they were CTAM; they were in marketing, they were CTAM; if they were in management, there were in CTAM. They wanted to be there because they were dealing with the issues of the day more than anybody else. NCTA was valid as a trade association, but their interest was in federal regulation for the most part. Once you finished that slot of the industry, everything else happened at CTAM. I would say that that was the biggest thing that was going on. Every single meeting there was a theme or two themes that truly hadn’t existed the meeting before.
MYHREN: Yeah, it’s true.
LARKIN: They would say, “What is the topic we need to discuss?” and it would be something like, “I’ve just run into this, I haven’t a clue what to do about it.” “Well, I have too. Why don’t we talk about that?” So every single time there was a new meeting, there was a new subject. Churn seemed to last forever; that went on and on.
MYHREN: It’s still there, I think.
LARKIN: It’s still there, I think. But that was the biggest thing – it just got to be the most important place in town, and I think that was at least for a decade.
NELSON: Do you remember any of these particular meetings? I think that literally 25 years ago, CTAM was in Boston. ’81…
LARKIN: It was in Boston and I would have to defer to Trygve about what we discussed as far as industry things were concerned, but we had one hell of a party. I can tell you that!
MYHREN: By ’81 we were farther along the line with the advertising issue; with customer service and the equipment and back office tie, but the real importance of customer service; with packaging of programming; with pay television, tiering, and… I’m trying to remember what we called that at the time because we had tiering and the idea of offering more than one pay service.
NELSON: The multi-pay that came into play at that point?
MYHREN: Absolutely, multi-pay, exactly. Those were major topics at that time.
NELSON: And all that had really seemed to come into play in just the handful of years that you had been around at that point. You can in ’75, we were just talking ’81 all of this stuff kept coming up.
LARKIN: Well, the programming wasn’t there so the issue wasn’t there. So as the programming came, the issues came and you’re talking about them today, Trygve, as though of course everybody knows there’s tiering, of course everybody knows there’s multi-pay, but if you remember no one knew what to do with them at the time.
MYHREN: That’s absolutely right, absolutely right. Every one of those issues…
NELSON: They’d say, when they had an HBO and a Showtime, what do we do with these two things? Are they competing?
LARKIN: Where is your loyalty? If you have HBO, do you dare put on Showtime?
NELSON: How did that get broken down?
MYHREN: Part of it was the idea… I mean, part of the argument against it of course was if you put on Showtime then nobody’s going to buy HBO, or they’re going to stick with HBO, they’ll never buy Showtime. The idea that they’d buy both – whoa, okay. But as a matter of fact, a certain number of people did. So you start off… certainly when I came into the industry in ’75 you had one system with maybe twelve channels, all right? Now you’ve got the possibility to offer not just Home Box Office, but Showtime plus Cinemax, which was a Home Box Office and Time, Inc. thing, and keep offering more of those. Now as you know today, Home Box Office comes in various varieties and time slots and so on, but the idea of putting these things together, having the consumer who could afford it and wanted it pay more money. It meant that you ended up in this very tiered situation where somebody’s paying you $7 for twelve channels and somebody else is paying you $50 for a whole bunch of things. When you run the numbers out, that’s a lot better.
LARKIN: Trygve, you know there’s another issue that comes up with regard to CTAM, and that is the programmers were as involved in CTAM as the operators were involved in CTAM, and yet they were each other’s customers, or the buyers and the sellers, and they were actually sitting and discussing and sometimes fighting about what they could offer and what they would offer and you would sell.
MYHREN: I think you said the key word, which is they were discussing it.
LARKIN: Yes.
MYHREN: Instead of having what could have been true, and to some degree is always true in every industry, having the buyer say to the seller, this is the way it’s going to be and either do that or else, or the seller say to the buyer, well, I’ve got some leverage here so bam!
NELSON: Take it or leave it.
MYHREN: There was a lot of discussion about what’s the right way to do it? How can we maximize the benefits for both the buyer and the seller in this? The only way we could do it is do things that the consumer wants and at prices that the consumer wants. People were there with their own individual agendas but at least they were sitting in the same room and talking, and had it not been for CTAM, I think there would have been a lot less of that and we would have grown more slowly.
LARKIN: You learned each other’s businesses. They learned operations and why you couldn’t do certain things. You learned why they must do certain things.
MYHREN: When Tony Cox or Gail Sermersheim said, “You know, you really ought to think about this,” because they were coming from the programmers’ standpoint, then you thought about it. And then we’d say, “Well, you ought to think about this,” but the fact is there was a discussion, and as we’re learning in the world today discussion is probably a better way to go about things.
LARKIN: The meetings themselves and the panel discussions were intensely serious, but the social part of it was not unserious because a lot of this learning each other’s businesses went on at those social things, so nobody ever was absent from those either. You scheduled in dinner and you scheduled in the dance or the concert, whatever was going on afterwards. That was just as important. There was a little see and be seen business going on there. You wanted everybody to know who you were because… I wouldn’t say people were stealing each other’s employees, but certainly upward mobility was possible in this time.
NELSON: With all that change and action, sure!
MYHREN: There was some movement in the industry.
NELSON: Was that one of the great heritages of CTAM, this collegiality, this willingness to get together and talk and to share?
MYHREN: Yeah, I can’t say that today it’s exactly the same as it was then. I can remember during that ’78, ’79, ’80, ’81 period that we a number of times had discussions about let’s have a small meeting over here the way it used to be where we can all get together and really talk about this stuff, rather than at a larger meeting where there might be more posturing and people would be wanting to hold their secrets a little closer to the vest. I don’t know that today it’s exactly like it was then but I think versus most organizations my sense is today it’s still a hell of a lot more sharing and collegial than most organizations are.
NELSON: Well, and that’s what I was really getting at because obviously cable companies have become very huge companies and you can’t expect that kind of informality and that kind of exchange, but having been coming to this event for almost 20 years now, there is always that feeling that it’s a place of people talk, they share, they party but they’re still talking.
LARKIN: That’s right.
MYHREN: Yes.
NELSON: I think that the roots that were set down in the very early days and then continue into this period just seem to have really found a deep hold.
LARKIN: In as much as it’s possible for the larger numbers because Char knew all these people way back when and so when she came on she was not ignorant of the style and the culture of CTAM, and in whatever way she could protect that I’m sure she has, numbers notwithstanding. You can’t do the same thing with the big numbers.
MYHREN: But I think you’re right and I think it was a good bridge. I think that Gail and Greg at the outset, just their personalities are open personalities and they’re not trying to hide anything and you know that even when you meet them today, right?
NELSON: It’s true.
MYHREN: And so that rubbed off on everybody else I think, and it worked.
LARKIN: And they never walked away. They always kept a toe in.
MYHREN: They’re still involved, doing histories and stuff.
NELSON: Here we are! Which this wouldn’t be happening, we might add, without their involvement in making it happen.
LARKIN: Totally true.
MYHREN: Absolutely.
NELSON: So just to wrap up, give us your take on what went on and why it mattered.
MYHREN: Well, what went on was the introduction of the customer – if you look at it in the broadest sense – the introduction of the customer into the business through the marketing promotion/public relations discipline, through the organization taking a real hand in customer service. I mentioned the back office things, but also the whole panoply of customer service techniques and understanding that importance. And the organization taking a very strong hand in programming – trying to talk to the programmers about how things might be different, trying to encourage the start up of new programming, all of those kinds of things, and because of that… there’s something that should be mentioned here. During the years that we’re talking about, this industry was dramatically regulated. It just couldn’t do much and because of that it couldn’t get the banks to lend enough money. In the beginning they wouldn’t lend anything, but eventually they were lending a little bit but they couldn’t lend too much because the industry was so regulated it could be crushed by the broadcasters and the telephone industry and on and on. Something had to be done about that, and CTAM played a role there too because I know that in my particular case, when I became CEO of ATC, and as I say, largely because of sort of the push that CTAM helped to give me, I immediately jumped on the regulatory issue because we had talked it over and over at CTAM about what we could do if we could cause something to happen that would create more programming, get more money for the industry and so on, we could grow like topsy, but Washington was holding us back. So one of the things that I did over four successive years, right ’til the end of the year in ’84, the last day of the Congressional session in ’84 – and you know they’re two year Congressional sessions so it was through two successive Congressional sessions – I probably spent 35-40% of my time in Washington, and a lot of other people in this industry spent a lot of time in Washington. It was the CTAM thinking that was behind all of that, and what happened was we became de-regulated to a degree. In other words, we were able to raise our prices with some shielding from a municipality just saying you can’t do that. We could come up with rationale and that ability to raise the prices and also to not to have to do everything a municipality asked us to do, no matter how ridiculous and how costly, put us in a position to go to the banks and say, “Hey, we’re real now and we can make some real money here, and you should be lending.” We didn’t have to go to the programming community; the minute they saw that they said “Whoa!” and they started creating new programming, and so the whole thing then mushroomed and went up. That was just critical to the industry, and the type of thinking that caused all that to happen was the CTAM type of thinking.
LARKIN: I think that CTAM needs to congratulate itself for giving you a platform for being able to use your sheer talent to build this industry. They turn to you so often, and you should feel really good about it. Your fingers are all over this industry.
MYHREN: Thank you. There are a lot of people who have fingers all over this industry.
LARKIN: Yeah, there are. There was plenty of work to do.
MYHREN: Some of the people that I haven’t mentioned – I think I mentioned to you that the person who succeeded me was Tom Johnson, and then we had Ernie Olson, we had a fellow named Graham Moore from TCI who was very important during this period, and Gordon Herring, Rod Werner, Andy Goldman from TelePrompTer, and I don’t know whether Andy’s been mentioned in any of these things, but he was a major, major figure at that period.
LARKIN: Yes, he was.
MYHREN: And Del Henry, and Rod Thole was a person of major importance. A fellow named David Lewine from the Times Mirror Company. Shelly Satin, who was a consultant to all of us on customer service and issues of that type, management training. Don Mathison. I think I mentioned Bill Ryan who had a huge role on the advertising side of this. Even Tom Wheeler from the NCTA was a major player. There were just a lot of people who did a lot on the CTAM side, and then of course we’ve mentioned the Bill Bresnans and others who were running major cable systems and had a big role.
NELSON: But of course, fortunately, there were some people running systems who, as you said, had a sense or a sensitivity to this even if they weren’t professional marketers.
MYHREN: Absolutely right, and I think CTAM helped to train a lot of them on the marketing techniques. Those people just sopped it up and used it well.
NELSON: Any last words, Lucille, from you?
LARKIN: I was thinking today specifically of Tony Cox who was such a major presence in the first years of CTAM…
MYHREN: Yes, he was.
LARKIN: Who died an untimely death. Not to be morose about it, but rather to remember with joy what he brought to the party. He was very beloved. He was a good and keen mind; he was extraordinary in making sure that women were 50% represented at HBO and he was part of the beginning of that operation, but he gave Gail a lot of license to do a lot of the work that she did so nobly in the industry that nobody else, frankly, could have pulled off. But I just can’t resist saying a special something about Tony because he was so present and so beloved.
MYHREN: I’ll second that one.
