Interview Date: July 2006
Interviewer: Steve Nelson
Panelists: Ruth Otte, Chuck Ellis, David Van Valkenburg
Abstract
David Van Valkenburg, Ruth Otte and Chuck Ellis discuss the evolution and maturation of CTAM, starting in 1989. They describe the rapid growth of chapters; the establishment of a common philosophy while acknowledging the decentralization of the industry; and focus on excellence and brand. They talk about membership structure, revenue, and commercialization issues. They explore the alliance with NCTA, the emphasis on original programming, and customer service management as well as a shift in mission. They also comment on the competition from DBS and telephone companies, ratings, and the Mark Awards. They conclude by listing CTAM’s myriad accomplishments over the years.
Interview Transcript
STEVE NELSON: …CTAM oral history are another group of old-time TAMers.
DAVID VAN VALKENBURG: Old, yes.
NELSON: I think we’ll start with you because we sort of have you seated in chronological order from your chairmanship. So why don’t you give us a sense of – you are 1989, correct?
VAN VALKENBURG: Chairman in ’89, yes.
NELSON: Okay, give us a sense of what you were doing at the time. I want to get a little feeling for who everybody is before we plunge into CTAM. What were you doing at the time?
VAN VALKENBURG: At that point in time, during that year, I was President at Cablevision Industries in Liberty, NY. I’d just made the transition from a joint venture between Time, Inc., ATC and Houston Industries called Paragon and at the end of that time transitioned to run Multivision for Merrill Lynch and GE Capital down in Greenwich.
NELSON: And how long had you been around the business at this point?
VAN VALKENBURG: Since 1969.
NELSON: Okay, so a lot of experience brought to bear. And just to set the stage, Ruth, you were…?
RUTH OTTE: 1991.
NELSON: ’91.
OTTE: And I was in the middle of my nine year tenure at Discovery as President of Discovery Channel.
NELSON: Okay, so you were right in the heart of all that.
OTTE: I had been before that eight years at MTV in affiliate sales and then VP of Marketing.
NELSON: And Chuck?
CHUCK ELLIS: In 1992 is when I joined the board; I was chairman in 1996. At that time, ’92 was about two years after the Time Warner merger so I was in the process of moving from Warner Cable to the new world of the combined Time Warner Cable in ’92 when I actually joined the board. I got in the industry in 1982 with a company called Group W Cable, which David knows well from the succeeding company that picked up a piece of it in, I think, ’86 from Westinghouse. So that’s how I got started in the business. As you probably know, Group W was the succeeding company to TelePrompTer. Westinghouse bought them in 1981. So that’s how I got my start in the industry.
NELSON: Okay, so now that we have a sense of who you are, or were, and came from, let’s pick up the state of CTAM in the year 1989.
VAN VALKENBURG: In ’89 we were really in a transition from a time of an executive director and industry executive lead to a chief executive, president and a different strategy for CTAM and trying to do many new things, really a proliferation of activities, of functions, of many conferences, a major conference, a time of major growth in the industry and in CTAM. So it was a time of very rapid and in some cases almost uncontrolled growth.
NELSON: So what were some of the major changes that were implemented at that time when you talk about this transition?
VAN VALKENBURG: Probably one of the major changes would be the establishment of chapters. The first chapters were established – there were two in 1987, there were five by 1988 and there were 11 by 1989. So it was a very rapid growth of the local chapters, and that would be probably the biggest change happening is pushing a lot of the marketing ideas and peer exchange down to the local level.
NELSON: And how about in terms of just how the chapters interacted with the overall organization?
VAN VALKENBURG: Now you’re talking of one of the real controversial issues because we established actually as we looked at how do you organize this in the relationship, both the organizational relationship as well as the financial, and actually set up regional boards which I think at Chuck or maybe even before got eliminated. But the objective was to maintain a common thrust, a common image, a common philosophy throughout all of the chapters with the national organization. So there was a board driven centralization of a philosophy at the time, and financial relationship.
NELSON: And was that smooth in terms of decentralizing to some degree while trying to retain a centralized mission and purpose?
VAN VALKENBURG: That was very controversial at the time and one that a lot of to and fro, back and forth between centralization… those out in the Rocky Mountain area wanted to do a lot of their own programs, raise their own money, yet having the control back in Washington in the CTAM office. So there was that constant tension and it was going on in the entire industry of centralization versus decentralization. So it was not just within CTAM. This was really a question of what was going on in the entire industry of centralization versus decentralization.
NELSON: Authority in the field versus the headquarters.
VAN VALKENBURG: Exactly. Yes, yes.
OTTE: And also just the notion of if we do these activities locally and we pay some remittance to CTAM headquarters, then what services are they going to give us in exchange for those, which is also a classic field/headquarters kind of thing. I think we also had a concern for wanting to give them autonomy, right? To let there be imagination and creativity, yet having some kind of quality bar for what… maybe we weren’t thinking of the CTAM brand, but we were certainly thinking of a standard of expectation.
VAN VALKENBURG: Of excellence. Yes, exactly.
OTTE: Right. Of the good thinking in marketing and in cable and customer and all that.
NELSON: Can you think of an instance where this started to in fact work where you had a sense… because obviously there was this tension and at some point it settled down. Was there some instance of something that happened out in the field that kind of worked along with national and people said, yeah… Did you get to a point where you felt like maybe this idea will work?
VAN VALKENBURG: I think that really has to go to Ruth and later.
OTTE: Later.
NELSON: Did it even go as late as your tenure in ’96?
ELLIS: Well, I think the notion of, as David said, centralization/decentralization and some of the tension and a little bit of the paranoia that that creates, which is we’re from headquarters and we should maintain some control over the brand and the experience and what it is that’s going on in the local chapter. There also was some concern, I think, about the financial arrangement between the local chapters and the liability that might have for the parent organization which I think we worked through. But by the time I got involved at CTAM, frankly, the local chapters had, I think, established a lot of credibility in terms of the people that were involved in them, in terms of the programs they were running, the vitality that they created in each one of the markets, the focus on marketing that this organization created by having it decentralized that you really couldn’t do from a national scope, had really gotten to the point where people believed that it worked and therefore, I think, a lot of the natural tension sort of dissipated at that point.
NELSON: But you’re also seeing that on an operational level in the business itself?
ELLIS: Absolutely.
VAN VALKENBURG: That’s what I was going to add because through that same period of time you had the same tension happening within several companies. Cox had decentralized under my time in the very early and mid-80s, but Time Warner, or Time and Time Warner was more like into the late ’80s, early ’90s for decentralization, and so at least those two were going through the same kinds of things. Same with TCI, with Comcast, so those were corporate tensions as well, and so I think that as you get to the time that Chuck was on the board, you had a lot of the corporate issues resolved as well, and a lot more comfort with the skills, the integrity, the ability of those out in the field, in the regions, in the individual systems that we didn’t have when I was on the board and chairing it and starting the chapters in the ’87, ’88, ’89 era.
NELSON: Now the other thing that was going on when the chapters were started was the whole change in the way CTAM was itself centrally operated and run. Talk about that for a minute.
VAN VALKENBURG: Well, it was because you have the more administrative era of Lucille Larkin and Vic Parra and it was really industry executive led.
NELSON: That’s where they came out of.
VAN VALKENBURG: Where they came out. So they were executive directors and sort of following the lead of the various executives, corporate executives, marketing executives typically of the cable industry, and now in late ’87 into ’88, we bring in Margaret Durborow.
NELSON: And what was her background?
VAN VALKENBURG: Her background came from industry, but with a new strategy of being much more centrally led where you had a president/chief executive with a staff that could move a lot of programs and guide a lot of programs, whether it was HR or pay-per-view or addressability, the chapters where you had a knot of activity going on, research was another one, and so you needed that central staff, or at least that was the feeling, to control everything and to get that expertise out throughout the industry. So it went from a very decentralized kind of organization to a very centralized one as we get into the late ’80s.
NELSON: And that’s the point in time which the staff not only grew, became more professional, I’m hearing a lot of new activities – where did the money come from to make all that happen?
VAN VALKENBURG: Well, that’s a very good point. Through that period of time it was strictly single membership oriented, number one. Number two was contrary to what we see today, it was all non-commercial so there weren’t the revenue streams from the annual conference that are later available for support of a lot of the activities. It was strictly single membership, not corporate memberships, in terms of the due structure.
NELSON: So this is still carrying on the original vision of this as a professional society with individual members.
VAN VALKENBURG: Exactly correct.
NELSON: But now this structure is growing out of that.
VAN VALKENBURG: Right, and now we run into the financial problems that bridge between my time and Ruth’s where we run against some huge barriers in terms of available funding for all of the activities that are being demanded but there are not the funds for it all.
OTTE: You could see the mix right here. You have individual memberships, we were in this constant conversation of showing our value to the industry, to the MSOs, to the people paying for these memberships, and expanding industries, so you want to offer more programs that your customers perceive as valuable, right? And you move to do that in some ways that were actually very successful.
NELSON: But then you have to pay for doing those.
OTTE: But then this non-sponsorship… That was a very deeply held principle. I’m not sure exactly why, but I remember it was something people felt at the time like we shouldn’t change, right?
VAN VALKENBURG: My example is in 1989, as Chairman of CTAM and we’re in Chicago, and WGN Tribune owning the Cubs wanted to have an event at Wrigley Field and I prevented them from doing so. Warner Brothers had just issued the movie Batman and wanted to have a big party, sponsored and sent out invitations. Again, I prevented that because…
OTTE: You had to.
VAN VALKENBURG: …of the non-commercial policy that we had that this is an industry conference. This is not a convention.
NELSON: Or a trade show or… yeah.
VAN VALKENBURG: Trade show. This is sharing among peers.
OTTE: Learning together, best practices, explorations.
VAN VALKENBURG: So it was, in a lot of ways, a professional society. It was the objective not to be a… you’re right, a trade show.
NELSON: But now you’ve got these companies that are coming forth and want to take people to the ballgame, throw a party, the kinds of things we don’t even think about today. Was that still true during your reign?
OTTE: Oh, yeah, yeah. I had actually forgotten about that whole piece, but speaking with David…
NELSON: Did you have to intervene and shut some parties down?
OTTE: I don’t remember shutting any down, but I remember a lot of discussion about the pressure between having that policy and yet wanting to fund more things and not having the funds to do it simply from the individual subscriber dues, basically. I don’t exactly know how the transition happened but walking here today you can see it’s a much bigger event and there’s many very multiple strands of learning and fun events and all that, and somehow they’ve figured out the sponsorship piece in an appropriate way.
VAN VALKENBURG: Yeah, tonight’s the MTV party. Disney has a big party. You look at the floor here – I mean, it’s close to being a trade show.
NELSON: Yeah, there are exhibits. Now you’re not going to go to the party tonight and try to shut it down?
LAUGHTER
VAN VALKENBURG: No, I don’t have that authority, no.
NELSON: And Chuck, by your time, this commercialization policy really had begun to change, I believe, by then.
ELLIS: Well, it was evolving. I think there was still a real legitimate, heartfelt concern about the commercialization policy and there’s a lot to the story of how CTAM went from an organization in the late ’80s to early ’90s with a very broad agenda that drove a lot of costs that were new to the organization with a fairly flat revenue stream to cover it that made the idea of additional revenue streams through things like commercial opportunities like we’re enjoying today a pretty inviting concept. Two things happened, and I don’t want to steal any thunder from the next discussion about the ’91, ’92 evolution from not only the leadership of CTAM, but also sort of the agenda and the scope and the mission of CTAM really getting tighter in that period of time, but we really did continue to debate and evolve in the commercial policy area and we started to do things like sponsored parties, we started to offer minimum sponsorships of different parts of the convention, we had limitations on how it could be promoted, we limitations on what kinds of signs you could use for it, etc. but the notion of the opportunity is there as long as we didn’t flaunt it and as long as it didn’t get out of control, the revenue streams and opportunities to work more effectively with programmers and other vendors and operators seemed to make more sense. So we sort of dripped dripped our way over time to what you see today which is a mini-trade show.
NELSON: As that evolved you didn’t really find there was a huge resistance to these changes? Were people saying why are we having this party and how did Discovery – sorry about that – put their sign up there? Because today there are signs everywhere.
ELLIS: No, I don’t think there was big resistance. I think, frankly, the leadership of CTAM trying to honor the principles of CTAM were trying to guard the notion of let’s not let this get out of control because if it gets out of control the opportunities – because with marketing we’re in the sights of every programming service and vendors and lots of other people – the opportunities to make this a flow-through marketing machine from outside sources was very tempting. So there was a lot of demand from those that wanted to participate from a commercial standpoint. There were a lot of the members who wanted that to happen. I think, frankly, it was the CTAM leadership trying to keep a lid on it to a certain extent and yet be reasonable and practical that kept it in balance for awhile.
OTTE: I think like any event like this there’s a sense that what’s the content, what am I going to learn, are these people really on top of our industry, our issues, what we’re facing today? That whole theme has been a huge part of what CTAM has cared about and still has to and does care about, right? So it seems like that continued, this always listening and trying to anticipate the real needs of what are we facing – customer focus, competition, all those themes – and then this thing was like the frog in the water. The water got hotter and it became a non-issue it seems.
ELLIS: I think the organization has always been one that wanted to provide balanced information and not necessarily be an advocate for any brand, for any company. We certainly had initiatives that the organization believed in because the constituency believed in it and needed us to stand up for certain initiatives, but products and the services and endorsement of those at the expense of other things, even through the initial decisions about how we control the commercial policy, I think was the guiding principle on why we should go slow with that because we wanted to keep the playing field level and not provide advocacy for any particular brand or product.
VAN VALKENBURG: I’d like to add one other word to what Chuck said and that is one of the beauties of this industry, and I don’t know that there are any others like it, and that is it’s always been a collaborative industry. Even in the days of heavy franchising when you’re saying bad things about each other as you were standing before a city council, you were on the other hand, in other markets, were cooperating, and at places like CTAM, CTAM was the epitome of that collaboration and even when there were bitter negotiations between a programmer and an operator, still there was that collaboration that was there that permeates and permeated and still permeates CTAM, and that’s one of the beauties of CTAM and of this industry is that ability to collaborate and to look for best practices, to share experiences, share research and to learn from each other. That was underlying the non-commercialization policy. This organization can’t afford to lose… even with some of the parties that go on and some of the trade show aspects of it, but still you look at the sessions and it’s still very collaborative.
OTTE: We even felt that way on the programmer side because we were fighting ferociously really against each other to get distribution from you all, night and day, and also essentially for viewership as well, but I was neck-and-neck at that time with A&E and Whitney Goit was on our board. That is a really fabulous thing about… I don’t know if it’s the sense that we always felt in this business that we were making history and doing something new together, figuring things out together, whether that was part of it, or if it was just the fact of the way the franchises were that you didn’t directly overbuild… I mean, you did some, but I don’t know. Something contributed to that that is very unusual.
VAN VALKENBURG: You had something else at the time and we’ll see whether it continues, and that is by today’s standards this was a very fragmented industry because when you look at the top five companies in 1986 when I came on the board, 28% of the customers were in those five companies. TCI was the biggest with only 11%. Today you’ve got over 2/3 in five companies, two of which are direct to home, and so you’ve got a huge, huge shift in the concentration of the industry. In those days when we had… in the late ’80s and earlier, with many companies you did have a lot of that discussion and collaboration of learning from each other because there were many. So there’s a real difference in terms of the industry today versus at that point in time, and you had some very bright people coming into this industry from outside. In fact, I think probably all three of us can say that we came from outside the industry.
NELSON: Well, everyone came from somewhere, right?
VAN VALKENBURG: Somewhere else! And so we had many, many very bright, very capable people coming in, sharing their backgrounds, as well as their experiences in the industry. So all of that underlies the non-commercialization policy and maintaining that was very important to us in terms of the collaboration and the peer exchange and learning from outside the industry as well as inside.
OTTE: There’s another thing too when you think about it. You had this pretty good-size board that covered all aspects of the industry, and then you had the chair or the committee putting together the conference. So there was a huge attempt to get feedback all the time through having this wide well-balanced group putting the conference on, and the board, and then trying to listen in every other way to what was going on.
NELSON: You talked about a lot of people from the outside coming in. That seemed to be a period, because of the growth, that you’d have to bring in a lot of people. Did that really enhance the role of CTAM because the whole learning experience, the whole collaboration, the kind of relationships that people seemed to develop around the organization?
VAN VALKENBURG: This is where somebody new to the industry would come. This was the place if you were anywhere in marketing or management, administration early days, or very early days if you were in ad sales – that’s another topic in terms of spin-off of CAB – or human resources, the spin-off to CATHRA. So anybody in those various disciplines that was new to the industry, this was the place to be to learn what’s going on, what the critical issues are, and without the large corporate staffs at the time, this was the place.
NELSON: And how about CTAM’s relationship with NCTA at that time because now you’re painting a picture of an organization that is the place to be. How did NCTA feel about that?
VAN VALKENBURG: Some of the others may want to speak… I can speak for my time and my time was there was a very close relationship with NCTA at that time. We had each year CEO mini-conferences that were just for CEOs. We had 50-75 executives from the entire industry, both programming and operators, dealing with issues that were at the executive level and those were all part of the NCTA and working with NCTA, and in some of those cases we had NCTA presentations like when we came into regulation, re-regulation, syndex – those were issues that were discussed here as well. The relationship altered some, I think, as we get into later years, into the ’90s.
OTTE: I think. I recall that we had certain areas where we coordinated, but we had a concern about CTAM’s identity with the leaders at NCTA, really with the key cable operators. Had we… as we felt our way in this expansion of services and as the industry was expanding and this whole mode of optimism that characterized the times all the way through – our brands were getting stronger, our service was getting better, at least in the time that I was there – so we actually had, Chuck reminded me, we went out and talked and did research and one-on-one and kind of closed the door and what’s going on kind of conversations with several leaders in the industry just to calibrate where we were. These really hard questions any organization in a rapid time of growth asks – Are we expanding too fast? Are we really providing value? What do you need more of, what do you need less of [???] kind of thing. But I distinctly remember that our identity with them, their support of their memberships inside their organizations among the big MSOs was essential to our survival and was something we were concerned about.
NELSON: And by your term?
ELLIS: Well, even before my term because I joined the board in ’92 and the leadership of the organization, Ruth and Matt Blank and several others, were really taking a very candid pragmatic look at what the mission of CTAM had evolved to and everything that Ruth just mentioned in terms of the breadth and scope of the agenda and the initiatives and the cost structure I think led to a question in the minds of a lot of CEOs and operators, what does CTAM stand for? What is it they deliver to this industry, what is the value, what do we get for the money the individuals, and therefore we, pay to CTAM? So I think despite the fact that a lot of the new initiatives that CTAM went forward with were driven by operator and program requests to be gentle about it, the reality was it got to be sort of a mile-wide and an inch-deep in a lot of people’s minds. As a result of that, I think the relationship maybe at NCTA suffered a little bit during this time period. I think frankly it recovered nicely in the next several years and my term on the board really overlapped Decker Anstrom. Decker clearly got the notion that if the organizations work more effectively together and we took advantage of the skills and the knowledge and the capabilities that exist at CTAM, i.e. marketplace, consumer, marketing-oriented focus and capabilities, that the NCTA in its public and legislative arena could benefit, and that those two things working together would allow NCTA to be more successful in the regulatory and legislative arena, and a number of initiatives came out of that. The on-time guarantee of David’s era, which were the service standards which were certainly intended to in a more consistent manner to provide a better customer experience by having all the operators buy into it and execute and having a tracking mechanism to support that. In the evolution of the late ’80s to the early ’90s when competition really became something beyond an intellectual experience to the point at which it was a reality with DBS and the de-regulation in the early ’90s led to, I think, a renewed awareness that we needed to focus more on the customer and therefore CTAM was a very valuable ally for the NCTA as a result of that.
NELSON: Well, as we know, the industry has gone through these cycles of regulation, re-regulation, de-regulation. Where were you in that cycle and how did CTAM help further the industry during that?
VAN VALKENBURG: Well, I spanned… we were de-regulated, if I recall, in ’87 if I recall correctly, and we were re-regulated in ’92, I believe, and so my time almost spanned that era.
NELSON: The de-regulated era.
VAN VALKENBURG: The de-regulated era, preparing for de-regulation. But in my time the major focus as we entered into the late ’80s was, first of all, as Chuck said, was customer service. CTAM was at the forefront of that and that led to the NCTA putting together the committee for the customer service standards, but that really came from initiatives within CTAM. The other was original programming. That’s where Ruth comes in with original programming, with program promotion, and that time when there’s de-regulation, as rates were increased, needing to provide perceived value for the customer. So a lot of discussion about original programming, promotion of original programming and supporting the rates. That was all during that period of time.
OTTE: It was so coincidental, too, because on the network side at that time we had learned a lot more about our audiences. We knew what resonated, what didn’t, and yet we were able to dramatically increase our CPMs by having original television, and charge more for it and have a good story about it, and so there was this amazing dovetailing of both of our revenue streams requiring this, and obviously the opportunity then to differentiate your brand and build more loyalty and viewership and all that. So we created this very significant global fund for worldwide production of original television starting in ’90 at Discovery. We just upped it so dramatically and it was an amazing coincidence.
VAN VALKENBURG: And who really drove that for you?
OTTE: Our whole board supported it but John Malone was really the declarer of how important this was to own the rights and exploit them more. Of course that was the basis for our international expansion too, but what’s fascinating to me is that we didn’t end up having to come around and tell you all how much higher your rates – well, that did happen too – but in something you didn’t care about. You had the same desire, at least theoretically, not to pay more but to have better programming for this whole regulation thing, while we had to do it to… we were just beginning to get credible vis-à-vis the three broadcast networks in terms of ad sales because it took all of us time to build those relationships, tell our story, deliver the ratings and get higher amounts every year from agencies and advertisers. It’s an interesting confluence.
VAN VALKENBURG: When you look at the ratings and you’d know this better than I, but looking at some of the cable ratings in the mid and late ’80s, you’re still in the single digits. Bob Wright spoke in 1986, I believe it was, or ’87, and said, “All of cable has less audience than just NBC.” And you see the change in that that’s occurred since, but that goes back to those efforts by the operators asking programmers for original programming, obviously meaning higher rates for us, but that need to drive viewership and to drive more value for our customers.
OTTE: And then coupled with a need on our side to dramatically change our organizations. I think at Discovery and TLC we could buy documentaries in a very vibrant worldwide market and co-produce and all those, but we changed from being what was a very, very good acquisition organization to a very significant production organization and now it’s just amazing what they produce.
VAN VALKENBURG: The other thing that was happening there, and I think it’s an interesting term, and that is when you look at, especially the time of the three of us, but the cable industry went from being a cable operator on the MSO side to a media business. It really made a dramatic change, and again, this was a central role that CTAM played in that transition of bringing to light the programming and the service to the customer, but it really was a change from running a cable physically to really being in the media.
NELSON: Well, it sounds like there’s also a lot more awareness of the customer. You talk about understanding the customer better. Where did the role of research, which CTAM obviously has really become a mainstay, how did that evolve over this time period? What was going on?
VAN VALKENBURG: There were several research studies. I remember one that was critical was Family Viewing. I think that would have been right in your era, right?
OTTE: Um-hmm.
VAN VALKENBURG: Right before you came on, late in my time, of creating the Family Viewing Study. Who makes the decision and who views what, and within the home there are very different viewing patterns.
OTTE: Don’t you remember that whole thing about the remote and the guys and the girls, and the whole fight about the remote?
VAN VALKENBURG: Yes, exactly. Number one. Number two was as we moved into urban markets being very, very different from one neighborhood to another, so you’ve got that research as well, a lot of demographic research going on in terms of identifying… the easy one is the time I had northern Manhattan. Well, Harlem across town to the Upper East Side, those are very, very different markets, but when you look at a Durham, North Carolina from south to north, a very clear dividing line, again, very, very, very different markets. And again, CTAM was doing the research as an organization under the research committee of identifying those kinds of issues within the markets and that was the transition where we were also going from the classic reseller to original programming, unique programming, exclusive programming of the new satellite delivered services like Ruth had with Discovery.
NELSON: So when you were chairman in 1989, was there already a major research effort underway or was this really just beginning at that point?
VAN VALKENBURG: Just beginning. This was beginning with people like Ajit Dalvi, Pete Gatseos, others at that time who had a research bent were no becoming more senior in the industry and able to put forward research ideas that would be valuable for the industry and supported by the industry.
NELSON: But you must have brought that kind of mentality to CTAM as well.
OTTE: It was very prevalent, and the board that we had, this topic of the consumer was all we talked about. As a matter of fact, privately even in some despair about would we ever get certain MSOs to take it as seriously as they should be because a little bit behind closed doors on the programming side we’d say, “We get our report card the next day. We know did we serve our viewers or not. Did they come or not.” And this was the whole time when the industry was really working to better its service. I feel like, yes, it was very deep in the DNA of CTAM.
ELLIS: And I think in the era in the early ’90s, at least from ’90 to ’96 when the notion of competition went to the reality of competition in CTAM, we began to reexamine our mission and the scope and deliverables and how we’re going to maintain relevance within the industry and really provide value. The area of research was one that really rose up on the screen as being critically important for our members. It was one that really could be done in a very balanced way, so there were industry trends, there were consumer trends, it was not individual company research that you might be willing to share with somebody who you didn’t want to know the information, or in a public forum. I think it was Grace Ascolese – I’m sorry if I’m mispronouncing the name – who we hired as head of research and really took the whole research function inside the organization to a different level, and it wasn’t accidental because the board was driving it, the competitive forces in the world were driving it, and CTAM’s reevaluation of itself in the strategic plan we did in the 1993-94 period really pointed towards this being one of the deliverables for CTAM that would provide immense value to our users and consumers in the industry.
OTTE: Well, plus you all were in all these conversations that would strike terror in our hearts about how you ought to package services and offer these different tiers and the gold and the you know…
ELLIS: The NPTs and the MPTs of re-regulation, yes.
OTTE: Yeah, so I think there was a need to on so many levels… like remember at some of the early conferences in CTAM in our eras, somebody would have a big piece of research, like Ajit had once or maybe Jerry, I can’t remember who, Jerry Maglio, would share that, as you said, just to more deeply understand how to market and sell pay, basic, expanded basic, all that stuff. So, it was definitely the theme of the times.
NELSON: You talked about this as strategic planning around ’93. Did that come about – you mentioned competition, but also you had the re-regulation, so the marketplace out there changed drastically. Is that what led to that?
ELLIS: Absolutely. I think it was a recognition coming out of the ’80s and in the early ’90s that the world around us was changing, and it was changing in the form of real, on the ground, well-financed competition had moved beyond the intellectual experience to reality. DBS had launched, I think, by ’95, ’94, somewhere in that time period they were a million, million and a half, moving to two million within probably another 18 months after that. The telephone companies were not only talking about what they were going to do because of the re-regulation/de-regulation of the industry, depending on how you want to look at it, and so there were a lot of real marketplace forces at work. And I would say also Char’s tenure had begun in 1992, a very smart woman, very in tune with all the constituencies of the organization and the industry, and was able to help. And I would really give credit to Barry Elson’s strategic plan that was done, I think, in ’93, ’94 that really helped us to understand how the world was changing, how the people who sat around this table are forming alliances with what would be viewed as head-to-head competitors probably unwilling to share information they previously would be willing to share, and unwilling to sit in public forums large or small and share research data about how their NPT or MPTs were performing because they didn’t want competition to see it, did not want to talk specifically about how their pay-per-view business was responding to certain marketing and offer tactics because they didn’t want to share it with potential competition. So CTAM really said, okay, in the midst of all that, what do we do, what do we become and how can we provide the most relevance to the industry, and what it has evolved to is really research being an absolute core value of the organization. The notion of providing outside information and expertise to the industry through conferences really took on a lot of top spin in the early ’90s, and I was looking at some of the conference speakers in the early ’90s and the mid ’90s and in 1992 in San Francisco, which was sort of the beginning of the notion of reality of competition, the first three sessions were devoted to quality of service. Darryl Hartley-Leonard, who was president of the Hyatt Corporation, talked about… it was sort of the early days of CRM, Customer Relationship Management, and what kind of databases they used and what kind of company culture they created. Len Berry who had written a very interesting book on marketing and service strategies was the second speaker that morning. And Bill McKnight of Alaska Air, who had always been viewed up until one of their engines fell off when they went in the ground for the first time after that, as being a company that had separated themselves from a competitive landscape because of a high quality customer experience. They were the first three speakers. Now, if you went back, I suspect, eight or nine years into CTAM’s history that just wouldn’t have happened, and it wouldn’t have happened because the reality of competition wasn’t there. We deliberately structured conferences, we deliberately structured the deliverables to the organization. The committees on CTAM changed as a result of that, and we really evolved to what we felt were marketing skills development and education as sort of being the core mantra and mission of CTAM, and from that came things like the CTAM Advanced Education Seminar which is now, I think, close to ten years old, and research projects that again added value to the brand and added value to the members. The CTAM Probe was initiated during this period, which really helped the industry share information about new product trends, new revenue opportunities in the industry. So there was, I think, a conscious decision by the organization to evolve its mission from small rooms and large rooms filled with people sharing very precious information and data about how their business was performing to one that could help them industry by example from outside companies and outside industries and best practices to be better marketers and be better strategic marketers, better tactical marketers, and that’s what I think we experienced in rapid form during the ’90 through ’96 period that I was most actively involved.
NELSON: During your tenure did CTAM have the same kind of strategic focus? You’re shaking your head no, so…
VAN VALKENBURG: No, no, no, it was not, not at all. It was much more inward focused. There were warnings of potential competition coming, and we saw competition for the viewer in terms of the videocassette, the broadcaster, those were the competitors up through the end of the ’80s. There was, as I say, the potential of telephone companies coming, of DBS, of MMDS – it was MMDS in a few markets – but it was one of preparing for competition, but there was not the urgency of it that especially in Chuck’s time experienced because it was real. And so it was much more, as I say, almost inward focused in my time of customer service. Customer service was more one of growing the business because a satisfied customer would stay, and gaining the reputation, and also maintaining quality service in order to gain and then maintain deregulation, de-regulated rates. So those were the driving forces for the conferences at that time. Then we got into program promotion with increasing, again, customers and increasing ratings during that time.
NELSON: Now, Ruth, when you came in, obviously de-regulation had occurred; we hadn’t gotten to the re-regulation. I’m trying to keep all these straight. But of course you came from, and you mentioned this earlier, a place where competition was just part of your life. You’re competing for these channel slots, and hey, we want to have another channel we’re going to launch, we’ve got to get a slot that maybe somebody else doesn’t get. Do you think that the programmers, and you weren’t the first, I guess John Reardon was the first…
OTTE: The first programmer, yeah.
NELSON: Do you think that you brought a different dimension to CTAM because of that kind of a background of you’re scrambling in the marketplace?
OTTE: I don’t know, it’s possible. I think we felt very intent upon insuring that the operators understood what our programming was, what made it different, what was special, what was in the pipeline. So I distinctly remember that, and certainly when the Nielsen ratings got quicker so that literally the next day you saw what you did and the demographics you delivered were more rapid so you could really get your report card in terms of what you were selling to an advertiser – I don’t know, it just always felt like an extremely competitive business to me in that sense. We had to earn our place on their dial, increase our sense of their perceived value of what we were offering vis-à-vis the rates we were asking, and there’s just no joking around about the Nielsen sample. You either got your rating or you didn’t, and you had promised that to an advertiser and you had to either do make goods or… right? So, I don’t know. Now I can only imagine how it feels in terms of that, but with all this new media…
NELSON: You were competing for the eyeballs so that was always there as a programmer.
OTTE: Right. We were having our own internal stories about who were we, what was our core promise, how much could we go off of that to get a rating, right? You could put on lots of shows but that wouldn’t be a Discovery promise, right? I don’t think that was unique to us. It’s the notion of your brand, how to be true to that and still have a sizeable enough audience that you delivered and built the business.
NELSON: I think another innovation that came up during your time period, if I’m not mistaken, was the Mark Awards had kind of existed at that point but it became much more solidified, the name was established.
OTTE: You know, to me the Mark Awards would probably be the most interesting thing to watch in terms of the evolution of the sophistication and professionalization and innovation of this industry. Just think about what we thought was a great campaign in 1986, right? And now look at what the MSOs invest. It’s so remarkable the caliber of work that’s come out from here. I guess I feel like the huge gift that I had was just growing up at MTV because even in 1981 the song was super serve a niche audience – know them deeply, super serve them, right? And that’s still the basis of their business.
NELSON: But it was a radical notion at the time because of super-serving, both the super and the niche.
OTTE: Right, because the three broadcast networks were the antithesis of that and they were disdainful of us and thought we were crazy.
NELSON: And they didn’t really super-serve anybody. They just threw it out there for everyone.
OTTE: Right.
NELSON: I just want to follow up more about the Mark Awards. Where were they at…?
VAN VALKENBURG: They were just barely beginning. It was almost tabletop newspaper ads. It was really simple during most of my time. Very little, in fact, I don’t know we had much cross-channel promotion. That was an issue that we started to talk about during my time was on-air promotion of individual programs, but that evolved between my time and Ruth’s.
OTTE: That evolved quite a bit in my era because we started to produce these amazing expensive kits every month to show you all we were doing, and these much better videos that you could cross-promote, try to enroll you in that, and our own consumer marketing budgets were going up dramatically at this time.
VAN VALKENBURG: Well, setting the standard of asking for 20% of your available spots, being for cross-channel promotion that happened during my time. Now that was radical!
NELSON: Was there a lot of resistance, I assume?
VAN VALKENBURG: Absolutely! Much resistance.
NELSON: You want what??
ELLIS: Still to some degree there is some tension involved in that today.
VAN VALKENBURG: But with what Ruth was saying in terms of the kind of product that the promotional spots we were able to get and putting those on, those had real value and they had the quality consistency as well, which we hadn’t had as a, back to my previous statement, cable operator. That was a transition, again, getting us into the media era.
ELLIS: As real media players.
OTTE: I think you all started to hire agencies… Wasn’t that about this time, in the early ’90s when you…?
VAN VALKENBURG: Sure.
ELLIS: Again, I don’t want to overdue this notion of the explosion of competition, but frankly I think what it did was to unify the CTAM board with the notion of this is real for everybody that sits around this table. Every programmer that sits around this table has new threats every day coming online, the introduction of new programming services and new niches were coming.
OTTE: There were so many new channels, right.
ELLIS: They were coming off the end of the line almost monthly, and therefore the programmers were faced with it. We were faced with telcos, we were faced with DBS, we were faced with alliances and partnerships that were being discussed and we thought were going to be real. So the notion of setting the table and the agenda around what can we do to help this industry be better marketers, be better strategic marketers, to know their customers better, to vest themselves in the customer experience and apply their resources to that, and what role CTAM can play in that was, in my experience with CTAM, one of the ah-ha moments for the organization in terms of unifying the board and setting the agenda for what the organization was going to do. The 1995 conference that Josh and I shared was “Wake up and smell the competition”, which was the coffee cup notion in San Francisco. We had huge branding companies – Brandon Tartikoff and Jamie Kellner, who was just building the brands, which worked for programmers and worked for us, the notion of if you’re going to survive in the marketplace you’ve got to create a unique, memorable leave-behind from the standpoint of how a customer responds to your brand, and we need to get that and we need to understand how to develop it and execute it and tactically stay against it day in and day out. That was consistent for programmers and operators during that period of time.
NELSON: But it was new to operators, the idea of …
ELLIS: It was new to operators and I think there were folks that came from outside the industry in the late ’80s that understood it because they came from kind of classic marketing branding companies. Charlie, I think, was one of those, Charlie Townsend. And I came from the fast food business. I’d been in the fast food business for 11 years – dog eat dog. Somebody opens up down the street and they take 60% of your revenue tomorrow morning. So my engines are running in this competitive era and I’m trying to see if everybody else is as excited about it as I am, and fortunately the reality of competition moves people down that path. The notion for many folks of really understanding what branding was, that it wasn’t just an advertising campaign.
OTTE: Right. A slogan.
ELLIS: It’s how you do business and what the customer sees and experiences consistently day in and day out with you – this was new to the operators, and frankly I think the industry is still learning what that really is all about and how to execute it and how to discipline yourself to stay against it. Brands don’t get built in six months and 12 months and 24 months. They get built with continuity over an extended period of time. So I think it’s still a learning process but I think this was a period in CTAM’s development and the industry’s development that was really vital to understanding real competitive marketing strategies and tactics and the notion of branding and differentiation.
VAN VALKENBURG: I think there was a quote from Jeff Greenfield in 1989 that I thought sort of captured what happened in terms of the maturation of this industry. It went from being really in human experience a child to suddenly an adult and learning how to live in that world, and that was in five years, up through ’89, cable going from a David to a Goliath and that growth that happened, but what wasn’t the case is we hadn’t matured. We hadn’t learned all the lessons of what it is to be a big boy in the media world and that’s what you see when you look at the years between my time and Chuck’s, and even to today, is that maturation that was happening because in my time it was very clumsy and that’s what led to the re-regulation in ’92.
OTTE: And one of the things really to Margaret’s credit, she was just ferocious on that point about the customer.
VAN VALKENBURG: Exactly. Margaret was, absolutely.
OTTE: She was really very concerned about the implications if we didn’t as an industry, and I think a really good spokesperson for that.
NELSON: About trying to avoid that result.
OTTE: Just being serious about… what she felt, I think, and I think the organization felt was a certain responsibility to promulgate this and make this real in the industry, to do everything that we could, anticipating whatever future competitively from a regulatory or political standpoint. And because it was just the right thing to do to build a good business.
NELSON: I did mention the Mark Awards a little bit before – when did that get elevated in prominence to it became at one point a great big spectacle, in fact, and it still is obviously a very important part of the event.
OTTE: There was always a debate about when to schedule it so that people would come, so that the people who had worked so hard to do all these campaigns got their recognition. So marketing within these companies, we would try to make MSOs come. Do you remember that? Attend, so they would see the good work that their marketing people had done.
VAN VALKENBURG: I attended part of last night’s. Talk about professional. This is really professional. It is a real media presentation and the quality in what I see coming from Comcast is as well. But it is a different world from when … at least in my time it was tabletop, as I said, to I don’t remember yours. I don’t remember yours, how it evolved once it got to you, Chuck.
OTTE: Well, we started to get outside talent, remember? Certain networks would offer up a well-known host or something. That was one transition in our time.
ELLIS: More professional production to support the presentation, a little more discipline in how it was done.
OTTE: And how it was judged.
ELLIS: And how it was judged, also. But I recall in that period, even before I was chairman, that it moved fairly rapidly in terms of how well it was done and the exposure that it got. We always did wrestle with where in the conference agenda do you put it because you want a lot of people to see it and the people who did a great job to have a lot of people clapping for them. They may have solved that today, I don’t know, but it was always a struggle as I recall.
NELSON: But part of it then was obviously to recognize the work that people had done, but it also was a bit of marketing on behalf of CTAM itself by letting the world see that, hey, this marketing stuff is real and we need to be doing it.
OTTE: Yeah. There was some period of time, I hope this isn’t too ungenerous, but it seemed like a lot of the top, top leaders of MSOs had come up not through marketing, they had come up through other disciplines in engineering and other things, and so just like we all are a product of our experience to get them to truly, authentically see the importance of this and value it was a bit of a missionary zeal that we had in the early… in the time I was here.
VAN VALKENBURG: Just as a commercial for The Cable Center, I believe that at least all of the winners of the Mark Awards are in the archives there at The Cable Center, so just to put a plug in for The Center as well.
NELSON: And for the winners.
VAN VALKENBURG: And for the winners, exactly.
NELSON: Who have now been immortalized and aren’t merely highlighted for the day, but immortalized.
VAN VALKENBURG: I don’t know whether it was all the entries but certainly the winners are all there at The Cable Center.
NELSON: You know what I’d like to do at this point because we’ve been talking for a long time, is maybe just kind of characterize what went on with CTAM as kind of a wrap-up from… this is rather a great transition really. We’re only talking about from your tenure to yours is only seven years but when you look at …
OTTE: It’s so dramatic.
NELSON: It’s huge.
VAN VALKENBURG: Huge. It is huge.
NELSON: So just take a crack at kind of wrapping that up. What went on with CTAM in that time period?
VAN VALKENBURG: I would characterize it – my time – of trying to discover its identity. What is CTAM? And we went in a lot of different directions. It was a proliferation of activities, of conferences, of training programs, master courses, sales manager training, pay-per-view, human resources, research – it was just a proliferation and so it was one of trying to determine what is our identity and what is CTAM and marketing and administrative activities, what is the role within the industry? So it was a struggle for identity in terms of my time.
OTTE: I would say somewhat of that same struggle…
NELSON: Still going on a couple of years later?
OTTE: Yeah, but in this context of wanting to really, really serve this industry and also empower the industry to not just give lip service to customer care, but be it and do it and realize it and budget it and do all the things you have to do to make something real in an organization. I think our identity crisis, and then there was a transition of leadership out of that enquiry of have we gotten too big, what should we really be focused on, and then from there you all went into that strategic planning process, right?
ELLIS: I think the two big catalysts for us were Char Beales and the competitive marketplace in terms of what shaped the ’92, ’96 and I think beyond, and it allowed the organization to really sharpen its focus. I think it allowed the board to be more cohesive in terms of what we should be doing and why we should be doing it, more consensus around the deliverables, i.e. education and research and skills building and so forth. And Char’s leadership and her ability to build consensus through lots of different points of view held very strongly by individuals on the board, and she was great at networking and still is, beyond just the board at CEO levels and other senior levels within the industry. There was a real gelling and a feeling of solidness about what CTAM was all about and what it could do and that it could make this transition from trying to define itself to a little bit of a malaise to the point at which it was really delivering consistent value to its members and to the industry and had a lot of respect in other organizations like CTAM because of that. I think all of those things together are one of the reasons why the organization went from 2,800 to almost 5,000 from ’92 to I think 1996. It almost doubled in that relatively short period of time. I think the organization sort of got its legs and got its confidence and felt good about what it was doing and set the tracks down strategically. I think one of the other important things that was done was there is a strategic discipline inside CTAM that was started I think then that remains today that just does a very pragmatic look at where the world is, where the industry is, where CTAM is and therefore what should we be doing for the next two to three years to support that. Mixed in with all of that, fortunately, and I’ve sort of been close to the organization even up to the most recent years, I think there remains a level of openness and mutual respect and ability to work things through within this CTAM organization despite the fact that competition has become white hot that is pretty unique and pretty special. May that always continue, and I think you really have to give credit to people like Gail and Greg who created those values to begin with, which was open sharing and mutual respect and if we work together and do it honestly with the right motivations, we can work through just about any situation.
NELSON: So it really went from seeking its identity to really finding it and acting on it, and yet at the same time, through all that, preserving the underlying values that led to its creation.
ELLIS: Yes.
VAN VALKENBURG: Very much so.
ELLIS: Different in terms of output, different in terms of deliverables, but the core values of the organization have maintained themselves, I think, from what I can see up to the 30th anniversary year this year, which is pretty special. Not many organization or companies or brands, actually, can say that.
OTTE: That’s so true.
NELSON: Well, I think for anybody watching this, I think you can see the reaction of everybody to that statement that it’s a very heartfelt one.
OTTE: Yes.
VAN VALKENBURG: Very much so.
ELLIS: Absolutely.
NELSON: …CTAM oral history are another group of old-time TAMers.
VAN VALKENBURG: Old, yes.
NELSON: I think we’ll start with you because we sort of have you seated in chronological order from your chairmanship. So why don’t you give us a sense of – you are 1989, correct?
VAN VALKENBURG: Chairman in ’89, yes.
NELSON: Okay, give us a sense of what you were doing at the time. I want to get a little feeling for who everybody is before we plunge into CTAM. What were you doing at the time?
VAN VALKENBURG: At that point in time, during that year, I was President at Cablevision Industries in Liberty, NY. I’d just made the transition from a joint venture between Time, Inc., ATC and Houston Industries called Paragon and at the end of that time transitioned to run Multivision for Merrill Lynch and GE Capital down in Greenwich.
NELSON: And how long had you been around the business at this point?
VAN VALKENBURG: Since 1969.
NELSON: Okay, so a lot of experience brought to bear. And just to set the stage, Ruth, you were…?
OTTE: 1991.
NELSON: ’91.
OTTE: And I was in the middle of my nine year tenure at Discovery as President of Discovery Channel.
NELSON: Okay, so you were right in the heart of all that.
OTTE: I had been before that eight years at MTV in affiliate sales and then VP of Marketing.
NELSON: And Chuck?
ELLIS: In 1992 is when I joined the board; I was chairman in 1996. At that time, ’92 was about two years after the Time Warner merger so I was in the process of moving from Warner Cable to the new world of the combined Time Warner Cable in ’92 when I actually joined the board. I got in the industry in 1982 with a company called Group W Cable, which David knows well from the succeeding company that picked up a piece of it in, I think, ’86 from Westinghouse. So that’s how I got started in the business. As you probably know, Group W was the succeeding company to TelePrompTer. Westinghouse bought them in 1981. So that’s how I got my start in the industry.
NELSON: Okay, so now that we have a sense of who you are, or were, and came from, let’s pick up the state of CTAM in the year 1989.
VAN VALKENBURG: In ’89 we were really in a transition from a time of an executive director and industry executive lead to a chief executive, president and a different strategy for CTAM and trying to do many new things, really a proliferation of activities, of functions, of many conferences, a major conference, a time of major growth in the industry and in CTAM. So it was a time of very rapid and in some cases almost uncontrolled growth.
NELSON: So what were some of the major changes that were implemented at that time when you talk about this transition?
VAN VALKENBURG: Probably one of the major changes would be the establishment of chapters. The first chapters were established – there were two in 1987, there were five by 1988 and there were 11 by 1989. So it was a very rapid growth of the local chapters, and that would be probably the biggest change happening is pushing a lot of the marketing ideas and peer exchange down to the local level.
NELSON: And how about in terms of just how the chapters interacted with the overall organization?
VAN VALKENBURG: Now you’re talking of one of the real controversial issues because we established actually as we looked at how do you organize this in the relationship, both the organizational relationship as well as the financial, and actually set up regional boards which I think at Chuck or maybe even before got eliminated. But the objective was to maintain a common thrust, a common image, a common philosophy throughout all of the chapters with the national organization. So there was a board driven centralization of a philosophy at the time, and financial relationship.
NELSON: And was that smooth in terms of decentralizing to some degree while trying to retain a centralized mission and purpose?
VAN VALKENBURG: That was very controversial at the time and one that a lot of to and fro, back and forth between centralization… those out in the Rocky Mountain area wanted to do a lot of their own programs, raise their own money, yet having the control back in Washington in the CTAM office. So there was that constant tension and it was going on in the entire industry of centralization versus decentralization. So it was not just within CTAM. This was really a question of what was going on in the entire industry of centralization versus decentralization.
NELSON: Authority in the field versus the headquarters.
VAN VALKENBURG: Exactly. Yes, yes.
OTTE: And also just the notion of if we do these activities locally and we pay some remittance to CTAM headquarters, then what services are they going to give us in exchange for those, which is also a classic field/headquarters kind of thing. I think we also had a concern for wanting to give them autonomy, right? To let there be imagination and creativity, yet having some kind of quality bar for what… maybe we weren’t thinking of the CTAM brand, but we were certainly thinking of a standard of expectation.
VAN VALKENBURG: Of excellence. Yes, exactly.
OTTE: Right. Of the good thinking in marketing and in cable and customer and all that.
NELSON: Can you think of an instance where this started to in fact work where you had a sense… because obviously there was this tension and at some point it settled down. Was there some instance of something that happened out in the field that kind of worked along with national and people said, yeah… Did you get to a point where you felt like maybe this idea will work?
VAN VALKENBURG: I think that really has to go to Ruth and later.
OTTE: Later.
NELSON: Did it even go as late as your tenure in ’96?
ELLIS: Well, I think the notion of, as David said, centralization/decentralization and some of the tension and a little bit of the paranoia that that creates, which is we’re from headquarters and we should maintain some control over the brand and the experience and what it is that’s going on in the local chapter. There also was some concern, I think, about the financial arrangement between the local chapters and the liability that might have for the parent organization which I think we worked through. But by the time I got involved at CTAM, frankly, the local chapters had, I think, established a lot of credibility in terms of the people that were involved in them, in terms of the programs they were running, the vitality that they created in each one of the markets, the focus on marketing that this organization created by having it decentralized that you really couldn’t do from a national scope, had really gotten to the point where people believed that it worked and therefore, I think, a lot of the natural tension sort of dissipated at that point.
NELSON: But you’re also seeing that on an operational level in the business itself?
ELLIS: Absolutely.
VAN VALKENBURG: That’s what I was going to add because through that same period of time you had the same tension happening within several companies. Cox had decentralized under my time in the very early and mid-80s, but Time Warner, or Time and Time Warner was more like into the late ’80s, early ’90s for decentralization, and so at least those two were going through the same kinds of things. Same with TCI, with Comcast, so those were corporate tensions as well, and so I think that as you get to the time that Chuck was on the board, you had a lot of the corporate issues resolved as well, and a lot more comfort with the skills, the integrity, the ability of those out in the field, in the regions, in the individual systems that we didn’t have when I was on the board and chairing it and starting the chapters in the ’87, ’88, ’89 era.
NELSON: Now the other thing that was going on when the chapters were started was the whole change in the way CTAM was itself centrally operated and run. Talk about that for a minute.
VAN VALKENBURG: Well, it was because you have the more administrative era of Lucille Larkin and Vic Parra and it was really industry executive led.
NELSON: That’s where they came out of.
VAN VALKENBURG: Where they came out. So they were executive directors and sort of following the lead of the various executives, corporate executives, marketing executives typically of the cable industry, and now in late ’87 into ’88, we bring in Margaret Durborow.
NELSON: And what was her background?
VAN VALKENBURG: Her background came from industry, but with a new strategy of being much more centrally led where you had a president/chief executive with a staff that could move a lot of programs and guide a lot of programs, whether it was HR or pay-per-view or addressability, the chapters where you had a knot of activity going on, research was another one, and so you needed that central staff, or at least that was the feeling, to control everything and to get that expertise out throughout the industry. So it went from a very decentralized kind of organization to a very centralized one as we get into the late ’80s.
NELSON: And that’s the point in time which the staff not only grew, became more professional, I’m hearing a lot of new activities – where did the money come from to make all that happen?
VAN VALKENBURG: Well, that’s a very good point. Through that period of time it was strictly single membership oriented, number one. Number two was contrary to what we see today, it was all non-commercial so there weren’t the revenue streams from the annual conference that are later available for support of a lot of the activities. It was strictly single membership, not corporate memberships, in terms of the due structure.
NELSON: So this is still carrying on the original vision of this as a professional society with individual members.
VAN VALKENBURG: Exactly correct.
NELSON: But now this structure is growing out of that.
VAN VALKENBURG: Right, and now we run into the financial problems that bridge between my time and Ruth’s where we run against some huge barriers in terms of available funding for all of the activities that are being demanded but there are not the funds for it all.
OTTE: You could see the mix right here. You have individual memberships, we were in this constant conversation of showing our value to the industry, to the MSOs, to the people paying for these memberships, and expanding industries, so you want to offer more programs that your customers perceive as valuable, right? And you move to do that in some ways that were actually very successful.
NELSON: But then you have to pay for doing those.
OTTE: But then this non-sponsorship… That was a very deeply held principle. I’m not sure exactly why, but I remember it was something people felt at the time like we shouldn’t change, right?
VAN VALKENBURG: My example is in 1989, as Chairman of CTAM and we’re in Chicago, and WGN Tribune owning the Cubs wanted to have an event at Wrigley Field and I prevented them from doing so. Warner Brothers had just issued the movie Batman and wanted to have a big party, sponsored and sent out invitations. Again, I prevented that because…
OTTE: You had to.
VAN VALKENBURG: …of the non-commercial policy that we had that this is an industry conference. This is not a convention.
NELSON: Or a trade show or… yeah.
VAN VALKENBURG: Trade show. This is sharing among peers.
OTTE: Learning together, best practices, explorations.
VAN VALKENBURG: So it was, in a lot of ways, a professional society. It was the objective not to be a… you’re right, a trade show.
NELSON: But now you’ve got these companies that are coming forth and want to take people to the ballgame, throw a party, the kinds of things we don’t even think about today. Was that still true during your reign?
OTTE: Oh, yeah, yeah. I had actually forgotten about that whole piece, but speaking with David…
NELSON: Did you have to intervene and shut some parties down?
OTTE: I don’t remember shutting any down, but I remember a lot of discussion about the pressure between having that policy and yet wanting to fund more things and not having the funds to do it simply from the individual subscriber dues, basically. I don’t exactly know how the transition happened but walking here today you can see it’s a much bigger event and there’s many very multiple strands of learning and fun events and all that, and somehow they’ve figured out the sponsorship piece in an appropriate way.
VAN VALKENBURG: Yeah, tonight’s the MTV party. Disney has a big party. You look at the floor here – I mean, it’s close to being a trade show.
NELSON: Yeah, there are exhibits. Now you’re not going to go to the party tonight and try to shut it down?
LAUGHTER
VAN VALKENBURG: No, I don’t have that authority, no.
NELSON: And Chuck, by your time, this commercialization policy really had begun to change, I believe, by then.
ELLIS: Well, it was evolving. I think there was still a real legitimate, heartfelt concern about the commercialization policy and there’s a lot to the story of how CTAM went from an organization in the late ’80s to early ’90s with a very broad agenda that drove a lot of costs that were new to the organization with a fairly flat revenue stream to cover it that made the idea of additional revenue streams through things like commercial opportunities like we’re enjoying today a pretty inviting concept. Two things happened, and I don’t want to steal any thunder from the next discussion about the ’91, ’92 evolution from not only the leadership of CTAM, but also sort of the agenda and the scope and the mission of CTAM really getting tighter in that period of time, but we really did continue to debate and evolve in the commercial policy area and we started to do things like sponsored parties, we started to offer minimum sponsorships of different parts of the convention, we had limitations on how it could be promoted, we limitations on what kinds of signs you could use for it, etc. but the notion of the opportunity is there as long as we didn’t flaunt it and as long as it didn’t get out of control, the revenue streams and opportunities to work more effectively with programmers and other vendors and operators seemed to make more sense. So we sort of dripped dripped our way over time to what you see today which is a mini-trade show.
NELSON: As that evolved you didn’t really find there was a huge resistance to these changes? Were people saying why are we having this party and how did Discovery – sorry about that – put their sign up there? Because today there are signs everywhere.
ELLIS: No, I don’t think there was big resistance. I think, frankly, the leadership of CTAM trying to honor the principles of CTAM were trying to guard the notion of let’s not let this get out of control because if it gets out of control the opportunities – because with marketing we’re in the sights of every programming service and vendors and lots of other people – the opportunities to make this a flow-through marketing machine from outside sources was very tempting. So there was a lot of demand from those that wanted to participate from a commercial standpoint. There were a lot of the members who wanted that to happen. I think, frankly, it was the CTAM leadership trying to keep a lid on it to a certain extent and yet be reasonable and practical that kept it in balance for awhile.
OTTE: I think like any event like this there’s a sense that what’s the content, what am I going to learn, are these people really on top of our industry, our issues, what we’re facing today? That whole theme has been a huge part of what CTAM has cared about and still has to and does care about, right? So it seems like that continued, this always listening and trying to anticipate the real needs of what are we facing – customer focus, competition, all those themes – and then this thing was like the frog in the water. The water got hotter and it became a non-issue it seems.
ELLIS: I think the organization has always been one that wanted to provide balanced information and not necessarily be an advocate for any brand, for any company. We certainly had initiatives that the organization believed in because the constituency believed in it and needed us to stand up for certain initiatives, but products and the services and endorsement of those at the expense of other things, even through the initial decisions about how we control the commercial policy, I think was the guiding principle on why we should go slow with that because we wanted to keep the playing field level and not provide advocacy for any particular brand or product.
VAN VALKENBURG: I’d like to add one other word to what Chuck said and that is one of the beauties of this industry, and I don’t know that there are any others like it, and that is it’s always been a collaborative industry. Even in the days of heavy franchising when you’re saying bad things about each other as you were standing before a city council, you were on the other hand, in other markets, were cooperating, and at places like CTAM, CTAM was the epitome of that collaboration and even when there were bitter negotiations between a programmer and an operator, still there was that collaboration that was there that permeates and permeated and still permeates CTAM, and that’s one of the beauties of CTAM and of this industry is that ability to collaborate and to look for best practices, to share experiences, share research and to learn from each other. That was underlying the non-commercialization policy. This organization can’t afford to lose… even with some of the parties that go on and some of the trade show aspects of it, but still you look at the sessions and it’s still very collaborative.
OTTE: We even felt that way on the programmer side because we were fighting ferociously really against each other to get distribution from you all, night and day, and also essentially for viewership as well, but I was neck-and-neck at that time with A&E and Whitney Goit was on our board. That is a really fabulous thing about… I don’t know if it’s the sense that we always felt in this business that we were making history and doing something new together, figuring things out together, whether that was part of it, or if it was just the fact of the way the franchises were that you didn’t directly overbuild… I mean, you did some, but I don’t know. Something contributed to that that is very unusual.
VAN VALKENBURG: You had something else at the time and we’ll see whether it continues, and that is by today’s standards this was a very fragmented industry because when you look at the top five companies in 1986 when I came on the board, 28% of the customers were in those five companies. TCI was the biggest with only 11%. Today you’ve got over 2/3 in five companies, two of which are direct to home, and so you’ve got a huge, huge shift in the concentration of the industry. In those days when we had… in the late ’80s and earlier, with many companies you did have a lot of that discussion and collaboration of learning from each other because there were many. So there’s a real difference in terms of the industry today versus at that point in time, and you had some very bright people coming into this industry from outside. In fact, I think probably all three of us can say that we came from outside the industry.
NELSON: Well, everyone came from somewhere, right?
VAN VALKENBURG: Somewhere else! And so we had many, many very bright, very capable people coming in, sharing their backgrounds, as well as their experiences in the industry. So all of that underlies the non-commercialization policy and maintaining that was very important to us in terms of the collaboration and the peer exchange and learning from outside the industry as well as inside.
OTTE: There’s another thing too when you think about it. You had this pretty good-size board that covered all aspects of the industry, and then you had the chair or the committee putting together the conference. So there was a huge attempt to get feedback all the time through having this wide well-balanced group putting the conference on, and the board, and then trying to listen in every other way to what was going on.
NELSON: You talked about a lot of people from the outside coming in. That seemed to be a period, because of the growth, that you’d have to bring in a lot of people. Did that really enhance the role of CTAM because the whole learning experience, the whole collaboration, the kind of relationships that people seemed to develop around the organization?
VAN VALKENBURG: This is where somebody new to the industry would come. This was the place if you were anywhere in marketing or management, administration early days, or very early days if you were in ad sales – that’s another topic in terms of spin-off of CAB – or human resources, the spin-off to CATHRA. So anybody in those various disciplines that was new to the industry, this was the place to be to learn what’s going on, what the critical issues are, and without the large corporate staffs at the time, this was the place.
NELSON: And how about CTAM’s relationship with NCTA at that time because now you’re painting a picture of an organization that is the place to be. How did NCTA feel about that?
VAN VALKENBURG: Some of the others may want to speak… I can speak for my time and my time was there was a very close relationship with NCTA at that time. We had each year CEO mini-conferences that were just for CEOs. We had 50-75 executives from the entire industry, both programming and operators, dealing with issues that were at the executive level and those were all part of the NCTA and working with NCTA, and in some of those cases we had NCTA presentations like when we came into regulation, re-regulation, syndex – those were issues that were discussed here as well. The relationship altered some, I think, as we get into later years, into the ’90s.
OTTE: I think. I recall that we had certain areas where we coordinated, but we had a concern about CTAM’s identity with the leaders at NCTA, really with the key cable operators. Had we… as we felt our way in this expansion of services and as the industry was expanding and this whole mode of optimism that characterized the times all the way through – our brands were getting stronger, our service was getting better, at least in the time that I was there – so we actually had, Chuck reminded me, we went out and talked and did research and one-on-one and kind of closed the door and what’s going on kind of conversations with several leaders in the industry just to calibrate where we were. These really hard questions any organization in a rapid time of growth asks – Are we expanding too fast? Are we really providing value? What do you need more of, what do you need less of [???] kind of thing. But I distinctly remember that our identity with them, their support of their memberships inside their organizations among the big MSOs was essential to our survival and was something we were concerned about.
NELSON: And by your term?
ELLIS: Well, even before my term because I joined the board in ’92 and the leadership of the organization, Ruth and Matt Blank and several others, were really taking a very candid pragmatic look at what the mission of CTAM had evolved to and everything that Ruth just mentioned in terms of the breadth and scope of the agenda and the initiatives and the cost structure I think led to a question in the minds of a lot of CEOs and operators, what does CTAM stand for? What is it they deliver to this industry, what is the value, what do we get for the money the individuals, and therefore we, pay to CTAM? So I think despite the fact that a lot of the new initiatives that CTAM went forward with were driven by operator and program requests to be gentle about it, the reality was it got to be sort of a mile-wide and an inch-deep in a lot of people’s minds. As a result of that, I think the relationship maybe at NCTA suffered a little bit during this time period. I think frankly it recovered nicely in the next several years and my term on the board really overlapped Decker Anstrom. Decker clearly got the notion that if the organizations work more effectively together and we took advantage of the skills and the knowledge and the capabilities that exist at CTAM, i.e. marketplace, consumer, marketing-oriented focus and capabilities, that the NCTA in its public and legislative arena could benefit, and that those two things working together would allow NCTA to be more successful in the regulatory and legislative arena, and a number of initiatives came out of that. The on-time guarantee of David’s era, which were the service standards which were certainly intended to in a more consistent manner to provide a better customer experience by having all the operators buy into it and execute and having a tracking mechanism to support that. In the evolution of the late ’80s to the early ’90s when competition really became something beyond an intellectual experience to the point at which it was a reality with DBS and the de-regulation in the early ’90s led to, I think, a renewed awareness that we needed to focus more on the customer and therefore CTAM was a very valuable ally for the NCTA as a result of that.
NELSON: Well, as we know, the industry has gone through these cycles of regulation, re-regulation, de-regulation. Where were you in that cycle and how did CTAM help further the industry during that?
VAN VALKENBURG: Well, I spanned… we were de-regulated, if I recall, in ’87 if I recall correctly, and we were re-regulated in ’92, I believe, and so my time almost spanned that era.
NELSON: The de-regulated era.
VAN VALKENBURG: The de-regulated era, preparing for de-regulation. But in my time the major focus as we entered into the late ’80s was, first of all, as Chuck said, was customer service. CTAM was at the forefront of that and that led to the NCTA putting together the committee for the customer service standards, but that really came from initiatives within CTAM. The other was original programming. That’s where Ruth comes in with original programming, with program promotion, and that time when there’s de-regulation, as rates were increased, needing to provide perceived value for the customer. So a lot of discussion about original programming, promotion of original programming and supporting the rates. That was all during that period of time.
OTTE: It was so coincidental, too, because on the network side at that time we had learned a lot more about our audiences. We knew what resonated, what didn’t, and yet we were able to dramatically increase our CPMs by having original television, and charge more for it and have a good story about it, and so there was this amazing dovetailing of both of our revenue streams requiring this, and obviously the opportunity then to differentiate your brand and build more loyalty and viewership and all that. So we created this very significant global fund for worldwide production of original television starting in ’90 at Discovery. We just upped it so dramatically and it was an amazing coincidence.
VAN VALKENBURG: And who really drove that for you?
OTTE: Our whole board supported it but John Malone was really the declarer of how important this was to own the rights and exploit them more. Of course that was the basis for our international expansion too, but what’s fascinating to me is that we didn’t end up having to come around and tell you all how much higher your rates – well, that did happen too – but in something you didn’t care about. You had the same desire, at least theoretically, not to pay more but to have better programming for this whole regulation thing, while we had to do it to… we were just beginning to get credible vis-à-vis the three broadcast networks in terms of ad sales because it took all of us time to build those relationships, tell our story, deliver the ratings and get higher amounts every year from agencies and advertisers. It’s an interesting confluence.
VAN VALKENBURG: When you look at the ratings and you’d know this better than I, but looking at some of the cable ratings in the mid and late ’80s, you’re still in the single digits. Bob Wright spoke in 1986, I believe it was, or ’87, and said, “All of cable has less audience than just NBC.” And you see the change in that that’s occurred since, but that goes back to those efforts by the operators asking programmers for original programming, obviously meaning higher rates for us, but that need to drive viewership and to drive more value for our customers.
OTTE: And then coupled with a need on our side to dramatically change our organizations. I think at Discovery and TLC we could buy documentaries in a very vibrant worldwide market and co-produce and all those, but we changed from being what was a very, very good acquisition organization to a very significant production organization and now it’s just amazing what they produce.
VAN VALKENBURG: The other thing that was happening there, and I think it’s an interesting term, and that is when you look at, especially the time of the three of us, but the cable industry went from being a cable operator on the MSO side to a media business. It really made a dramatic change, and again, this was a central role that CTAM played in that transition of bringing to light the programming and the service to the customer, but it really was a change from running a cable physically to really being in the media.
NELSON: Well, it sounds like there’s also a lot more awareness of the customer. You talk about understanding the customer better. Where did the role of research, which CTAM obviously has really become a mainstay, how did that evolve over this time period? What was going on?
VAN VALKENBURG: There were several research studies. I remember one that was critical was Family Viewing. I think that would have been right in your era, right?
OTTE: Um-hmm.
VAN VALKENBURG: Right before you came on, late in my time, of creating the Family Viewing Study. Who makes the decision and who views what, and within the home there are very different viewing patterns.
OTTE: Don’t you remember that whole thing about the remote and the guys and the girls, and the whole fight about the remote?
VAN VALKENBURG: Yes, exactly. Number one. Number two was as we moved into urban markets being very, very different from one neighborhood to another, so you’ve got that research as well, a lot of demographic research going on in terms of identifying… the easy one is the time I had northern Manhattan. Well, Harlem across town to the Upper East Side, those are very, very different markets, but when you look at a Durham, North Carolina from south to north, a very clear dividing line, again, very, very, very different markets. And again, CTAM was doing the research as an organization under the research committee of identifying those kinds of issues within the markets and that was the transition where we were also going from the classic reseller to original programming, unique programming, exclusive programming of the new satellite delivered services like Ruth had with Discovery.
NELSON: So when you were chairman in 1989, was there already a major research effort underway or was this really just beginning at that point?
VAN VALKENBURG: Just beginning. This was beginning with people like Ajit Dalvi, Pete Gatseos, others at that time who had a research bent were no becoming more senior in the industry and able to put forward research ideas that would be valuable for the industry and supported by the industry.
NELSON: But you must have brought that kind of mentality to CTAM as well.
OTTE: It was very prevalent, and the board that we had, this topic of the consumer was all we talked about. As a matter of fact, privately even in some despair about would we ever get certain MSOs to take it as seriously as they should be because a little bit behind closed doors on the programming side we’d say, “We get our report card the next day. We know did we serve our viewers or not. Did they come or not.” And this was the whole time when the industry was really working to better its service. I feel like, yes, it was very deep in the DNA of CTAM.
ELLIS: And I think in the era in the early ’90s, at least from ’90 to ’96 when the notion of competition went to the reality of competition in CTAM, we began to reexamine our mission and the scope and deliverables and how we’re going to maintain relevance within the industry and really provide value. The area of research was one that really rose up on the screen as being critically important for our members. It was one that really could be done in a very balanced way, so there were industry trends, there were consumer trends, it was not individual company research that you might be willing to share with somebody who you didn’t want to know the information, or in a public forum. I think it was Grace Ascolese – I’m sorry if I’m mispronouncing the name – who we hired as head of research and really took the whole research function inside the organization to a different level, and it wasn’t accidental because the board was driving it, the competitive forces in the world were driving it, and CTAM’s reevaluation of itself in the strategic plan we did in the 1993-94 period really pointed towards this being one of the deliverables for CTAM that would provide immense value to our users and consumers in the industry.
OTTE: Well, plus you all were in all these conversations that would strike terror in our hearts about how you ought to package services and offer these different tiers and the gold and the you know…
ELLIS: The NPTs and the MPTs of re-regulation, yes.
OTTE: Yeah, so I think there was a need to on so many levels… like remember at some of the early conferences in CTAM in our eras, somebody would have a big piece of research, like Ajit had once or maybe Jerry, I can’t remember who, Jerry Maglio, would share that, as you said, just to more deeply understand how to market and sell pay, basic, expanded basic, all that stuff. So, it was definitely the theme of the times.
NELSON: You talked about this as strategic planning around ’93. Did that come about – you mentioned competition, but also you had the re-regulation, so the marketplace out there changed drastically. Is that what led to that?
ELLIS: Absolutely. I think it was a recognition coming out of the ’80s and in the early ’90s that the world around us was changing, and it was changing in the form of real, on the ground, well-financed competition had moved beyond the intellectual experience to reality. DBS had launched, I think, by ’95, ’94, somewhere in that time period they were a million, million and a half, moving to two million within probably another 18 months after that. The telephone companies were not only talking about what they were going to do because of the re-regulation/de-regulation of the industry, depending on how you want to look at it, and so there were a lot of real marketplace forces at work. And I would say also Char’s tenure had begun in 1992, a very smart woman, very in tune with all the constituencies of the organization and the industry, and was able to help. And I would really give credit to Barry Elson’s strategic plan that was done, I think, in ’93, ’94 that really helped us to understand how the world was changing, how the people who sat around this table are forming alliances with what would be viewed as head-to-head competitors probably unwilling to share information they previously would be willing to share, and unwilling to sit in public forums large or small and share research data about how their NPT or MPTs were performing because they didn’t want competition to see it, did not want to talk specifically about how their pay-per-view business was responding to certain marketing and offer tactics because they didn’t want to share it with potential competition. So CTAM really said, okay, in the midst of all that, what do we do, what do we become and how can we provide the most relevance to the industry, and what it has evolved to is really research being an absolute core value of the organization. The notion of providing outside information and expertise to the industry through conferences really took on a lot of top spin in the early ’90s, and I was looking at some of the conference speakers in the early ’90s and the mid ’90s and in 1992 in San Francisco, which was sort of the beginning of the notion of reality of competition, the first three sessions were devoted to quality of service. Darryl Hartley-Leonard, who was president of the Hyatt Corporation, talked about… it was sort of the early days of CRM, Customer Relationship Management, and what kind of databases they used and what kind of company culture they created. Len Berry who had written a very interesting book on marketing and service strategies was the second speaker that morning. And Bill McKnight of Alaska Air, who had always been viewed up until one of their engines fell off when they went in the ground for the first time after that, as being a company that had separated themselves from a competitive landscape because of a high quality customer experience. They were the first three speakers. Now, if you went back, I suspect, eight or nine years into CTAM’s history that just wouldn’t have happened, and it wouldn’t have happened because the reality of competition wasn’t there. We deliberately structured conferences, we deliberately structured the deliverables to the organization. The committees on CTAM changed as a result of that, and we really evolved to what we felt were marketing skills development and education as sort of being the core mantra and mission of CTAM, and from that came things like the CTAM Advanced Education Seminar which is now, I think, close to ten years old, and research projects that again added value to the brand and added value to the members. The CTAM Probe was initiated during this period, which really helped the industry share information about new product trends, new revenue opportunities in the industry. So there was, I think, a conscious decision by the organization to evolve its mission from small rooms and large rooms filled with people sharing very precious information and data about how their business was performing to one that could help them industry by example from outside companies and outside industries and best practices to be better marketers and be better strategic marketers, better tactical marketers, and that’s what I think we experienced in rapid form during the ’90 through ’96 period that I was most actively involved.
NELSON: During your tenure did CTAM have the same kind of strategic focus? You’re shaking your head no, so…
VAN VALKENBURG: No, no, no, it was not, not at all. It was much more inward focused. There were warnings of potential competition coming, and we saw competition for the viewer in terms of the videocassette, the broadcaster, those were the competitors up through the end of the ’80s. There was, as I say, the potential of telephone companies coming, of DBS, of MMDS – it was MMDS in a few markets – but it was one of preparing for competition, but there was not the urgency of it that especially in Chuck’s time experienced because it was real. And so it was much more, as I say, almost inward focused in my time of customer service. Customer service was more one of growing the business because a satisfied customer would stay, and gaining the reputation, and also maintaining quality service in order to gain and then maintain deregulation, de-regulated rates. So those were the driving forces for the conferences at that time. Then we got into program promotion with increasing, again, customers and increasing ratings during that time.
NELSON: Now, Ruth, when you came in, obviously de-regulation had occurred; we hadn’t gotten to the re-regulation. I’m trying to keep all these straight. But of course you came from, and you mentioned this earlier, a place where competition was just part of your life. You’re competing for these channel slots, and hey, we want to have another channel we’re going to launch, we’ve got to get a slot that maybe somebody else doesn’t get. Do you think that the programmers, and you weren’t the first, I guess John Reardon was the first…
OTTE: The first programmer, yeah.
NELSON: Do you think that you brought a different dimension to CTAM because of that kind of a background of you’re scrambling in the marketplace?
OTTE: I don’t know, it’s possible. I think we felt very intent upon insuring that the operators understood what our programming was, what made it different, what was special, what was in the pipeline. So I distinctly remember that, and certainly when the Nielsen ratings got quicker so that literally the next day you saw what you did and the demographics you delivered were more rapid so you could really get your report card in terms of what you were selling to an advertiser – I don’t know, it just always felt like an extremely competitive business to me in that sense. We had to earn our place on their dial, increase our sense of their perceived value of what we were offering vis-à-vis the rates we were asking, and there’s just no joking around about the Nielsen sample. You either got your rating or you didn’t, and you had promised that to an advertiser and you had to either do make goods or… right? So, I don’t know. Now I can only imagine how it feels in terms of that, but with all this new media…
NELSON: You were competing for the eyeballs so that was always there as a programmer.
OTTE: Right. We were having our own internal stories about who were we, what was our core promise, how much could we go off of that to get a rating, right? You could put on lots of shows but that wouldn’t be a Discovery promise, right? I don’t think that was unique to us. It’s the notion of your brand, how to be true to that and still have a sizeable enough audience that you delivered and built the business.
NELSON: I think another innovation that came up during your time period, if I’m not mistaken, was the Mark Awards had kind of existed at that point but it became much more solidified, the name was established.
OTTE: You know, to me the Mark Awards would probably be the most interesting thing to watch in terms of the evolution of the sophistication and professionalization and innovation of this industry. Just think about what we thought was a great campaign in 1986, right? And now look at what the MSOs invest. It’s so remarkable the caliber of work that’s come out from here. I guess I feel like the huge gift that I had was just growing up at MTV because even in 1981 the song was super serve a niche audience – know them deeply, super serve them, right? And that’s still the basis of their business.
NELSON: But it was a radical notion at the time because of super-serving, both the super and the niche.
OTTE: Right, because the three broadcast networks were the antithesis of that and they were disdainful of us and thought we were crazy.
NELSON: And they didn’t really super-serve anybody. They just threw it out there for everyone.
OTTE: Right.
NELSON: I just want to follow up more about the Mark Awards. Where were they at…?
VAN VALKENBURG: They were just barely beginning. It was almost tabletop newspaper ads. It was really simple during most of my time. Very little, in fact, I don’t know we had much cross-channel promotion. That was an issue that we started to talk about during my time was on-air promotion of individual programs, but that evolved between my time and Ruth’s.
OTTE: That evolved quite a bit in my era because we started to produce these amazing expensive kits every month to show you all we were doing, and these much better videos that you could cross-promote, try to enroll you in that, and our own consumer marketing budgets were going up dramatically at this time.
VAN VALKENBURG: Well, setting the standard of asking for 20% of your available spots, being for cross-channel promotion that happened during my time. Now that was radical!
NELSON: Was there a lot of resistance, I assume?
VAN VALKENBURG: Absolutely! Much resistance.
NELSON: You want what??
ELLIS: Still to some degree there is some tension involved in that today.
VAN VALKENBURG: But with what Ruth was saying in terms of the kind of product that the promotional spots we were able to get and putting those on, those had real value and they had the quality consistency as well, which we hadn’t had as a, back to my previous statement, cable operator. That was a transition, again, getting us into the media era.
ELLIS: As real media players.
OTTE: I think you all started to hire agencies… Wasn’t that about this time, in the early ’90s when you…?
VAN VALKENBURG: Sure.
ELLIS: Again, I don’t want to overdue this notion of the explosion of competition, but frankly I think what it did was to unify the CTAM board with the notion of this is real for everybody that sits around this table. Every programmer that sits around this table has new threats every day coming online, the introduction of new programming services and new niches were coming.
OTTE: There were so many new channels, right.
ELLIS: They were coming off the end of the line almost monthly, and therefore the programmers were faced with it. We were faced with telcos, we were faced with DBS, we were faced with alliances and partnerships that were being discussed and we thought were going to be real. So the notion of setting the table and the agenda around what can we do to help this industry be better marketers, be better strategic marketers, to know their customers better, to vest themselves in the customer experience and apply their resources to that, and what role CTAM can play in that was, in my experience with CTAM, one of the ah-ha moments for the organization in terms of unifying the board and setting the agenda for what the organization was going to do. The 1995 conference that Josh and I shared was “Wake up and smell the competition”, which was the coffee cup notion in San Francisco. We had huge branding companies – Brandon Tartikoff and Jamie Kellner, who was just building the brands, which worked for programmers and worked for us, the notion of if you’re going to survive in the marketplace you’ve got to create a unique, memorable leave-behind from the standpoint of how a customer responds to your brand, and we need to get that and we need to understand how to develop it and execute it and tactically stay against it day in and day out. That was consistent for programmers and operators during that period of time.
NELSON: But it was new to operators, the idea of …
ELLIS: It was new to operators and I think there were folks that came from outside the industry in the late ’80s that understood it because they came from kind of classic marketing branding companies. Charlie, I think, was one of those, Charlie Townsend. And I came from the fast food business. I’d been in the fast food business for 11 years – dog eat dog. Somebody opens up down the street and they take 60% of your revenue tomorrow morning. So my engines are running in this competitive era and I’m trying to see if everybody else is as excited about it as I am, and fortunately the reality of competition moves people down that path. The notion for many folks of really understanding what branding was, that it wasn’t just an advertising campaign.
OTTE: Right. A slogan.
ELLIS: It’s how you do business and what the customer sees and experiences consistently day in and day out with you – this was new to the operators, and frankly I think the industry is still learning what that really is all about and how to execute it and how to discipline yourself to stay against it. Brands don’t get built in six months and 12 months and 24 months. They get built with continuity over an extended period of time. So I think it’s still a learning process but I think this was a period in CTAM’s development and the industry’s development that was really vital to understanding real competitive marketing strategies and tactics and the notion of branding and differentiation.
VAN VALKENBURG: I think there was a quote from Jeff Greenfield in 1989 that I thought sort of captured what happened in terms of the maturation of this industry. It went from being really in human experience a child to suddenly an adult and learning how to live in that world, and that was in five years, up through ’89, cable going from a David to a Goliath and that growth that happened, but what wasn’t the case is we hadn’t matured. We hadn’t learned all the lessons of what it is to be a big boy in the media world and that’s what you see when you look at the years between my time and Chuck’s, and even to today, is that maturation that was happening because in my time it was very clumsy and that’s what led to the re-regulation in ’92.
OTTE: And one of the things really to Margaret’s credit, she was just ferocious on that point about the customer.
VAN VALKENBURG: Exactly. Margaret was, absolutely.
OTTE: She was really very concerned about the implications if we didn’t as an industry, and I think a really good spokesperson for that.
NELSON: About trying to avoid that result.
OTTE: Just being serious about… what she felt, I think, and I think the organization felt was a certain responsibility to promulgate this and make this real in the industry, to do everything that we could, anticipating whatever future competitively from a regulatory or political standpoint. And because it was just the right thing to do to build a good business.
NELSON: I did mention the Mark Awards a little bit before – when did that get elevated in prominence to it became at one point a great big spectacle, in fact, and it still is obviously a very important part of the event.
OTTE: There was always a debate about when to schedule it so that people would come, so that the people who had worked so hard to do all these campaigns got their recognition. So marketing within these companies, we would try to make MSOs come. Do you remember that? Attend, so they would see the good work that their marketing people had done.
VAN VALKENBURG: I attended part of last night’s. Talk about professional. This is really professional. It is a real media presentation and the quality in what I see coming from Comcast is as well. But it is a different world from when … at least in my time it was tabletop, as I said, to I don’t remember yours. I don’t remember yours, how it evolved once it got to you, Chuck.
OTTE: Well, we started to get outside talent, remember? Certain networks would offer up a well-known host or something. That was one transition in our time.
ELLIS: More professional production to support the presentation, a little more discipline in how it was done.
OTTE: And how it was judged.
ELLIS: And how it was judged, also. But I recall in that period, even before I was chairman, that it moved fairly rapidly in terms of how well it was done and the exposure that it got. We always did wrestle with where in the conference agenda do you put it because you want a lot of people to see it and the people who did a great job to have a lot of people clapping for them. They may have solved that today, I don’t know, but it was always a struggle as I recall.
NELSON: But part of it then was obviously to recognize the work that people had done, but it also was a bit of marketing on behalf of CTAM itself by letting the world see that, hey, this marketing stuff is real and we need to be doing it.
OTTE: Yeah. There was some period of time, I hope this isn’t too ungenerous, but it seemed like a lot of the top, top leaders of MSOs had come up not through marketing, they had come up through other disciplines in engineering and other things, and so just like we all are a product of our experience to get them to truly, authentically see the importance of this and value it was a bit of a missionary zeal that we had in the early… in the time I was here.
VAN VALKENBURG: Just as a commercial for The Cable Center, I believe that at least all of the winners of the Mark Awards are in the archives there at The Cable Center, so just to put a plug in for The Center as well.
NELSON: And for the winners.
VAN VALKENBURG: And for the winners, exactly.
NELSON: Who have now been immortalized and aren’t merely highlighted for the day, but immortalized.
VAN VALKENBURG: I don’t know whether it was all the entries but certainly the winners are all there at The Cable Center.
NELSON: You know what I’d like to do at this point because we’ve been talking for a long time, is maybe just kind of characterize what went on with CTAM as kind of a wrap-up from… this is rather a great transition really. We’re only talking about from your tenure to yours is only seven years but when you look at …
OTTE: It’s so dramatic.
NELSON: It’s huge.
VAN VALKENBURG: Huge. It is huge.
NELSON: So just take a crack at kind of wrapping that up. What went on with CTAM in that time period?
VAN VALKENBURG: I would characterize it – my time – of trying to discover its identity. What is CTAM? And we went in a lot of different directions. It was a proliferation of activities, of conferences, of training programs, master courses, sales manager training, pay-per-view, human resources, research – it was just a proliferation and so it was one of trying to determine what is our identity and what is CTAM and marketing and administrative activities, what is the role within the industry? So it was a struggle for identity in terms of my time.
OTTE: I would say somewhat of that same struggle…
NELSON: Still going on a couple of years later?
OTTE: Yeah, but in this context of wanting to really, really serve this industry and also empower the industry to not just give lip service to customer care, but be it and do it and realize it and budget it and do all the things you have to do to make something real in an organization. I think our identity crisis, and then there was a transition of leadership out of that enquiry of have we gotten too big, what should we really be focused on, and then from there you all went into that strategic planning process, right?
ELLIS: I think the two big catalysts for us were Char Beales and the competitive marketplace in terms of what shaped the ’92, ’96 and I think beyond, and it allowed the organization to really sharpen its focus. I think it allowed the board to be more cohesive in terms of what we should be doing and why we should be doing it, more consensus around the deliverables, i.e. education and research and skills building and so forth. And Char’s leadership and her ability to build consensus through lots of different points of view held very strongly by individuals on the board, and she was great at networking and still is, beyond just the board at CEO levels and other senior levels within the industry. There was a real gelling and a feeling of solidness about what CTAM was all about and what it could do and that it could make this transition from trying to define itself to a little bit of a malaise to the point at which it was really delivering consistent value to its members and to the industry and had a lot of respect in other organizations like CTAM because of that. I think all of those things together are one of the reasons why the organization went from 2,800 to almost 5,000 from ’92 to I think 1996. It almost doubled in that relatively short period of time. I think the organization sort of got its legs and got its confidence and felt good about what it was doing and set the tracks down strategically. I think one of the other important things that was done was there is a strategic discipline inside CTAM that was started I think then that remains today that just does a very pragmatic look at where the world is, where the industry is, where CTAM is and therefore what should we be doing for the next two to three years to support that. Mixed in with all of that, fortunately, and I’ve sort of been close to the organization even up to the most recent years, I think there remains a level of openness and mutual respect and ability to work things through within this CTAM organization despite the fact that competition has become white hot that is pretty unique and pretty special. May that always continue, and I think you really have to give credit to people like Gail and Greg who created those values to begin with, which was open sharing and mutual respect and if we work together and do it honestly with the right motivations, we can work through just about any situation.
NELSON: So it really went from seeking its identity to really finding it and acting on it, and yet at the same time, through all that, preserving the underlying values that led to its creation.
ELLIS: Yes.
VAN VALKENBURG: Very much so.
ELLIS: Different in terms of output, different in terms of deliverables, but the core values of the organization have maintained themselves, I think, from what I can see up to the 30th anniversary year this year, which is pretty special. Not many organization or companies or brands, actually, can say that.
OTTE: That’s so true.
NELSON: Well, I think for anybody watching this, I think you can see the reaction of everybody to that statement that it’s a very heartfelt one.
OTTE: Yes.
VAN VALKENBURG: Very much so.
ELLIS: Absolutely.
