TORONTO – The whole Rogers Communications campus is rather wrapped up in four little letters these days: VOIP.
Both 333 Bloor St. E and One Mount Pleasant are buzzing as the company gets set to launch its brand new voice over Internet protocol product in July. It’s the latest addition to the Rogers bundles and adds a crucial fourth tentacle to the company’s wireless, video and data offerings.
What’s newest about this product is that, according to company CEO Ted Rogers, one option will combine the wired and wireless phone. Think about it. One handset that acts as your in-home phone when you’re under your roof, using Rogers Cable’s network for calls, and then can also seamlessly become your mobile when you go out, using the Rogers Wireless network.
But will customers want this? Will they want it all from Rogers? Will they be able to understand it? What kind of marketing and training muscle must be put in place in the back office for reps already selling video on demand, digital cable, high speed Internet and the company’s newest service, TV to the cell phone?
Last week www.cartt.ca’s editor and publisher Greg O’Brien asked Rogers Cable president and CEO Edward Rogers to expand on a few of these questions. What follows is an edited transcript.
Greg O’Brien: I’ve got a Rogers wireless phone, I’ve got Cogeco Cable, Bell Canada now as my telephone provider and Cogeco high speed Internet. How do you convince customers like me – in your territories of course – to switch to Rogers for everything?
Edward Rogers: I think there are a number of reasons… customers like to deal with one company for their services, with everything on one bill with one customer service rep. The technician who comes into your home can deal with all of our products. It’s ease and simplicity for the customer.
We give the customer extra benefits through the better choice bundle program where if you buy two or more Rogers products and you commit to us for two years, we’ll lower your bill by 15% every month. And that has appeal. Customers like if they commit to you as a company, that you’ll give them back something as they increase their spend with (Rogers).
GOB: From the back-end point of view, is it difficult to train the CSRs to be able to, on one hand talk about wireless, and the other talk about bundling your TV service in?
ER: As customer service reps have to learn more there are challenges with that. Obviously you segment your call centre, when a customer hits for a specific issue, we’ll have a better sense of what that is through the VRU (voice response unit) and give them a rep that is more specialized in what they’re looking for.
It’s not that tough and we’ve been doing this for years with cable and Internet and through VIP and other things, working with wireless and offering integrated service for quite a few years now.
GOB: Is the main sell to the customer primarily price?
ER: I’d say there are a number of things. The price through the better choice bundles is attractive, obviously. The convenience of one company on one bill with one person who can help you for everything is appealing and we believe we have very competitive products in the market – the best high speed Internet product in the business, a television play through Rogers Digital Cable that can’t be matched by satellite, the broadest wireless reach across Canada on a platform that offers more choice on the handsets than our competitors.
The ability to provide strong (customer service) will be increasingly important to why a customer chooses a company and keeps with that company. Being able to solve their problems right the first time, being able to come to their home in a three-hour installation and service (window) – I think you’ll see service being an attribute that is more important. It’s something that Rogers can do well and Bell does well, but if you look at some of the single-product players out there, without a strong service element, it makes it harder for them.
GOB: I had such a bad experience with Sprint when I moved last year that when I had two business lines put in my office, I switched back to Bell.
ER: We’re going to have to get you to switch again.
GOB: I’m in a Cogeco territory for now. I guess you’ll have to get in touch with the Audet family about that first…
ER: Cogeco will be offering a product, I’m sure.
GOB: They already do in some areas, but not in mine just yet.
One of the main advantages cable maintains over satellite are the video on demand and SVOD components of the service, married with HD. How frustrating is the lack of Canadian HD content that’s currently out there in the marketplace?
ER: There are two challenges with customers. One is to better educate them what, exactly, high definition is. You have a number of these customers who have bought these televisions and used them to play their DVDs at home and get a good picture quality because they’re good televisions.
But we have to educate them that they need a receiver in high-def to get actual TV shows in high-def. That’s something you’ve seen us in the market a lot the last year and a half and actually pushing that awareness.
Obviously the more content that’s available the better so the customer gets better value for their money out of it. I’d say it’s something that’s evolving faster, generally, than people probably thought. I think we can do better and the big Canadian broadcasters are working on some Canadian-only shows in high definition as opposed to mostly American shows.
You’re seeing some leadership from TSN and Rogers Sportsnet in that area and I think you’ll see more coming on line.
GOB: The offerings from the Canadian over-the-air broadcasters is still pretty light.
ER: It is, and customers want more.
GOB: How are VOD and SVOD faring in the marketplace?
ER: It’s going very well… we look at it as three things. One is a new source to generate revenue and profits in the future. The second is we have a free on demand area that has about 200 hours of content on there a month (where all Rogers Digital Cable customers have access). The third is to differentiate ourselves from our competitors and you do that through on demand.
With TMN On Demand, there will be a lot of satellite customers that watch TMN and are very into TMN – and to be able to say to them that you can watch the good movies on satellite when they broadcast them or with Rogers Digital you can watch those shows whenever you like, as many times as you like, it’s compelling.
GOB: What are the on-demand buy rates like these days?
ER: For TMN customers, it’s part of the package and we’re seeing a very high take-up rate. Over two-thirds of TMN customers use the product on a recurring basis. We launched a Treehouse SVOD package and if you’re a tiered customer and a digital customer, you get that as a part of the package.
In the on demand service, we have over 2,000 titles available and growing. And, we’re trying to explain to customers that it’s more than just movies. It’s television shows, it’s children’s shows, it’s biographies and more.
GOB: Are the (movie release) windows shortening at all?
ER: No. And, I don’t think you’ll necessarily see that for a little while. You look at the movie houses, they would like as many (sales) channels as possible as opposed to one new channel just replacing another. You look at the video store business, and I think that equates to over half the revenue for the movie companies, yet they haven’t taken out going to Famous Players and others for the first viewing.
I think you’ll see that (system) being kept (but) from time to time people will be able to buy better windows for a different (revenue) split. Everyone’s got an opinion on the subject, but I would hope that where it goes – and it will depend on the rights issues – is that… you take the most-watched television shows and then have an on-demand portion to it. So if you get hooked on Biography on A&E, you can go into on-demand and get a wealth more that you can watch – maybe some for free, maybe some that you pay for – as you’ve seen HBO do with some of their series. But over time hopefully, some of the big television series that are out there customers could get some of the older seasons and buy some of those shows.
GOB: Do you envision a time where you might offer a first-run movie on VOD, where it’s appearing at the theatres, too, but say for $25 or something, people would be able to stay at home and order it on demand rather than go to the movie theatre?
ER: I think you may have one-offs. That’s possible. But in terms of a major shift, I don’t see that.
GOB: One of the other issues of late is the fact that cable and satellite companies have been raising their rates over the past while. Is that going to continue? Is there still room for additional rate increases?
ER: When you look at cable television and high speed Internet, it is still by far the best value for money that’s available for customers. Look at a family of four going to the movies on a Friday or Saturday night, paying to park their car, buying tickets, to enjoying a drink and maybe something to eat, they probably are spending a full month’s worth of a pretty good cable package.
I think there’s the ability to continue to enhance the value that we offer, and to have customers pay a little bit more for things over time, but it’s a competitive environment out there and people can’t do things in isolation from what else the customer can choose. I think you’ll see rates continuing to move up, probably not to the same degree they have over the last five years.
GOB: Have you heard anything on the Bell front, now that they have their cable licenses across Southern Ontario and Quebec, about them moving to launch?
ER: The analysts ask this a lot and we’re in an area where we’ve been competing against Bell for six years. When MTS overbuilds Shaw in Winnipeg, it’s a new competitor for Shaw. When Bell over-wires some buildings or maybe goes farther than that, it’s not a new competitor because you can buy Bell ExpressVu today.
Bell’s a very competent company and a very good competitor, but they are today and if they have another path to get to a customer to offer them service and it makes sense for them, then I’m sure they will – but they’re still going to be our competitor with or without that.
GOB: Rogers also recently underwent an ad agency review, correct?
ER: We’re in the midst of that.
GOB: I was curious though, of the main difficulties when it comes to marketing Rogers Communications and what it has to offer in a coherent way for the everyday consumer to understand.
ER: It’s definitely a challenge, especially when you’re launching new things, to educate all of our customers to what they are and the value that we bring them. Increasingly, we’re trying to improve our skills there and you do that through some mass-market means, but mostly on a direct basis with customers. You include it in their bill, or as a separate mailing or e-mail to customers.
You talk about it when they call you or if there is a technician in their home. It’s something I think is a challenge but I think we’re learning how to do a better job of it.
GOB: So nothing specific has come from the review on how Rogers might market itself differently going forward?
ER: Nothing yet. We’re still going through the process to pick a new agency.
GOB: Because further, you’ve added television to the wireless phone for example, which is something else that for some, could be confusing.
ER: You have to articulate to customers what you’re selling and we try to make it as simple for customers as possible. Of course, customers want to use different products for different things. There are different rate plans in wireless for a reason and that’s because customers want to use their phone in ways that meet what they need.
When we talk to a customer, we’re pretty good at putting them through to the right package.
GOB: I wish I could ask you about specifics about voice over IP, but the target for launch is still July, correct?
ER: It is. What we’ve said there is we’re going to be rational in our pricing and we’re going to offer customers incremental value with our better choice bundles.
