Turning off Cable TV —-
When do you make a decision to stop providing a service?
Ashland Home Net has been a CABLE TV, Internet and Phone company for nearly two decades.
I remember going to my first CABLE TV conference. I’m from the tech world, so I’m used to big lavish trade shows, but this was something completely different. This felt like a million SQFT of crazy. They poured cocktails at the Disney booth, before noon. Booth babes were not for hire by the day like they are at Tech Conferences but actual employees of the channels with 401Ks. And you had to have appointments and meetings to buy content, not just wander through a booth. I was blown away. I was invited to sit with the Kardashian’s on a couch for a photo op after one meeting (I had no idea who they were), and the young and beautiful cast of G4 called me a virgin when I wandered by to say hi to let them know I loved their show. What a weird experience that was. I’ll never forget it.
It is kind of cool owning a small company that competes directly with multi-billion dollar companies, I won’t lie.
Ashland Home Net does it against Charter/Spectrum and Project A has done it over the years against IBM, Microsoft and others.
Ashland is a small town and we provided a service that competed with and was a choice with Charter/Spectrum. Over the years they played hard ball, sending door to door sales teams out to our customers telling them we were not a local company, or we were going out of business. They once bought billboard space telling commuters to switch from us. The problem was Ashland doesn’t allow billboards and they bought it in the town next door, where we don’t offer service. I loved that. My customers posted pics of how silly it was on FaceBook.
Ashland is a funny place for many reasons. One quirk is how much churn there is. Because the city owns the electric department they report how many disconnects and connects they do. Almost 25% of Ashland, yes it’s a college town, but this number doesn’t include those transients, disconnects and connects power every year. This is a move out, move in event. This is churn. With so much churn, you lose customers and have to win back the new one. It’s a constant battle and we do pretty good.
Our office is downtown and we have a good reputation, so if the new person asks a neighbor we get a good share of recommendations.
But over the last several years we noticed that more and more of our new connects did not want CABLE TV. The “kids”, that’s what we called them because a majority of our customers were over 65 at one time, didn’t watch TV, they streamed it. These “kids” just want internet, not CABLE TV.
We kept an eye on the business and intentionally let it become a loss leader when the number dropped and dropped every year.
We bought all of our content from a single co-op except for “local” channels and we hired Randy, a top notch cable operator when Charter/Spectrum went digital and laid off their local crew years ago. Randy kept the operation going and we didn’t have to worry about it much. It was just another service we offered.
We have had loyal customers that have been using our services for decades, so I never wanted to do anything that would disrupt or upset them. Ashland is a small town. Many of our customers are our friends.
But when COVID happened everything changed very quickly as we all know. The dependability of the internet and speed upload became the most important thing and the channels started to move 100% online with their own streaming products and content. Hulu and Youtube TV became more popular and added local content. People that were loyal CABLE TV customers were cutting the cord.
Instead of breaking even on CABLE TV, we were subsiding it to stay afloat. Dena and I struggled to find ways to make this work, but we did.
Then in 2023, the COOP we bought channels from went bankrupt, overnight. It seems that this “cut the cord” movement was happening everywhere. Not only did it go bankrupt, they did not pay the channels for several months as they bled to death without us knowing about it and the channels came after all of us directly for back payments. We made payments to the COOP in good faith but as they struggled they didn’t pass the payment on to the channel. It was a mess.
Channels are run by giant corporations. They hire beautiful people to serve drinks, make appointments and take your photos with the stars, who are also beautiful, at the tradeshows, but they also hire ugly people. The lawyers they hire are ruthless. They are mean. They are just not nice humans to deal with. So instead of dealing and negotiating with one entity we had to deal with several. It was not a good experience.
They don’t care how small your company is. They don’t care about your aging customers that don’t like change. They don’t care about your dwindling customer base. They don’t care about a win/win. They just want you to sign contracts and pay. We needed time to rework a business model that would work and negotiated to stay month to month until the end of the year.
That’s when Randy let us know that he wanted to officially retire in January 2024 and join his wife who retired in 2023.
So Dena and I poured ourselves a big glass of whiskey and sat down feeling defeated.
She has been telling me for the last 3 years that this was going to get worse and she was right. I held on because I wanted to take care of our aged customers.
In my mom’s final years CNN was her 24 hour a day lifeline.
We tried negotiating with the channels and they basically forced our hand. Across the board they told us to sign a 3 to 5 year contract with escalations or get out of the business. They didn’t care. We fought hard for 6 months, hoping to find a solution, but we couldn’t. I lost a lot of sleep worrying about my friends.
But we couldn’t find a way out, so we made the difficult decision and started the process of stopping the provision of CABLE TV service.
The truth is that we are a profitable internet service provider that was losing money on CABLE TV. Without the weight, drain and operating loss of this service, we would be even stronger.
We let the customers know with an email 30 days out. Dena personally called people that we didn’t hear back from as we got close to the date. When you only have a couple hundred customers, it’s easy to do. Not pleasant, but easy.
We posted the same email on our website with a front and center link to it. It’s still there. We try to be a HOT company. Always Honest, Open, and Transparent.
We let the city know, as they are our business partner. They own Ashland Fiber Network of which we are a reseller.
We had lots of meetings internally and externally.
I serve on a local community bank board and we made a difficult decision earlier this year to close the home mortgage division. I watched closely how they went through that process and tried to keep calm going through my own.
We offered free demos and classes in our office on streaming HULU and YouTube TV. We set up a relationship with the local Dish reseller to transition folks to Dish if they wanted to keep the remote and the old way of changing channels.
But the writing is on the wall. We will all be streaming TV soon. We are rolling out fiber to the home soon and when fiber is how your home gets internet there is no CABLE TV. It’s all going to be streaming.
The large CABLE TV companies are providing streaming boxes to combat this.
I remembered when the YMCA stopped providing daycare services and we all scrambled to find a new day care service. We survived that. Our customers will survive this, I kept assuring myself.
The immediate flood of responses was very positive. Many people said they had our service just to support us but never really watched TV and they wondered what took so long.
But a few took this as a personal attack and let me know how stupid I was, or how pissed off they are. Some went on social and posted that we were going out of business. I got hate letters about how they couldn’t believe that we picked college playoff and NFL season to do this. They were pissed.
The day of the disconnect came and went. Randy shut it all down. Some people that were shocked called and we talked them though it. Some were pissed and some were understanding.
We learned a lot about the process for next time if there ever is a next time. Since this was our first time, we made a couple of mistakes.
One of the biggest mistakes we made was not telling our non CABLE TV customers what was going on. We focused so much on the CABLE TV customer that was affected that I didn’t think the non affected customer would care.
What I didn’t count on was Charter/Spectrum sales people knocking on my internet customer doors and in telling them they were going out of business and convincing them to switch right then and there so that the internet would not go down. We didn’t catch this until 4 elderly customers called us to let us know that they were switching internet service providers.
What I didn’t count on is social posts from non customers talking about our business.
In some ways the last 6 months of 2023 were hard on me. I nearly stopped posting on social. I just shut down. I should have done the opposite. I should have shared my journey. But I didn’t want Charter/Spectrum to win. I didn’t want to let my customers down.
I took this too personally. In the same way I got hate mail about football games, I did the same thing. I internalized my angst and my fears and I pulled the cover over my eyes.
It’s over now. We made it through it. Our company will be even more financially stronger now. We have plans to start reselling AFN’s fiber to the home in the spring. I’m focused on marketing and growth.
So I’m writing this with hopes that if you run a small business and you have loyal customers that are your friends, you may have to stop providing one part of your business which will impact them and upset them but you just need to do it. Don’t wait as long as I did. Don’t subsidize something just to hold on to it. Shut it down and move forward and move onward stronger because if you don’t, you might just collapse the whole company and that would be stupid.
What part of your business can you get rid of and make your business stronger? I’m looking at all of our companies and asking the same question.
Epilogue. NFL has 4 playoff games this weekend. 1 of them is streaming only. That’s a first but not the last. Next year it might be half and the year after that all of them.
The internet is the most important utility after electricity, water and sewer. It’s important. It empowers us to improve our lives. When CABLE TV costs more than all of your utilities combined something is wrong. The channels don’t care. They raise rates every year.
We have a vacation home in Redmond. It uses TDS (formally Bend Cable) for internet. We pay more for internet only there than we would in Ashland. As I’m writing this, Dena handed me a piece of mail she got from them. If we add CABLE TV+ to our internet we will get CABLE TV+ for $59 and Internet will increase in speed to 1 gig and reduce in cost to $59 for life. The fine print is $59 for life is internet only. TV will return to normal prices after your first year and go up year after year after that. You also have to pay $6 a month for the box rental.
Someone has to pay for the beautiful people taking photos of the Kardashians on a couch.