BROADBAND COMMUNITIES is the leading source of information on digital and broadband technologies for buildings and communities. Our editorial aims to accelerate the deployment of Fiber-To-The-Home and Fiber-To-The-Premises.
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8 | BROADBAND COMMUNITIES | www.broadbandcommunities.com | AUGUST/SEPTEMBER 2014 PROVIDER PERSPECTIVE M ichael Lewis, in his 2003 book "Moneyball," described how the Oakland A's scouted talent, made trades and assembled their team. Tey used an analytical, evidence-based approach, called sabermetrics, to identify hidden, low-cost gems. Te A's general manager, Billy Beane, was a master of this new approach, which was essential to his low-budget club's success. Historically, general managers of baseball teams looked at batting averages, runs batted in, stolen bases and so forth to determine the value of a player's contribution. However, using the old model could cause a team to overpay for a home-run hitter who never hit home runs in the late innings of a close game. Te goal for Billy Beane and the Oakland A's was to feld a very competitive team while having one of the lowest payrolls in baseball. Because Oakland is a small market, the A's spent just $41 million in 2002, when moneyball was developed. For perspective, the New York Yankees spent more than $125 million. Tus, every payroll dollar mattered; teams couldn't aford bad contracts. Te moneyball approach uses new ways to analyze prospects and evaluate existing players for trades. It has worked very well for the A's, who have consistently been in the playofs, even with one of the lowest budgets, and today nearly every major-league baseball team has adopted it. RUNNING THE NUMBERS Why does this matter to private cable operators (PCOs)? Because property owners are now beginning to use their own form of sabermetrics in making player (service provider) selections. When a property owner or homeowners association is considering a new bulk services agreement, it usually starts from the same place as Billy Beane: "I want to get the most, and I want to pay the least." Owners do the same sort of analysis a team's general manager would do. Tey assess their needs: What should be included in bulk? What tiers are individual users upgrading to? Are they subscribing to high defnition? Do they sign up for DVRs? What Internet speeds do they want? Do they want HBO? Once owners know what they need (just as the Oakland A's might determine that they need a left-handed starting pitcher), they begin evaluating the market. My frm helps building owners do this. We look at every player on the market: the local cable company, the telephone provider, a fber company, a wireless operator and, of course, PCOs. Every left-handed starting pitcher is considered. Ten the moneyball starts. "Why would I pay $55 a month for one HD receiver and a 10 Mbps Internet connection when I can get a DVR included and 25 Mbps for much less from someone else?" As the general manager of the process, I ask the owner to narrow his or her choices. "Which left-handed pitcher fts your needs best?" Tough many owners focus just on price, others are getting smarter about their analysis. Tey look at key sabermetrics to draft the right player or make a trade (that is, switch providers). Teir analytics now include looking at proposed performance standards in the agreement, response times, cure clauses. Owners look at trouble ticket summaries to determine network areas that might need attention, or they look at types of problems they experienced in the past. Tey look at rate increase language, types of equipment used, number of comp accounts ofered, fees charged to individuals for upgraded services. And when picking their next lefty, they care about the provider's willingness to upgrade during the term of the agreement. To get the best starter to add to the rotation, they look at track records in the same market. Tey talk to residents and on-site managers. Moneyball works for baseball teams; it also works for property owners. Te key is to build the right statistics on the back of a company's baseball card to attract enough teams, I mean property owners, to want to sign you up. Ten you can hit the moneyball out of the park! v Bryan Rader is CEO of Bandwidth Consulting LLC, which assists providers in the multifamily market. You can reach Bryan at email@example.com or at 636-536-0011. Learn more at www.bandwidthconsultingllc.com. Moneyball for PCOs Property owners are getting more savvy about choosing service providers. Private cable operators need to be able to keep up with them. By Bryan Rader / Bandwidth Consulting LLC