Gerry's Kids - Geraldine Laybourne - Company Operations

Getting research to work for you

Geraldine Laybourne is one of the most respected television executives working today. And one of the keys to her success has been reliance on good, old-fashioned research.

Laybourne built Nickelodeon with a never-ending mantra of listening to children. She's bringing the same philosophy to Oxygen.

For instance, she acknowledges she doesn't have all the answers to the basic question of what women want from television as evidenced by the interview on page 12 of this issue. She's sure cable operators know even less. But she's got a method to determine what the audience wants. In this fractionalized viewing world, it's the smartest thing a television executive can do.

As the cable industry enters a new broadband era, it should follow Laybourne's example and spend more money on R&D and on listening to consumers because it will be the only way to be successful in tomorrow's dog-eat-dog competitive environment.

Look at how Laybourne and company sized up the Internet competition, prior to launching Oxygen.

Oxygen Media has assembled 13 Web sites over the past 12 months. The genesis of the group began with a handful of pre-existing sites AOL signed over to Oxygen as part of its deal to invest in the company. That's a nice head start.

Oxygen's team then launched the other Web sites with a combination of homework and research.

She hired five smart college graduates, put them in a roomful of computers and the latest Internet gadgets, and ordered them to play.

Actually, they received a little more direction than that, but playing was the essence of their task. Oxygen executives mapped out their Internet strategy to the group. `Here are the issues women are facing. These are the Web sites we want to create. Find out what sites are out there. What do they do Well? What gaps can Oxygen fill?'

Each week, Laybourne and her entrepreneurs would subject themselves to a brain dump from the recent co-eds. Over time, those recent college grads helped Oxygen hone its Internet strategy. The company's 13 Web sites now have more than 4 million users, not bad for a year's worth of work. And several of those ex-college students have worked their way up to being producers of Oxygen's own Web sites.

It's that kind of research operators should be underwriting, because the list of questions they face in today's competitive world is daunting.

For instance, a certain segment of the public wants all their telecommunications services from one provider. The debate is open as to how large that segment is, and it ranges from 20% to 60%.

The fallacy for operators would be to envision that one marketing plan, for instance, would get them 40% penetration.

Let's take a cable system with 100,000 subscribers where 40,000 are interested in bundled services.

The first 20,000 will be persuaded by price alone, by offering a 20% discount. The next 10,000 will be persuaded on customer service. A better price might help, but those customers will want someone to fix problems when they occur.

Make no mistake, there will be problems running telephony, voice and data services over tomorrow's networks. A sizable number of consumers will place service issues above price in determining who gets their one-stop shopping money.

For the remainder of consumers, the issue of what provider wins in a one-stop shop world may be as simple as: Can I pay my bill online? Or are there "frequent user" programs available?

Another brewing issue that cries out for research is the walled garden debate: Should operators delivering Internet services over the TV amalgamate content for consumers?

Much of the groundwork is being laid in Europe, where several walled garden approaches are being marketed. But European consumers aren't the same as American consumers, and U.S. cable systems can only rely a bit on what is learned across the sea.

By the time operators deploy interactive set-tops next year, broadband content will have grown by leaps and bounds. It would be smart for operators to place only the bare minimum amount of content in their own walled gar dens. If they put too much content in consumers don't like, they will turn the market against them.

Consumers have the entire World Wide Web to find what they want and what's in an operator's walled garden might not cut it.

Again, solid research on how much walled garden content consumers want will help operators prevent making disastrous mistakes in the next few years.

The stakes are terribly high as operators enter uncharted territory in the broadband world. Geraldine Laybourne knows all about uncharted territory. And that's why she uses research as her road map for the future.

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