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Customer

Up to 30K Subscribers – Single Cable System

Subscriber and Package Types

• Basic Analogue
• Basic Digital
• Tiers 2 and above
• A la Carte
• HD

Networks/Channels

120

Overview

Cable Operator reached the mature stage in the CATV business about 4 years ago. Growth requires revamping their channel lineup with higher quality programming. A more aggressive negotiation with the Media Content Providers is necessary to make the new channel lineup cost affordable. Like any other business, for budget creating purposes Company has reduced their staff, compromising important informative activities such as operational and financial reporting. Operational cost savings are redirected to expand their network capabilities since the Company has also entered into the internet and voice business recently. To date, these relatively new services have not yet met the expected demand.

Business Need

Programming is the largest cost for a Cable Operator, therefore the smallest deviation may cause a large liability. Furthermore the incorrect interpretation of the contract terms may result in overpayments, affecting their cash flow and equity.

The staff down-sizing reduces the ability to review contracts, the complex spreadsheet macros, and the outcome of the calculations for each of the 120 networks in their current lineup.

At the end of prior fiscal year, Company’s statutory auditors brought to the attention of the top management their concern that the largest cost is calculated in a spreadsheet, which does not meet SOX requirements. “The risk of miscalculating the related fees is high enough to compromise the short term cash flow and proportional equity”.

It is important to empower management with accurate reports about their actual content demand and cost. Staff are required to work in different databases to assess the cost benefit of each of the networks in the channel lineup. To date this has been a time consuming process. A single database with all variables is needed to maximize the advantages of the contracts: volume discounts, penetration discounts, channel adjacency and the like. The allocation of resources may be more efficient if management can assess upfront the cost of promotion, packages’ elasticity, break even-point, and so forth.

As the information is not as accurate as necessary and staff reduction makes it difficult to explore the maximization of benefits or deductions, Company lacks powerful and consistent arguments to re-negotiate content license fees with programmers, becoming a vicious cycle that prevents growth.

Solution and Benefits

MDS for MSOs delivered the technological advance needed to reduce the license fee calculation time from 5 man days to 1 hour while increasing accuracy. In addition, within the single hour MDS for MSOs provides all the necessary reports for the administration to perform a thorough analysis and shorten the decision making-process.

At the implementation stage, all contracts were reviewed and flagged. By using MDS for MSOs the Company is now able to maximize all discounts and deductions allowed as MDS for MSOs easily performs all such calculations. As a result, the Company found they were overpaying some of the most expensive channels, as well as those with complex rules.

The metrics implemented are now fully functional as reporting is faster and accurate. MDS for MSOs produces all type of reports requested by the top management including the remittance back up accepted by the programmers with a simple click.

As top management is now empowered with a robust database that manages their largest cost and analyzes it in-depth, the Company renegotiated most of their contracts with the programmers. This resulted in a programming cost reduction of 16%, which includes the benefit of preventing overpayments and maximizing the contracts discounts.

Since MDS for MSOs was installed in Company’s server, departments such as marketing, programming and finance among others, have instant access to current and historical information. In addition, the top management has direct access as well while traveling. Growth is in progress now.

Customer

Large Multi System Operator - more than 300K Subscribers and 80 headends

Subscriber and Package Types

• Basic Analog
• Digital Basic and Various Digital Tiers
• Analog Tiers
• A la Carte
• HD
• PPV and VOD

Networks/Channels

Over 200

Overview

Cable Operator experienced significant growth in the past few years due to the acquisition of several companies. At the same time, they have been expanding their channel lineup, adding new channels and digital packages. They offer a number of programming packages, PPV, VOD as well as telephone and internet service. They are in the process of integrating the new entities into their existing systems and streamlining their operations.

Business Need

The Cable Operator has been using a manual/spreadsheet based process to manage their programming costs. The rapid growth resulted in a significant increase in the number of headends, channel lineups and related data under their management. The sheer volume of data was pushing, if not exceeding, the limits of the spreadsheet software capabilities.

The number of programming fee contracts, and their complexity, placed an additional burden on the existing process. Contract compliance was an issue, and the inherent risk in the programming fee calculations was increasing.

The entire process required several staff the better part of two weeks to complete. Management wanted to reduce the risk of managing a high volume of entities and related contracts which appear to be tailored to each of their business units, preventing the company from performing standard license fee calculations across the MSO.

Solution and Benefits

MDS for MSOs delivered the needed solution, replacing the spreadsheet process, and reducing the possibility of mishandling the variables while updating the complex macros. Several Company processes benefit from the implementation of MDS for MSOs:

• The billing report mapping and upload function enabled Cable Operator to upload data directly from their subscriber billing reports, properly classifying the data to the proper packages. All subscriber data and subsequent calculations can be traced back to source documents, ensuring SOX compliance.
• Cable Operator channel lineups were loaded into the MDS for MSOs channel lineup database, which is fully integrated into the license fee calculation process. Cable Operator now maintains a monthly channel lineup database, including all history, which is critical to ensure accuracy of all calculations.
• All programming contracts were entered into the software. As part of this process, Cable Operator reviewed all contracts to ensure compliance. Complex terms were easily entered into the MDS for MSOs software, replacing complex macros used in the previous system. MDS added additional license fee calculations needed so that 100% of Cable Operator’s programming fees were processed in the software.

MDS personnel assisted with the implementation of the software, which included a review of the license fee calculations against historical data, creating the necessary adjustments for the Company to claim for past overpayments. The software was proven to be more accurate, as it could properly handle network specific subscriber calculations (i.e. free subscribers, various types of bulk subscriber calculations), as well as the license fee calculations. The entire implementation process required less than two weeks.

MDS for MSOs enabled all business units and departments involved in the programming fee process such as marketing and legal to share relevant information instantly.

MDS for MSOs delivered the technological advance needed to reduce the license fee calculation time by an approximate 60% average per Business Unit, while increasing accuracy. The resulting efficiencies gained has freed up resources for other areas of their operations.

Since MDS for MSOs was installed in Company’s server, the Company has realized a significant decrease in their administration costs, more accurate programming fee calculations, and are positioned to realize future benefits through efficient, in-depth analysis of their programming costs and related data.

Currently, the company produces detailed reports that meet management needs within days after the month closing, providing a greater window for decisions and actions related to their largest cost.