Negotiation with Communication Service Providers
Are you looking for new ways to extract more revenue from your developments? Your communications provider contracts should be an area that you target.
Communications services are growing in number and represent a very big business. At one point, for example, cable operators offered only basic video services, and contracts were signed on a "revenue share," "bulk bill," or "entry agreement" basis. Now, those same operators also offer digital video, high definition and video recorder services, high speed Internet access and telephony services. While the cable operators' revenue has continued to expand, however, the price they are typically willing to pay for access to a development has failed to keep pace.
Why hasn't the revenue stream grown for developers as it has for the service providers? One reason is because cable operators bought most of its competitors in this area, formerly called "SMATVs" (Satellite Master Antenna TV), in the late 1990s and early this century. Less competition, of course, meant bigger shares of the revenue for the remaining service providers.
Fortunately, new providers are beginning to appear again. Private Cable Operators ("PCOs") have benefited from significant decreases in electronic component costs and from the development of the "triple play" (i.e., satellite, Internet and telephony) business. These PCOs often offer property owners a more attractive financial package and more flexibility in the services that can be offered to your residents. Their presence also provides more leverage for property owners who wish to continue their relationship with the incumbent provider.
If you are considering a new communications provider agreement, our cable and communications practice group has a unique understanding of these issues and can provide you with a distinct advantage. We can help you analyze proposals from providers or solicit proposals on your behalf. Our firm also advises on strategies you can employ to maximize this revenue stream. Call us at (248) 723-0426 or fill in the "Contact Us" section on the firm's homepage and we will be in touch with you soon.