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The Power Trio

Wed, 12/31/2003 - 7:00pm
Jeff Baumgartner, Editor


Mike LaJoie, Mike Hayashi and Kevin Leddy have been key to Time Warner's successful foray into VOD, HDTV and digital video recording, and have
played a prominent role in Plug & Play negotiations.

When Time Warner Cable puts its heads together, good things usually happen. And when it comes to rolling out advanced broadband services, it's safe to say that three heads can indeed be better than one.

That summation is only amplified at Time Warner Cable, whose recent accomplishments made it difficult to recognize only one person for CED's annual Man of the Year award. During internal research and discussions with industry insiders, it became abundantly clear that the operator's successful rollout of video-on-demand, high-definition television and the digital video recorder (DVR), as well as its key role at the Plug & Play negotiation table, could be traced back to a technical and operations team consisting of three individuals: Mike LaJoie, Mike Hayashi and Kevin Leddy.

TWC is an interesting case in many ways. For one, it currently does not have a traditional chief technology officer. The last person to hold that distinction was Jim Chiddix, a former Man of the Year honoree who most recently served as president of Time Warner Inc.'s Interactive Personal Video Group, which originally headed up the clandestine MystroTV TV-on-demand effort.

Time Warner Cable is also considered somewhat of an industry risk taker, willing to spend resources on technologies that could strengthen its service backbone somewhere down the line. The MSO's Full Service Network trial in Orlando during the mid-1990s is a perfect case in point.

"This company has a very entrepreneurial spirit, and risk-takers are rewarded here," says LaJoie.

But that doesn't mean every idea is a resounding success or even sees the light of day. Plenty of seemingly good ideas have flamed out, going unnoticed by those outside the MSO's inner circle.

"Most of the ideas we come up with end up in the round file," LaJoie explains. "The ones that fly are the ones that you hear about. But to get one winner you've got to go through 10, 15, 20 losers."

Considering the competitive threats presented by DBS and the telcos, Time Warner Cable will likely continue to bat around its share of losing ideas, knowing full well that the next winner could be just around the corner.

"You have to be thinking ahead, which means you have to be thinking about taking risks. And therein, I think, lies a rub," Hayashi explains. "In cable, we were hitting 1.000 [before competition arrived]. But now we have to be OK with being a .300 hitter. It's still Hall of Fame, but you have to go after every possibility."

And the process of seeking out those possibilities has paid dividends. Early to the game with VOD, Time Warner Cable has the service launched across the board and has signed up north of 750,000 subscription VOD customers in the process. TWC has also been extremely aggressive with HDTV, a category that just enjoyed its best holiday season ever.

That success has been matched by Time Warner's rollout of set-tops with on-board DVR capability. Time Warner Cable, an early believer in that as well, had more than 251,000 DVR subs signed up by the end of the third quarter of 2003.

But with risk comes reward, and Time Warner has taken more than its fair share of risks. So perhaps it's only fitting that the Men of the Year reward goes to three of the company's top risk-takers–Mike LaJoie, Mike Hayashi and Kevin Leddy.

Mike LaJoie: Guy in charge

LaJoie is a fisherman at heart, a golfer at play and a cable guy by trade.

Mike LaJoie
Reeling in a big one: LaJoie (right) and Jim Ludington proudly show off the catch of the day: a bluefin tuna. Ludington, who worked on the original FSN project, recently re-joined Time Warner Cable as senior vice president of the MSO’s advanced technology group.
As the executive vice president of Time Warner Cable's advanced technology group, LaJoie is tasked with overseeing all of the division's efforts and providing guidance. The tricky part, he says, is knowing how much time should be spent analyzing, designing or preparing for the Next Big Thing, and knowing when it's time to pull the deployment trigger.

"If you make that decision too soon, you launch products that are unstable or half-baked. If you wait too long, you launch products that are overdue or stale. So there's a nuance there, and part of my role is to figure that out," LaJoie says.

LaJoie also must know what's on the mind of Time Warner Cable Chairman and CEO Glenn Britt, understand his vision, and ensure that his vision is implemented correctly.

LaJoie is also in charge of the restructured MystroTV operation, a project that just recently came under the operating control of Time Warner Cable.

While LaJoie has his finger on the pulse of TWC's technology future, he's not your traditional engineering type. LaJoie has a solid business background. He was a registered stockbroker and later a Nasdaq broker/dealer. He knows how to read a balance sheet and has a firm understanding of what technology costs. But he's also a technologist who knows how to build and innovate. The design for the interactive program guides Time Warner Cable deployed over the years originated from much of LaJoie's work.

"We don't build technology here, but we create a lot of intellectual property," he explains. "You have to if you want to lead the vendor community and lead the product line."

LaJoie says he has always been intrigued with machines and how they work. "For as long as I can remember, if it whirred, clicked, buzzed or blinked, I wanted to take it apart and put it back together...motorcycles, radios, computers, all kinds of stuff. I guess I had a natural aptitude," he recalls.

Those instincts came into play during his earlier days as a production engineer for companies such as PaperMate Pen and Easton Aluminum. At Easton Aluminum, for example, LaJoie invented the process for installing a metal end on aluminum baseball bats. Before that invention came to pass, the business ends of those bats were equipped with rubber stoppers.

LaJoie also got into computer programming in the late 1970s and early 1980s, teaching himself. He landed a consulting gig at Warner Communications in 1988 to help the company figure out how Philips' CD-I format might fit into the digital music business.

After the Time Warner merger, LaJoie was asked to go to Denver in 1992 to bring an interactive software perspective to the group that was designing what would later become The Full Service Network. He went full-time with the company in 1994.

After Britt became president of Time Warner Cable in 1998, he asked LaJoie to work in corporate development, about the time the MSO was giving VOD serious consideration for a national rollout. In August 2002, LaJoie was promoted to his current slot, heading up Time Warner Cable's advanced technology group. Though the new role comes with new responsibilities, LaJoie knows a thing or two about being in a pressure cooker.

During Time Warner's initial VOD trials, LaJoie remembers when things came to a head in October 2001. It was then that the company brass asked him how long it would take to productize VOD and get it ready for a national rollout.

"I said, I don't know, maybe 20 months, 24 months. They then told me I had nine," LaJoie recalls. The weight of that burden only increased due to the fact that the first launch of a multi-million-dollar advertising campaign promoting VOD was set to hit in month number 10.

But not all of LaJoie's life is about deadlines and rollouts. He and his wife Teresa are the proud owners of two Springer Spaniels. On weekends, LaJoie likes nothing better than to be out on his fishing boat, setting his mind to things other than work.

But he has also discovered that his ability to fix things comes in extra handy on the boat, which, LaJoie jokes, is an acronym for "Break Out Another Thousand."

"They're always breaking, and always at the most inopportune times," he says of his watercraft. "But the reason why I love it is because you don't think about anything else. If you're 150 miles offshore and a 40-mile per hour wind comes up with 15-foot swells, you're not thinking about the cable business. You're thinking about getting home."

Mike Hayashi: The restless visionary

Mike Hayashi arrives for his afternoon interview almost out of breath. He literally has been running from meeting to meeting all day–a typical occurrence during his frequent visits from his Denver office to the MSO's Stamford, Conn. headquarters.

Hayashi & Family
Some TLC at DIA: Mike Hayashi settles in
at Denver International Airport with
(from left) daughter Rina, wife
Yoshiko, and daughter Rika.
He's on time, which, he explains, is a rarity. Time is particularly valuable for someone who spends most of his hours noodling how his company can keep its competitive edge sharpened.

As Time Warner Cable's senior vice president of advanced engineering and subscriber technologies, most of Hayashi's time is spent thinking about how equipment interfaces directly with customers. That means set-tops and televisions.

As a key player in the OpenCable project, it also means helping to steer the direction of OCAP (OpenCable Application Platform), a CableLabs-specified middleware.

"I'm very committed to CableLabs in terms of making OpenCable and OCAP work. I do think that is absolutely critical to our future," Hayashi says, noting that it will give cable the components it needs to foster innovation, an area that has come under increasing scrutiny.

And Hayashi doesn't blame just the vendors for any perceived lack of it. "I know that [the legacy vendors] take the heat for not having the right product on time and so forth. But, on the other hand, they are our own reflection, because they basically build against what we are telling them–whether it's explicitly in the form of a specification or in a conversation."

Hayashi has also been a big advocate for the DVR, even when it wasn't a popular view. That's because boxes like Scientific-Atlanta's Explorer 8000 are expensive, and arrived at a time in which MSOs were reining in capital expenditures. "When he and I were working on that early on, there was not a consensus about whether it was a good idea or not," says Michael Harney, a senior vice president at S-A, and president of the vendor's subscriber networks sector.

Today, however, virtually all of S-A's customers are deploying DVR products. "He [Hayashi] got it before a whole lot of other people got it. Kevin Leddy was also a big advocate of the DVR product early on," Harney adds.

If Hayashi appears to be hooked into the supplier community, he should be. That's where he got his start in the industry. Hayashi was born in Germany, raised in Japan and earned his engineering bachelor's degree in 1978 from Harvey Mudd College in Claremont, Calif.

Following graduation, Hayashi was posed with a problem. He wanted to stay in the U.S. but was not then a citizen. As luck would have it, he discovered in 1978 that Pioneer had recently opened a loudspeaker R&D lab in nearby Pasadena.

He didn't get that job, but he did get one with Pioneer, returning to Japan when the company was crafting "QUBE," a groundbreaking analog interactive television project designed to impress local cable franchising authorities.

"They [Pioneer] asked me if I knew anything about cable systems, and I said, yes, because I had done some system work and it sounded close enough to engineering. That was pretty much it," Hayashi recalls.

On board with Pioneer, Hayashi's first cable job was as a QUBE engineer. His early work centered on elements such as theft of service, because all it took was a magnet and some know-how to defeat the QUBE system. A year later, Hayashi returned to the U.S. to help Pioneer and Warner Cable interface the QUBE platform.

Pioneer's wider cable strategies back then were tied to addressable analog set-tops, a sector dominated by the likes of Jerrold, Zenith, Oak and Scientific-Atlanta. "Pioneer was the last of those in terms of share. If you're the last one to show up, you have to figure out a way to break into existing market share," Hayashi notes. "So we worked on a product called Multi-Vendor Compatible, which was a product that was compatible with the competitors' [boxes]."

Hayashi next went to S-A in 1989, joining a company that had virtually no international presence to speak of. During Hayashi's tenure at S-A, the company became one of the first foreign companies to sell set-tops into Japan.

Hayashi eventually joined Warner Cable after conversations with Jim Chiddix, coming on board in 1992 as vice president of international development.

"To me, that was a foot-in-the-door thing," Hayashi says. But the timing couldn't have been better–Time Warner was pitching The Full Service Network, an innovative, but very expensive, test platform that would pave the way for the MSO's future digital and video-on-demand efforts.

"The Full Service Network was right up my alley in terms of CPE and interactivity and so forth. It was also my ticket to go to Denver," Hayashi says, referring to his present home.

After the FSN was deployed, Time Warner's core technical team was tasked with figuring out how digital could be done more cost-effectively. Those efforts fueled "Pegasus," the digital platform that Time Warner Cable has been deploying over the past six years. It has also served as the overarching platform for its VOD, HDTV and DVR initiatives.

Hayashi's visionary tendencies have on occasion created some panicked moments for the engineers assigned to turning them into reality. At S-A, Hayashi was one of the people responsible for conjuring new product ideas. Harney was the engineer tasked with building on those ideas.

"Mike was quite good at getting in front of the CEO," Harney recalls. "He would essentially [present] product features that, if you could actually do it and do it for a particular cost, you would have a huge success on your hands. Unfortunately, many times what he would propose wasn't possible," he adds, with a laugh.

"It was very common in those days for Mike to create a lot of weekend work for me because he would put in front of the CEO this great idea and how great it would be to pull it off," Harney remembers. "Then I would get to try to figure out how to do it. It seemed like it was always a Friday night when I would get these assignments. But it was fun; it wasn't a problem."

Still based in Colorado today, Hayashi's immediate family includes his wife Yoshiko and two daughters: Rika, who has joined the Peace Corp. after working in the bio-tech industry, and who is now stationed "in the middle of nowhere" in the South Pacific; and Rina, who is currently attending the University of Denver.

At home, Hayashi is basically your gadget geek. "But these days time is such a premium. I feel like hiring a consultant to be the geek for me."

In addition to being a restless idea man, Hayashi is also renowned for his strong support of SkiTAM, an annual fundraiser from CTAM's Rocky Mountain Chapter that benefits the U.S. Disabled Ski Team.

"I think I am very lucky to be where I am right now, so SkiTAM is a fun opportunity for me to give back," Hayashi says. "I know there might be some people who feel like I'm probably strong-arming my supplier friends into donating stuff, but I know they are doing it out of the goodness of their heart, because, to me, it's the best cable event. You cannot go to this event and not come away feeling motivated."

Kevin Leddy: Bridging the gap

Without a crystal ball, it's hard to see how things will turn out next week, let alone five years down the road. Regardless, that's the challenge Kevin Leddy takes to task everyday as Time Warner Cable's senior vice president of strategy and development. He must gaze out onto the horizon to see the competitive threats that are looming, and set a course for how to meet and beat them.

Leddy & Family
Yodeling optional: Leddy and his family enjoy a spectacular view during a
visit to Switzerland.
Leddy is also in charge of the MSO's next platform, focusing on OpenCable, OCAP and the CE/cable Plug & Play agreement, which the Federal Communications Commission adopted late last year. He's also heavily involved in the two-way extension of Plug & Play and the legal and policy issues that surround it.

Leddy's role in the Plug & Play agreement has been well documented. In 2003, the National Cable & Telecommunications Association recognized Leddy's work by bestowing him with the prestigious Vanguard Award for Marketing.

"I was part of the negotiating team that Mark Coblitz (Comcast Corp.'s senior vice president of strategic planning) led," Leddy says. "We spent the better part of seven months locked with the consumer electronics industry pounding this thing out."

The next step is the creation of a two-way Plug & Play agreement, a much more complicated version that aims to put OCAP into CE devices and make it possible for set-top-free digital TVs to handle video-on-demand and other interactive applications.

If the encoding rules were the hardest part to solve for the unidirectional agreement, adding digital rights management elements to the two-way version will prove just as challenging, if not more so.

Leddy got his start in the cable industry in 1977 at the NCTA, where he handled government relations for a couple of years before heading back to college. After a short hiatus that included some intern work at Warner Amex Cable, he rejoined the industry full-time in 1980, working for the operator's franchising department.

After completing the first chapter of his cable career in government-related efforts, Leddy embarked on a marketing career at the MSO that extended nearly two decades. The last four or five years of his marketing work at Time Warner centered on the operator's digital platform.

"Our group looked at the product offering that we had compared to DBS, and we knew that we didn't have a good enough offering," Leddy explains. "We were just not going to be competitive."

At that point, Leddy got together with the likes of Chiddix and Hayashi to hash out the digital project, which eventually became the Pegasus platform, and then moved ahead with a marketing plan to roll it out everywhere. It was a five-year period in which the company's marketing and engineering minds had to be on the same page–a rare occurrence for the time.

"Whether we wanted to or not, our marketing group got pretty smart about digital technology, and exactly what the box could do and could not do," he says.

That experience has bloomed into a blessing for marketers around the industry who know how to sell products but probably don't know much about the technology behind those products. Leddy and organizations like CTAM have been successful in breaking down some of the barriers between marketers and engineers in recent years. Leddy is presently serving the final year of his term as CTAM chairman.

"One of our strategic objectives at CTAM," Leddy says, "is to try to build a bridge between the technologists and marketers in the industry so that marketers can influence the next generation of products a little better and the technologists can understand what the consumer really wants to buy."

"Kevin's really been the engineer of that, bringing the two organizations (CTAM and CableLabs) together," says CTAM President and CEO Char Beales. "Marketers and technologists don't naturally get together," she adds, only half-jokingly. But the mix is beginning to stick. "When we started this process five years ago, only 2 percent of our members were in hardware and software. Now it's like 12 percent."

Leddy and his colleagues have also gone out of their way to help the industry's marketers get their hands around the most complex technical issues. After the Plug & Play agreement was announced in late 2002, for example, Leddy and Cox Communications Senior Vice President of Strategy and Development Dallas Clement led a call with CTAM committee members to discuss the agreement and its marketing implications.

"It gave the marketers a jump start, because so often in the history of cable, technology led and it got dumped on marketing's desk. This was an opportunity for marketing to really have input, and Kevin has led that whole process," Beales says.

The engineer-marketeer connection has done more than just expand on CTAM's membership. Tying those disciplines together has also spawned the Go2Broadband service locator, used initially for high-speed data and more recently for digital video and high-definition television services.

While CTAM handles relationships with retailers and consumer electronics companies, CableLabs has stepped in on the back end to ensure the database is up to date and that the Web site is working properly. The two have also collaborated on the "OnlyCableCan" marketing campaign, which touts cable's voice, video and data service capabilities.

When Leddy's not thinking about Plug & Play and the general future of cable, he's spending time with his wife Kristen and three young children, playing a few rounds on the links, or reading up on his history. If not that, he's fussing with a houseful of gadgets ranging from computers, to DVRs and home networking gear.

When it comes to home gadgets, "I'm not quite up to Hayashi's level, but I'm getting closer," he quips.

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