Burst Yahoo Xtra bubble haunts new TVNZ boss Kenrick

Kevin Kenrick will be praying there are no burst bubbles when he takes up his new role as chief executive of TVNZ in a fortnight.

Back in 2007 the former Telecom consumer division chief operating officer copped the full fury of the public when the company failed to transfer some of its 800,000 Xtra customers on to its new webmail service, Yahoo!Xtra Bubble.

The burst “Bubble” left thousands of customers, including small business owners, without email for days on end, causing some to lose significant sums of money.

The fiasco cost the telco an estimated $7 million after it agreed to give $1m to charity and provide all of its Xtra customers with one week’s free broadband or dialup access by way of an apology.

More importantly, the debacle inflicted serious damage to the Telecom brand, especially when it initially tried to play down the extent of the problems.

Those affected went ballistic, their views summed up in a New Zealand Herald editorial which said Telecom customers “would be well justified in believing that the company has taken its strategy of sowing confusion in the marketplace to a new level”.

“Now it sows anger as well as confusion. It was not just that it managed to make a hash of upgrading to Yahoo!Xtra Bubble, it was the attitude afterwards of not seeming to care that thousands had been seriously inconvenienced.

“It was well-nigh impossible to get help or information. Telecom declared it would not compensate businesses.

"Worse, it went on trumpeting the exciting new Bubble service that would supposedly change the way its subscribers used the internet,” it said.

When Telecom eventually fessed up they left it to Mr Kenrick to face the wrath of customers and make an abject apology.

“We are genuinely sorry,” he said, “for the technology problems that affected many of our customers over this time.

“We are aware of how important reliable email access it, and apologise to each customer whose service was affected.

“The launch of Yahoo!Xtra Bubble has been a miserable start to an initiative designed to bring the world’s best online services to our New Zealand customers.”

But worse still for Mr Kenrick was that he could not give an assurance the problems had been completely resolved.

Media commentator Russell Brown says the “Bubble” episode was “a complete calamity from beginning to end".

“The launch was a shambles . They didn’t ask the customers whether they wanted this service and then in delivering the service they basically broke the internet service to thousands of customers.

"Operationally, it was a debacle.

“There were some things Kenrick said at the time that made him seem more like a marketing guy than an operations guy and he didn’t appear to understand what the correct position was.”

Mr Brown says Yahoo!Xtra Bubble was “put out of its misery“ last year when Telecom sold its 49% share in the joint venture to the majority owner Yahoo7.

Technology writer Juha Saarinen says he is still mystified why Telecom got rid of Xtra in the first place and joined forces with Yahoo.

"Why Telecom decided to kill off Xtra in that stunningly inept manner is impossible to understand.

"Telecom spent so much money in setting up Xtra, and it took time to turn it into what was arguably a very good service provider.

"Not only that, it was the country's largest ISP brand, considered the safe (if boring) choice, to the point that many small businesses used xtra.co.nz email addresses on stationery and packaging.

"With Xtra!Yahoo, Telecom threw all the brand power and customer goodwill in the bin, and for what? Saving a bit of money?

"Surely losing customers, having to pay compensation and destroying a valuable brand is a net loss to any company? I don't get it."

For Mr Kenrick, who’s been described by one of his peers as “one of marketing’s truly nice guys,” the "Bubble" episode would have been the last thing he wanted on his CV.

But, clearly, it didn’t seem to concern TVNZ when it came to appointing him chief executive recently.

About a year after the “Bubble” affair he left Telecom to take up a position as chief executive of House of Travel where he remained until late last year before applying for Rick Ellis’ old job at the state broadcaster.

At the time TVNZ chairman Sir John Anderson described Mr Kenrick as “a well-known business figure who has held a number of significant roles in some of New Zealand’s largest companies, including Lion Nathan, Telecom and House of Travel”.

“The strong interest in this position by quality candidates reflects the high regard in which Television New Zealand is held,” he said.

For his part, Mr Kenrick has declined to speak to NBR ONLINE saying that he was reluctant to talk about his role at TVNZ “until I know more about it”.

He indicated that he would be happy to be interviewed once he had settled into the job.

However, at the time of his appointment he described himself as a proud Kiwi who has a passion for people, customers and making the most of current and future technologies to enhance the services available to all New Zealanders.

“I’m excited about building on these strong foundations and taking advantage of the new opportunities, like ultra-fast broadband, to deliver richer media services to more New Zealanders,” he said.

“It’s a great privilege to lead one of New Zealand’s most recognisable companies at such a dynamic time for the media industry and with so many fantastic opportunities ahead of us.

"I can’t wait to get started.”

Media commentator Phil Wallington says that while Mr Kenrick has no experience of running a television company “the guy has obviously had to go through a lot of hoops and he’s clearly some sort of uber manager, and that’s the type of person they look for these days”.

“He’s got a huge job ahead of him. I wish him very well in it.

"Maybe he’s one of those people who comes from something completely outside [television] and has a brilliant idea.

“He might be able to reinvent the light bulb. Who knows? Gifted amateurs occasionally come in and bring something that wasn’t there before.”

Mr Kenrick is likely to be paid considerably less than Rick Ellis, who was pulling in around $960,000 during his last year of service as chief executive.

It is believed his package will be around the $650,000 mark.

But this may not overly worry him, judging from some remarks he made to a newspaper two years ago.

“There are three things you should get from a job,” he said. “Earning, learning and fun.

"It’s great to have all three but if you’re only getting one out of three you don’t want to do that job too long."

Which might explain why he left Telecom.