Larry Barrett

I'll Buy That For $1,200
May 16, 2008

All 15,000-plus of you heading to New Orleans this weekend for the 2008 Cable Show have a long list of people to thank for giving y’all something to talk about between draws on your Hurricanes, the never-ending series of speeches/panels and the odd “curiosity” excursion to the Lower Ninth Ward.

For starters, thank your lucky crescents for the Sprint-Clearwire, et al. cartel, the good folks of Wilmington, N.C., and good ol’ Charlie Ergen.

Get down on bent knee for Kevin Martin, Brian “Unassisted Triple Play” Roberts, converter-box coupons, slippery NDS Group CEO Abe Peled and Sue (what the f*** was she thinking?) Simmons.

There. There’s your cocktail hour starter kit.

As you’re taking in the splendor that is Bourbon Street at 2 a.m. on a Sunday morning, take a good, hard look at yourself, your colleagues and what seems to be half of suburban Philadelphia and ask yourself why one Henry Merritt “Hank” Paulson, Jr. isn’t in town.(We’ll get back to Mr. Paulson later.)

Lost in all the chatter about churn rates and tiers and tru2way is the fact that about 10% to 13% (depending upon who/what/when you believe) of U.S. households—some of them less than a 20-minute cab ride outside New Orleans—will no longer have any TV at all unless they do something in the next nine months.

Don’t know about your household, but content—be it from the TV, the Internet, a book or the bottom of a Jack Daniels bottle—is King in my household.

It’s only slightly less important than air.

I suspect I’m not alone.

So let’s talk about these supposed, estimated 13.5 million U.S. households that are relying solely on rabbit-eared boxes to pull in a handful of analog channels.

If you buy into what the FCC thinks it’s selling, these are the tired, poor and huddled masses who desperately need the industry’s help. The government’s help. Converter-box coupons, a sweeping educational campaign…etc.

With the exception of people who simply get off on getting something for free—even though they could easily afford a 42” LCD set, the home-theater system, a top-tier DirecTV package, fine “Corinthian” leather recliners and one of those Costco-sized Red Vines tubs—the people really impacted by the transition are definitely poor, likely tired but probably not very well huddled.

They’re the people who most need content, by the way.

And the sad truth is they don’t figure too much into any of what will be discussed during this week’s cable confab. Interactive TV, video-on-demand, a la carte programming…these are words that only mean something to content elitists—basically the rest of us.

Monday’s general session, “Bit by Bit: Convergence Creates the Picture,” sounds like something conceived by marketers, tweaked by flacks and destined to be regurgitated by the media because…well…because you have to file something.

I’ve got news for the FCC, the cable/DBS machine, the wayward programmers and the entire body politic of the Screen Actors Guild: People who are rigging aluminum foil on their sole, precious connection to the “world” don’t care about dual carriage exemptions, churn rates or whatever the deal is with the NFL Network.

They just want to watch the ballgame or Oprah.

It’s that simple.

Which brings me back to Henry M. Paulson, Jr.

For all the money, time and effort the cable industry spends lobbying Congress for this, that and the other, why weren’t they smart enough to butter up the Treasury Department Secretary, cut some deals and eliminate the middleman.

Forget sending 117 million families $1,200 as part of President Bush’s great “economic stimulus plan.” Just have them bring their sad, rabbit-eared black-and-whites to the mall in exchange for a Vizio 42” LCD. No questions asked.

While you’re at it, someone at the Treasury Department should have been on the ball and put out an RFP to all the cable and DBS providers to bid on providing free—yes free—installation and basic content packages (I’m thinking six months is plenty to whet the whistle) to anyone trading in their analog set.

Advertise all you want about converter-box coupons. Run PSAs from now through Valentine’s Day next. You won’t get near the response you’d get from good old word of mouth.

“Yeah, just take that piece of crap to the mall/post office/fire station and they’ll give you an HDTV and come out to your house/apartment/RV and install cable for free for six months.”

Done.

That, my friends, is the American dream.

Now, I realize something like this could never happen, with or without Mr. Paulson’s complicity. Hell, the government can’t even get people the correct checks in the first place.

In reality, the cable/satellite/OEM community is sure to get a nice bump in HDTV sales and, presumably, new or improved subscriptions by accident thanks to this government-issued windfall.

Believe it or not, I’m not the only one arguing for our right to blow these vaunted stimulus checks to hang an HDTV on a wall that might be abandoned due to foreclosure long before the next Super Bowl.

But I think all parties missed/are missing the boat by not aggressively advertising both the DTV transition deadline and the fact that great 42” HDTVs are now selling for almost exactly the amount of their “tax rebate” checks.

What are you going to do with that $1,200 anyway? Pay the mortgage? No, that’s a drop in the bucket on the foreclosure highway. Give it to the credit card company? Already turned off the ringer. Buy a week’s worth of gas? If you’re lucky.

A little perspective now. Back in February, the city of Oakland, Calif. decided it would be a great idea to buyback handguns from anyone at $250 a pop. Show up on the designated day with a firearm, any firearm, you got $250—no questions asked.

Anything to get guns off the street.

Problem was, the program only budgeted enough money to buy 320 guns. Period. They got 1,000 guns. Tried to issue rain checks. It wasn’t a good situation. At all. There are hundreds of people still out there (the kind of people who happen to have spare guns they won't miss) waiting for their $250. 

Note to Treasury Department/Cable Operators: Don’t run out of stuff.

Instead of mailing or direct-depositing $1,200 to every Tom, Dick and Harry, work out a volume deal for, I don’t know, 15 million 42” LCDs with Vizio. Get Comcast or DirecTV to slit each other’s throats to get first crack at signing up roughly 13.5 million new (non-paying) subscribers. Non-paying for now.

Funny thing about the cable/satellite companies. Unlike the banks holding your mortgage or Visa with its 17.9% vig, the TV company has the hammer. It’s black and white. Sometimes they do it by accident. One night you’re watching The 2007 World Series of Poker, the next morning Tivo didn’t record Mike & Mike In The Morning on ESPN2 because you’ve…been…cut…off.

One way or another, people will find a way to pay that cable bill because it’s only slightly less important than air—especially to people who have only known Mama’s Family (fuzzy) for years. Show them Discovery Channel in HD one time and they’re customers for life.

Then you can worry about Interactive TV and VOD and whether it’s “fair” or not to charge an extra $10 a month to watch a dozen professional football games.

There’s your stimulus plan. Lots of TVs sold. Lots of receivers installed. Another 13.5 million people back in the game. Information abounds. Content thrives. Generations of customers created.

Why isn’t Hank Paulson giving Sunday afternoon’s keynote?

Posted by Larry Barrett on May 16, 2008 | Comments (1)