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Subs Payment Habits Tough to Change

4/26/1998 8:00 PM Eastern

Video customers may finally be ready to put the check in
the mail just once a year, instead of monthly.

But cable operators will have to do something for them in
return: discount the total programming bill for the year by 5 percent.

That's according to the latest CTAM Pulse report
on bill-payment options, which screened preferences on everything from pay-by-computer to
the time of the month that subscribers would like to see their bill hit.

Bruskin Goldring Research conducted the survey of 565
people responsible for paying their households' bills as part of the OmniTel Omnibus
study, conducted between Feb. 27 and March 2. Of those 565, 472 subscribe to cable and 60
are satellite-TV customers.

In every payment-option category, personal computer and
Internet users were more open to change in their payment options than non-Net users.

The annual subscription with discount was most popular
among the satellite-TV homes. Indeed, many of them already pay that way. But 26 percent of
the cable households said they would use that option. Equally popular among cable
customers was the concept of a coupon book, similar to those issued by home-mortgage
issuers (see chart).

The latter figure should be viewed with dismay by
MasterCard International, which said it is launching a "Service Industries Incentive
Program" -- targeted at the cable, insurance, utility and other telecommunications
industries -- in order to promote credit-card bill paying.

These categories represent 90 percent, or $500 billion, of
monthly bill paying, yet 98 percent of that total is paid with checks, according to the
credit-card giant.

Cable operators that sign up for the "Recurring
Payment by MasterCard" program are entitled to a special-incentive interchange rate
(to be negotiated), the company said.

MasterCard, of course, has its own supporting data: Its
research claims that 36 percent of recurring-payment clients would switch to a service
provider that offers a credit option. Existing cardholders also said they would like to
consolidate bill paying.

Of course, the credit option is of benefit to MasterCard,
too. More than 70 percent of consumers said they are more likely to retain a credit card
with other business transactions tied into it.

MasterCard said it would provide cable operators that
participate in its "Repeat Pay" program with statement inserts, on-hold message
scripts, invoice and statement message copy and preauthorization forms. Repeat Pay is a
12-month commitment.

According to the CTAM report, MasterCard is the
third-most-popular credit-card option (17 percent said they used it on a regular basis).
It was topped by Visa (29 percent) and bank-debit cards (21 percent).

Any shift away from monthly payment by check will be a
great sea change. The report found that 77 percent of subscribers pay their bills that
way, and 16 percent pay in person.

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