NEW ORLEANS—Cable operators realize they must have the right programming mix and marketing messages to reach Spanish-speaking and other multicultural communities—but face the continual challenge of balancing those opportunities with keeping pricing competitive and conserving bandwidth for other revenue targets.
So said a panel of experts on the topic at a breakfast session Tuesday at The Cable Show, some from the operator side and others with programmers.
"There are some real business scale issues an operator has to deal with" in deciding which multicultural-targeted services to add and whether to package them in a tier or give them wider distribution at a system level, Cox Communications VP of acquisition marketing and sciences Tony Maldonado said.
Adding services increases the wholesale cost and potentially what a subscriber pays. But omitting a service that appeals to a particular market segment can lose those customers at the point of sale. Adding a service that doesn't perform well can be a problem because subscribers don't like to see networks subtracted from tiers they have paid for.
"You have to be really diligent on the operator side about what you add and when you add it," Maldonado said.
Cox and other cablers realize, though, that especially in some markets, Hispanic and other programming, such as to Asians, can be vital.
William Ortiz, senior director of corporate multicultural marketing at Time Warner Cable, said TWC has set a goal of being the No. 1 provider of Hispanic programming in relevant systems. The centerpiece: Paquetazo, a $34.95 product that translates to "the package of all packages." It contains 52 Spanish-language and 105 English-language services. Early results are encouraging, he said, but there are no current plans to offer it in other markets.
TWC's footprint covers 46% of the U.S. Hispanic population, including top hubs New York City and Los Angeles, Ortiz noted. Adept marketing of Hispanic programming also is a key to success in Los Angeles and Dallas, markets TWC acquired from Adelphia and Comcast, he said.
Danielle Wade, VP of customer service and marketing at Bright House Networks in Bakersfield, Calif., said 40% of her customer base is Spanish speaking. So Spanish-language programming is essential. But she mentioned BHN has other initiatives going, including a minutes-based digital phone service that competes for calling-card sales. "Telephone services require bandwidth allocation," she noted. "And high speed data requires bandwidth."
Programmers point out the flipside: that a customer who buys cable as a result of multicultural programming that appeals to them are customers who can be upsold into the triple play.
Univision Communications executive VP of distribution sales and marketing Tonia O'Connor said she urges operators in areas where Hispanic populations are growing fast—such as North Carolina, Atlanta and New Orleans—to widely distribute programming such as is on Univision and its cable network, Galavision.
To Latino families, entertainment and togetherness as a family are important, she said. Once sold cable, "you're in great position to sell them broadband services, telephony," she said. "There's an incredible growth opportunity there."
Laureen Ong is chief operating officer at STAR, the News Corp.-owned company that's the leading media and entertainment provider in Asia. She said Asians in the United States are maybe 6% of the population, which isn't a huge number. But they are growing fast and have discretionary income to spend, to help drive $40-$50 tiers, she said. One statistic she cited: among Indians from India in this country, one in nine is a millionaire. "That's a statistic that should make you sit up,” she said.
Ortiz conceded that cablers "are at risk" in certain markets if they fail to add non-Hispanic multicultural TV services, such as ones aimed at Koreans, Chinese and Japanese. Those services can be sold as premium channels at $15 or more. "It is a good revenue opportunity for the right MSO with the right audience."
While TWC is focused on Hispanic programming and marketing at the moment, the approach is setting the foundation for other ethnic initiatives, Ortiz said.
He also said it was key to get relevant programming and market it adequately. Skilled customer service is also key.
The panel—which also featured GlobeCast WorldTV VP Lisa Coelho, who pointed out the U.S. has 23 million potential cable customers who have neither English nor Spanish as their first language—was organized by Multichannel News and B&C magazines.
For more news from NCTA's Ther Cable Show '08, click here.