Our fabulous summer college intern Lauren Coyle — along with millions of other students — is heading back to hit the books, and that's a very good thing for cable companies, as Martha Stewart would say.
That's because MSO second-quarter earnings reports once again showed the typical seasonal dip as students pack up their gear and head home in May. Those students don't just disconnect their basic cable television service — now, as cable operators can attest, they are also creating even greater churn by disconnecting cable modems as well.
For cable operators, trying to figure out this customer-relationship management (CRM) problem is a daunting task. In fact, two cable executives whom I spoke with last week told me that there really wasn't much anyone could do about it.
The dynamics of the college market are unique and complex. Cable operators traditionally sell their services at bulk or wholesale prices to campuses which, in turn, sell that service to students at retail. Often the transaction is seamless, appearing on the tuition bills parents find themselves footing.
Then there's another dicier and more expensive dynamic: Students who live in off-campus apartments often require costly truck rolls, and will more than likely turn off cable service nine months later.
As The Wall Street Journal
pointed out in an Aug. 7, 2003, article titled, "Cell Use Leads Schools to Alter Phone Options," colleges are now severing their connections with long-distance phone companies.
Instead, they're striking deals with cell-phone providers and, in turn, selling students the phones at attractive monthly fees.
The diploma-seeking crowd could be a very interesting group for cable marketers to target because they — more so than their parents who pay the bills — are more likely to already have high-speed access via DSL or cable modems in their dormitories.
Yes, cable marketers are powerless over the seasonal migratory habits of college students. But they should be zoning in on this group, much like cereal makers and toy companies advertise to children watching cartoons on TV.
This could be a boost to cable-modem sales, which are already slowing down even as the telcos lowering their digital subscriber line prices, while cable operators continue to raise their prices for modem service.
Imagine what it was like just several years ago to come home, after being on a T-1 line all day, and contend with dial-up service. Yuck. Many working adults — the early adopters of cable modems or DSL — soon figured out there was definitely a better mouse trap out there.
Now that cable-modem growth has stalled, why not aggressively market and use local avails in targeted systems during the second quarter — the most challenging quarter, when college kids disconnect — to urge them to get their parents to upgrade their computers at home?
Personally, I'd rather have a kid glued to the Internet to 5 a.m. rather than carousing with his pals and partying it up until the wee hours in the morning.
College kids could become a cable marketer's ally, instead of an annoying second-quarter dip each year.