Cable operators and programmers looking to close the gap between the number of HDTV set owners and HD set-top box owners say the industry can use a variety of promotional and sales techniques to boost penetration levels.
Cable operators have deployed about 1.4 million HD set-tops, while direct broadcast satellite providers have deployed 600,000, but that’s well shy of the 7 million HDTV sets in the country.
“Of the 5 million gap, 75% of those are our subscribers,” said Comcast Corp. senior vice president of marketing and new products Andy Addis, speaking during a panel session at the Cable & Telecommunications Association for Marketing Summit in Boston two weeks ago. “We can leverage cross channel and do tune-in. We can take a major sporting event and wrap an HD message around it. We have to capture the imagination of new subscribers.”
Addis also said industry-wide efforts like “Only Cable Can” and consumer electronics promotions also will help close the gap. Promotions can be built around major tent-pole events, like the summer Olympics coming up in 11 days on NBC and its six cable networks.
Operators have been working with Panasonic Consumer Electronics on an Olympics promotion that began July 6. The campaign includes two newspaper inserts each week leading up to the games and has a presence in about 1,000 consumer electronics retail stores.
“HD is all about basic-subscriber growth,” Addis said, because every time a consumer buys an HDTV set, they reconsider their choice of multichannel video provider. That choice even extends to programmers, he added, with consumers deciding whether to watch HD or non-HD programming.
“Consumers love the idea of big events,” he said. “They care less about technology decisions, and they care less about how they got it. We try to leverage big events to capture their imagination.”
Comcast research shows that 40% of people learn about HD from family and friends, 20% from online sites, 20% from retail stores and 20% from on-air ads, Addis said. “It’s important we cover each of those services.”
Some of the gap likely consists of consumers who didn’t realize all that was needed to watch HD. “A lot of those people bought HD sets without realizing what they purchased, and they had the cash to do it,” said Tony Maldonado, vice president of marketing for Cox Arizona.
Clint Stinchcomb, Discovery HD Theater senior vice president and general manager, said many early HDTV set owners bought them to watch DVDs. At the time, there was little HD programming available from cable and broadcast networks. But that is changing, he said, with more channels launching, the industry needs to educate consumers about their new HD choices.
Awareness of HD is growing, he said. About 100,000 consumers registered for Discovery’s Father’s Day HDTV sweepstakes campaign. The campaign was built around the premiere of American Chopper in HD, and gave away three trips: one to the British Virgin Islands, one to Pebble Beach for a golf vacation and one to Formula One racing school in Australia.
Discovery is not the only programmer pushing HD. NBC — with arguably the biggest event in HD this year, the Olympics — will have an HD presence in about 2,500 retail outlets. And NBC talent has recorded promo spots explaining why the Games will look better in HD.
Bravo already programs a full 24/7 HD channel, said NBC Universal Cable senior vice president of marketing Mark Hotz. As Bravo HD evolves, it will be the place for top NBC Universal HD programming, such as tennis from USA Network and HDTV films from Sci Fi Channel.
NBC already programs 30 hours a week in prime time, plus NASCAR and sporting events, in HD.
Even though it’s early in HD’s evolution, the service is paying off for operators. “Twenty percent of HD subscribers are DBS win-backs,” said Cox’s Maldonado. “HD is our most successful [direct broadcast satellite] DBS win-back to date. It helps us to retain customers.”
Steve Stiger, group vice president of marketing and business development at Bright House Networks, said the average HD subscriber brings in an additional $11 per month in revenue. According to Stiger, nearly 12% of digital subscribers and 5% of subscribers overall are HD subscribers.