Cable operators and programmers were tutored on hot-button industry issues, ranging from marketing to the Latino community to the pro and cons of video-on-demand, during "master courses" at the Cable & Telecommunications Association for Marketing Summit here.
Addressing the issue of how to target Hispanics, the demographic du jour, CTAM attendees learned how Cox Communications Inc. adjusted the original Spanish-language package it created in Phoenix, where 25 percent of the market is Hispanic.
During the course "Grow Your Cash Flow Through Proven Multicultural Marketing," Tony Maldonado, Cox's vice president of marketing in Phoenix, described how his system's original package to Latinos was $48 — pricey for an ethnic group that largely didn't have cable in the first place. That package included 14 Spanish-language networks, digital and expanded basic.
Cox stripped the package down to include only a digital set-top, the Spanish networks and broadcast basic — bypassing expanded basic — and thereby cutting the offering's price to $28.40. That effort boosted Cox's success selling the package to Hispanics. Cox's strategy is to get multigenerational Latino homes to upgrade over time and buy more cable services, including expanded basic, according to Maldonado.
Early CTAM Summiteers jammed the session on "Launching On-Demand Services," in which Charter Communications Inc. executives Kathe O'Connor, director of pay-per-view marketing and video-on-demand, and Mitchell Miller, senior director of VOD, described their MSO's experience with that offering.
O'Connor pointed out that VOD carries hefty costs for content, capital and operations. "Pay-per-view operates on a very slim margin," O'Connor said. "The margin gets even slimmer with VOD."
But an investment-bank study has projected the return on investment on VOD is 58 percent within five to six years, she noted, matching the return for high-speed data and telephony.
VOD is crucial to operators as "a gateway to interactive services," O'Connor said. She suggested that MSOs place VOD on their program lineups as a channel, making it easy for subscribers to access the product.