Digital Causes Customer Confusion

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Most consumers are still confused about digital TV,
according to a recent CTAM survey.

One-third of the surveyed consumers didn't know what
digital television was. One-half said they thought they knew, but many had no idea what
services were actually available as a result of digital technology.

Nearly one-quarter of those who said they knew about
digital TV believed that it meant better quality, including clearer and higher-resolution
pictures. Slightly less than one-fifth of that group thought that digital television meant
new technology.

One survey respondent said about digital, "It's a
satellite, so you can get channels all over the world." Said another: "When you
talk, you can see the other person and have a conference call."

About one-quarter of those surveyed thought that they could
get digital without having to subscribe to cable-TV or satellite services. More than
one-third thought that they had to buy new TV sets.

"There really is a lot of confusion out there,"
said Barbara Gural, vice president of research for CTAM, "and confusion leads to
indecision. But consumers will respond positively to a clear message, and whoever can
deliver the clearest message will have a competitive edge."

In fact, cable operators that have launched digital cable
reported that demonstrations of the product have helped sales enormously (see
"Digital Picture Clears," in the CTAM Special Section). Another successful sales
pitch, surprisingly, has been the appeal of digital cable's interactive set-top
program guide, MSOs reported.

Not so surprising is the focus that cable operators are
placing on targeting their initial marketing efforts toward premium subscribers and heavy
TV watchers.

According to Seth Morrison, vice president of research for
CTAM, the survey confirmed that segmentation is exactly the right approach for marketing
digital.

For example, consumers in the survey who were most
interested in digital TV used online services; had annual incomes over $50,000; were males
between 35 and 49 years old; and owned large-screen TVs. Nearly 60 percent also owned
satellite dishes.

Morrison stressed, however, that other consumer segments
shouldn't be ignored, and that they should be educated about digital cable's
benefits. For example, he cited the survey's findings that two out of three
respondents said they were interested in more types of programming than they are currently
offered.

Gural said CTAM was surveying cable customers who have been
subscribing to digital service, and it would track how specific tactics and messages have
worked for different customer segments.

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