The industry is moving beyond the early development stage of digital and pay-per-view by launching advanced digital services, such as subscription video-on-demand, video-on-demand and interactive television. The next challenge is to transition into more sophisticated marketing of these services.
Beyond the early adopters, cable television customers are looking at the new digital services offered by the industry and are asking themselves, "Is it worth it?" They are questioning the value proposition, and require more education about the product benefits. But let's not sell the store yet. The industry can compete using our powerful weapon — interactive digital cable — and we can win by making the consumer value proposition more compelling.
One way of making the marketing messages more persuasive is to use customer-focused research to understand what customers are saying about digital services, what's effective in reaching them and how to deliver the right messages.
Insight Communications Co. uses customer focus groups, telephone surveys and feedback from customer service representatives and other employees as a valuable source of intelligence. These methods help Insight determine how customers use the products, and what they like and don't like about them. As a result, Insight has been able to introduce several advanced digital services successfully.
If the new products are kept simple and closely tied to the television entertainment experience, interactive digital is a key factor in retaining customers and getting direct-broadcast satellite customers to come back to cable.
It's important to meet customer expectations in marketing messages, and the industry should be clear and concise with the claims it makes about digital products. Operators should be forthright about the benefits of the channels and services offered and build value on being different and better than the competition, rather than being a similar product at a similar price. This targeted, straightforward approach, along with a great product, helps reduce churn and increase customer satisfaction.
Programmers are also in a position to help MSOs with winning marketing messages. Starz Encore Group LLC's research starts with the customer, and it's not just lip service. Starz Encore has found that consumers like the "control" and "freedom" messages associated with digital and SVOD, and those messages help consumers better understand the digital platform and capabilities.
Adding on-demand services helps to make digital-cable marketing more successful, because consumers better appreciate digital cable when they realize that it's a new way of watching television. On demand is the next evolution that puts control and convenience in the hands of the viewer. It gives customers what they want, when they want it. Marketing advanced digital television services is most effective when consumers understand the benefits and experience the additional convenience and control. That's the "wow" factor!
Some programmers are seeing viewing patterns that will help the industry determine the right product mix to boost customer satisfaction with on-demand services. The product has the most value when it includes proven programming hits, such as new blockbuster movies, signature series, children's programming and smaller genre movies. Offering the right product mix enhances the consumers' gratification of watching cable television on their own terms.
Cable marketers also have the opportunity to drive more revenue with the new, on-demand technology. VOD and SVOD programming — which can be a mix of movies, special interest, children's and other programs, depending on the MSO's strategy — is being tested in several markets to determine the best pricing, packaging and promotion to generate a return on investment. Early results are promising. Operators must take the responsibility for marketing and promoting these new products in partnership with the content providers to achieve the desired revenue growth.
Make no mistake about it — it appears that on demand and ITV are the answers to getting digital to the next level. Early market tests indicate that they have captured the public's imagination and made digital an eye-popping product — a must-have, revolutionary consumer proposition that has been missing during the early introduction of digital.
Cable operators have launched VOD and ITV with success, and most cable operators are testing or planning SVOD rollouts as well. Either way, cable must rapidly deploy and aggressively market the on-demand function and interactive services, or suffer greater share shift to direct-broadcast satellite.
Let's do digital marketing right! Attend CTAM's Digital Conference being held in Los Angeles next week. It's the only conference dedicated to marketing digital video, PPV, SVOD, VOD and ITV. In addition, it's an educational event that offers field-tested case studies and hands-on sessions packed with insider insight on successfully developing, implementing and marketing digital services.