When Massillon Cable TV president Bob Gessner determined he needed more high-definition channels to stave off competition from direct-broadcast satellite companies, he decided the solution was a total conversion to digital delivery, eliminating analog pass-through to his cable customers.
So, he got a waiver from the Federal Communications Commission in March to convert all of the 45,000 homes his company serves to digital reception.
The Massillon, Ohio, firm is one of three cable operators that have received waivers to convert now to all-digital. Bend Broadband of Bend, Ore., Mediacom Communications and Bresnan Communications have also received the FCC’s blessing to make that switch in some of their systems.
So far, Massillon has converted about 15% of its total subscriber base since the company actually launched conversion marketing at the start of August. Marketing is done in groups of about 1,000 homes.
Massillon is offering three “Mini-Max” low-cost converters free per home. So far, 18,000 converters have been distributed and the self-install process has been so well explained that the company had done only 300 follow-up service calls, Gessner said.
Gessner is relying on partners to smooth the process, including a call center to which he can outsource DTV-specific inquiries; and a crew of dedicated workers at the county-run workshop for the developmentally disabled to fulfill converter orders that are made online. There have been glitches in the process: Massillon is currently running low on the converters, the victim of the manufacturing slowdown in China caused by the Beijing Olympic Games. But the company is expecting its largest shipment to date about Oct. 26, “then we’ll be going full-throttle again,” he said.
The process relies heavily on customer communication: Massillon 'touches” a subscriber 25 times in a 28-day targeted marketing push with mailers, door hangers and telephone calls. High-speed data users are redirected when they log on, using software from vendor Front Porch, to messaging about the conversion.
The first week brings an eight-page mailer, explaining the benefits of an all-digital conversion — “a happy message,” Gessner said. On average, 4% of consumers order something as soon as they read that booklet, the company has found.
Each week, the message changes: In week two, consumers are urged not to let their TV go dark; in week three, they’re advised they could find themselves standing in line in a cold parking lot in February if they wait. By the fourth week, they’re advised Massillon won’t forget them, as the company moves on with offers in other areas.
The response rate averages 15% per each week of the marketing drive, said Gessner.
Consumers are directed both online to Massillon’s Web site, or to a toll-free phone number.
Gessner realized early on that Massillon didn’t have enough phone lines into its own call center to handle all the calls he anticipated from this conversion, so he contracted with Active Support Call Center in nearby Twinsburg, Ohio, a division of remote-control maker Universal Electronics. Nor did Gessner want to hire and train personnel he’d have to let go in six to eight months.
That call center handles customer-service overflow from major MSOs and has technical expertise in this issue. Gessner said it also charges per minute of talking time, not by the transaction or the hour.
Brian Dean, manager of the 180-seat call center, said Active Support is handling about 3,000 calls a month from Massillon customers. The most common questions relate to the drop-dead date for getting converters, and what it will cost consumers.
The center has the ability to transfer calls to Massillon that deal with non-DTV issues. Dean said the cost to the operator for Active Support services vary, depending on the metrics for the work. For instance, a customer that wants 100% of calls be answered in 30 seconds or less pays more than an operator with slower response standards.
Active Support is geared up to market services to other operators who need extra phone support with DTV conversion efforts.
Orders made by phone and online are fulfilled by The Workshop. This venture of the Stark Co., Ohio, Board of Mental Retardation and Developmental Disabilities, provides jobs to developmentally disabled adults. A special computer interface helps them create labels and prepare converters for next-day shipping via UPS.
So far, 30% of orders have been made via Active Support; 15% have been made online; and 10% have been recorded at Massillon’s in-house call center. Forty-five percent have been fulfilled at Massillon’s payment locations, Gessner said.
“I’ve seen it happen myself many times: Someone comes in to pay their bill and they are asked, 'Do you have your boxes yet? No? Well go right over to that desk, because they’re free,’ ” he said.
“It’s gone pretty well,” he said, noting that though the conversion is disruptive to consumers, “three converters free, that covers a lot of sins.”
Gessner and Massillon have learned a few things along the way. For instance, contact people on Tuesday, Wednesday and Thursday. They won’t act on the weekend, and Monday is too busy, he’s found.
Also, word of mouth will add to your anticipated traffic: each month, 20% of traffic came from consumers in areas where Massillon hadn’t marketed. Those people would show up in the payment centers with photocopies of the mailers received by friends, he noted.
Massillon will spend $6.5 to $7 million to go all-digital, a process that should be completed by Feb. 17, 2009. The benefit will be the recovery of 500 MHz of spectrum to launch 50 to 70 more HD channels.
Gessner is already looking toward the next step: the development of a small, low-cost digital to HDMI converter for small HD sets. When those aging 15-inch sets in the kitchen blow up, consumers aren’t going to replace them with 54-inch plasma screens, Gessner said, and they won’t want an HD converter that’s bigger than the set. He wants a converter he can rent for $2, one that can be Velcroed to the back of a flat screen.
“We could [market] thousands and thousands of those,” he predicted.