Manhattan Beach, Calif.— Los Angeles-area cable operators say they stand ready to "ditch the dish" by eliminating any perceived technical or customer-service advantages direct-broadcast satellite providers might enjoy.
Tools for the fight include the rollout of out high-definition television service and video-on-demand.
Victory also requires attention to the basic details of business, such as getting things right the first time while on service calls. If that doesn't happen, the next move is to turn customer perceptions around by trying a sincere apology and making a good impression.
A sweet treat
The apology — and a little treat — is part of the strategy employed by Time Warner Cable's Los Angeles division. Part of the company's "Because We Care" initiative, the goal is to rectify problems within a single visit.
Customers forced to schedule a second service call will get a basket of cookies and a letter from the general manager, said Paul Fisher, division vice president and GM.
The cookies only cost about, $5 including delivery, Fisher said at last week's the Southern California Cable Telecommunications Association annual leadership summit dinner here.
But the snacks have delivered their intended result in a big way. Fisher said callers have told him that the apology "restored their faith in big companies."
Attention to basics has allowed Southern California regional operators to continue to grow in a tough marketplace.
Time Warner Cable now reports a 55 percent digital penetration rate in the region, Fisher said — a level that continued to grow in the first quarter, despite rate hikes.
The Southern California division now has the highest digital penetration of all the Time Warner divisions.
Other regional operators are growing as well. Cox Communications Inc., with clusters in Los Angeles and Orange counties, has hit "triple-triples": 30-percent penetration for digital, high-speed data and telephone service.
"Last year, we took the biggest hit we've ever seen" from the tough economy and competition, said Leo Brennan, Cox's vice president and general manager for the region. Despite that, "it's all about the bundle, baby," he joked.
Less than 1 percent of multiple-product homes have churned, except when residents move from the area, Brennan said.
The Cox cluster is targeting direct broadcast satellite customers. The operator's "Dish It Up" program tasking employees with finding homes in their neighborhoods that sported dish hardware and turning the addresses in to Cox marketers.
Employees collected 17,000 addresses, about half of all DBS homes in the Cox footprint, he said.
Cox will solicit those homes with offers designed to convince them to give up the satellite hardware and embrace digital cable.
Comcast Corp.'s local systems, owned until late last year by AT&T Broadband, also conducted a "Dish Out" campaign, picking up a couple of thousand returning customers, according to Debi Piccolo, senior vice president for Southern California.
The cluster has a dedicated impound team, she said, adding that she looks forward to wrecking out a few more rooftop dishes this year.
Comcast's local systems also emphasize talking customers out of leaving the cable fold in the first place. A team of retention specialists saved half of all customers who called to drop cable service last year, she said.
Adelphia looking up
The region's former AT&T Broadband systems lag their local peers in terms of digital penetration, Piccolo said. That's because when the cluster was a MediaOne Group Inc. property, it focused on analog growth.
Only 70 percent of the cluster has been upgraded, but Comcast is committed to completing that process, she said.
Adelphia Communications Corp. is struggling with financial scandal and bankruptcy, so it also trails its peers. But the regional operation has upgraded 1,000 miles of plant over the last four months, according to regional vice president Lee Perron.
Adelphia expects the upgrade to pass 80 percent of homes by the end of the year. At present, digital plant passes about 60 percent of the region, or 2.4 million homes, in the five counties it serves.
Adelphia's digital penetration rate stands at 39 percent in the upgraded area. Local executives are already looking past digital to the next wave of products, especially high-definition television.
Executives said they need to determine whether renting or selling the HDTV-compatible set-top is the best approach.
Time Warner was first to market with VOD here, and it has also jumped on HDTV. It offers seven high-definition channels, including five off-air networks, HBO and Showtime.
The channels are currently available for no extra charge, though an HD-compatible set-top box rents for $5.95 per month.
Waiting on boxes
Cox's Brennan said his region is waiting for the availability of Motorola Inc.-built boxes with HDTV capability, possibly in the second quarter. The approach will be to lease the boxes, at least initially.
"I don't want to get [consumers] all excited about the product, then send them to Circuit City, where the competition can get them," he explained.
"We were going to launch, but we decided equipment rental is not the right model," added Brian Gruber, regional vice president of marketing for Charter Communications. The company now has a goal of an early summer launch, selling the box to interested consumers.
Comcast and Adelphia executives also said they hope for HDTV launches this year.
Executives still look for the "killer content" that will drive VOD use. Gruber said he hopes for real-time encoding, which will allow a local operator to archive content like the evening news, a college course or a popular local sports contest.
For now, quipped one executive, the on-demand title with the greatest number of hits might be How to Use VOD.