With the holiday season upon us, cable operators across the
country are beefing up their marketing efforts to make sure that direct-broadcast
satellite dishes aren't the only multichannel-video products on consumers' wish lists.
As in years past, many cable systems are tying
subscriber-acquisition campaigns to local causes by promising charitable donations with
every new installation.
But as DBS providers and their retail partners bombard
holiday shoppers with images of satellite dishes at every turn, cable operators are
countering with ads of their own that address the drawbacks of DBS and the benefits of
Douglas Craver, president and CEO of Akron, Ohio-based
Craver Marcom Inc., said DBS companies spend the largest percentage of their advertising
budgets during the holidays, "and with good reason: That's when people are buying
big-ticket items." Craver Marcom has created holiday-specific ads as part of a
year-round anti-DBS campaign for cable operators.
Most operators run some form of DBS-awareness campaign
throughout the year, but there's no question that the stakes are higher at year's end.
"DBS has turned up the volume," said Steve Burke,
president of Comcast Corp.'s Comcast Cable Communications Inc. "Therefore, we have to
turn up the volume, too. We take any competition seriously."
Through the fourth quarter, Burke said, Comcast has a major
marketing push designed to increase the sales of its digital-video products, which it
offers in more than one-third of its systems.
"We've found that when people understand what we're
offering with digital, the vast majority prefer our 'Comcast Digital' to DBS," Burke
Cox Communications Inc. promotes its digital-cable service
as "digital television without the dish," said Lynne Elander, Cox's director of
Cincinnati-based Sullivan Advertising has designed a
holiday-themed campaign for its clients focusing on digital cable. According to Joe
Orrender, Sullivan's vice president and managing partner, digital cable is, in many ways,
the industry's response to DBS.
Elander said Cox doesn't see digital cable solely as a
defensive strategy, but as one that brings in incremental revenues, as well.
According to John Aducci, director of sales and marketing
for Adelphia Communications Corp.'s Adelphia Cable Communications, DBS has probably taken
more business from nonrebuilt systems. He added that Adelphia no longer has many systems
left with 35 or fewer channels.
While Adelphia's digital upgrades weren't done specifically
in response to DBS, they've certainly helped, Aducci said. "Where we have digital, we
certainly see less movement to DBS."
Where digital is available, many operators prefer to play
up its high points including robust channel lineups, interactive programming guides
and better picture and sound quality rather than trashing the competition directly.
"People don't appreciate bashing or negative
campaigning," said Barbara Sullivan, president of Denver-based B.G. Marketing Inc.
"Companies should learn from the November elections."
Marketing digital to DBS-prone households can help
operators to play into consumer inertia. Digital may give some cable subscribers the
reason that they were looking for to stay loyal to the incumbent.
"Most people don't like change," Orrender said.
"Status quo is the thing for most people, unless they're really angry at their cable
company for some reason."
That's not to say that cable operators can afford to ignore
the threat of DBS, especially during the holidays, when consumers are most likely to open
their wallets for discretionary purchases.
Jones Intercable Inc. has found its quarterly anti-DBS
campaigns to be very effective in minimizing subscriber loss. According to Cindy Winning,
Jones' group vice president of marketing, each quarter Jones chooses control markets where
the promotions don't run. The MSO has found on a consistent basis that it does a better
job of keeping customers in markets where it runs the anti-DBS messages through
cross-channel ads, billing inserts and newspaper and radio spots.
Each quarter, Jones addresses a different DBS issue in its
campaigns. For the fourth quarter, the MSO is focusing on the cost of extra outlets for
Elander said the out-of-pocket cost for additional
receivers can be very significant for first-time DBS customers. "The audience that's
attracted to DBS and digital cable tends to be multi, multitelevision households,"
In addition to the multiroom problem, cable operators
running anti-DBS ads tend to focus on upfront hardware and installation costs, DBS' lack
of local channels and their own 24-hour-a-day local-service support.
Century Communications Corp.'s Eastern systems will use
cross-channel spots during and after the holidays to remind people that cable offers great
reception of local channels for big events like the Super Bowl.
Skip Harris, vice president of marketing for Falcon Cable
TV Corp., said that MSO is running testimonials, from former DBS customers who have
returned to Falcon, in heavy rotation through December. The company also sends bill
inserts each month highlighting the benefits of cable over DBS.
Harris doesn't believe that running ads mentioning the
drawbacks of DBS will incite cable subscribers to think about DBS more readily than they
Elander agreed. "The customers who are attracted to
the benefits of our digital programming are already aware of DBS," she said.
"They're very TV-centric, video-centric people. We're not afraid that we're going to
send them off to Best Buy to buy a dish."
Still, if cable operators were able to identify those
households that were most likely to shop for satellite systems during the holidays, they
could target them with specially designed retention promotions.
Denver-based Maglio & Associates set up a "Dish
Help" program two years ago to encourage prospective DBS shoppers to alert their
local cable operators of their plans.
Under the Maglio & Associates plan, subscribers in
participating cable systems are asked to call a toll-free number for more information if
they're considering converting to DBS. They're then connected to the Satellite
Entertainment Information Center, which offers to send them brochures within three weeks
in exchange for answers to a few survey questions.
Maglio & Associates then shares the subscriber names
and consumer data with the participating cable operator, which has the chance to win back
the subscriber before he or she makes the switch.
Jerry Maglio, president of Maglio & Associates,
insisted that the DBS brochure is neutral and unbiased. Even so, he believes that loading
a prospective dish-owner with information actually helps cable. He added that research
indicates that the more some consumers learned about satellite systems, the less they
"We believe that overloading the consumer with
information can help the cable operator's cause," Maglio said. "And waiting for
the brochure provides a built-in mechanism for delaying purchase."
The SEIC discloses to callers that it will share the
information that it gathers with the people who sponsor the program, but it doesn't
identify the sponsors as cable companies.
"The DBS industry is doing everything that it can to
take market share away from cable," Maglio said. "Cable has to fight back with
everything at its disposal."
Sullivan believes that operators should fight back even
after subscribers stray to the competition.
"If they've already installed the dish, that's going
to be tough," she admitted, "but there is some churn on DBS."
Sullivan recommended that operators train their
customer-service representatives to be ready to offer subscribers who call to say that
they're leaving for DBS better deals for example, discounts on digital television,
or one month's free basic.
Most cable operators don't try hard enough to win former
subscribers back from DBS, Sullivan added. "If my cable company rolled out the red
and the gold carpet and begged and pleaded for me to come back, I would remember that