Reality Check, Post Sept. 11


If Horowitz Associates Inc. is on the mark, operators that offer enhanced new services should fare pretty well, despite the economic downturn that preceded — and still lingers after — the tragic Sept 11 attack on our nation.

In discussing his company's new report, The State of the Media Economy 2002, Horowitz Associates Inc. president Howard Horowitz acknowledged that this year's numbers gauging consumer interest in new cable services are lower than last year. But that's mostly due to penetration gains in 2001, he said.

This year, given the Sept, 11 tragedy, the research company added a special, separate section to the report that measured the event's impact on consumer demand for cable modems, additional channels, bundled services and interactive features.

The 1,500-participant study verified that consumers are indeed "cocooning," or spending more time at home and traveling less. More important, since Sept. 11, some 52 percent of respondents said they're much more interested in what's going on in other parts of the world. Some 20 percent said their television viewing habits have changed since Sept. 11.

Of course, that could mean anything. They might be watching more news, or they might have the TV set shut off to spend a night of quality time with the family.

Meanwhile, a good chunk of the respondents said they're now more concerned about their personal finances. But oddly enough, they also said they're slightly more bullish about new enhanced cable services. Go figure.

Like all research, there are Pandora's boxes that, once opened, raise more questions than pollsters originally intended to measure. This study is no exception.

Interactive TV Works Inc. head Craig Leddy, who did some of the number-crunching for this study, said there was a "Ground Zero effect" at work. Those who lived furthest away from lower Manhattan responded more positively, but even there, the impact on the overall results of the study was not significant.

There were also some gender differences in the responses. Women were more concerned than men about personal finances, more interested in other parts of the world and spending more time at home with relatives and friends.

Leddy's take on this body of research: While consumers' interest level in new enhanced cable offerings seems to be down from last year's reported levels, it's more important than ever for cable operators to spell out what the actual new offerings can do. When that is done, Leddy said, consumer-interest levels rise.

Horowitz also advised that although consumers did not respond as avidly to new cable offerings as they did last year, the level of interest in these new services was still pretty high.

"Operators should not be complacent about marketing now," he said. And that's sound advice.

Overall, this survey's results just don't seem to mesh with the daily headlines about layoffs, anthrax scares or Osama bin Laden's whereabouts. These survey respondents seemed to be getting on with their lives, bum economy or terrorists threats notwithstanding. For example, only 12 percent said they had postponed making a big purchase. That's good news for all engines of commerce.

And better yet, despite their concerns about personal finances, only 13 percent of survey respondents planned to spend less money on home entertainment — such as cable television.