Research: Cable Loses More Subs to Moves

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New research points to cable’s vulnerability to losing basic customers to satellite when people buy new homes, but also highlights opportunities to target new homeowners eager to upgrade their former video and Internet capabilities.

Surveys done by Peter D. Hart Research Associates for homebuilder Lennar Corp. show significant portions of new home buyers increase the level of digital video or high-speed Internet service that they buy once they move in. But new home buyers also are more likely to switch from cable to satellite, rather than the other way around.

OPPORTUNITY FOR CABLE

Armed with such data, Lennar Corp., which constructs about 50,000 of the 1 million new homes built in the United States each year, is reaching out to cable companies to gauge their interest in having Lennar steer new homebuyers cable’s way.

“Broadband voice, video and data services are becoming a more important part of the home-buying experience,” said Lennar Communications Ventures president David Kaiserman. “Decisions are more time-consuming, and we can help the homeowner move in with the services they want. New homeowners are much more likely to switch service providers to meet their service needs than is the average American adult.”

Lennar is creating an internal group that would serve as an intermediary between the home buyer and cable operator, scheduling installations before the consumer even moves into the home.

Many homebuyers are pre-ordering their homes, picking out floor schemes, tiles and carpet, much like picking out optional features on new cars, Kaiserman said. Broadband services from local providers are part of that wish list, he said.

The Hart survey — to be highlighted in a Multichannel News Webinar on Oct. 11 that also features Kaiserman and Kimberly Toonen, vice president of new business development at Cox Communications Inc. — provides some eye-opening statistics.

Hart surveyed 1,004 Americans in June, plus another 601 new Lennar homebuyers over the past two years. Of the latter group, 18% switched to satellite from cable.

There was some good news for cable in the survey. Some 38% of new home buyers had HDTV sets, versus the national average of 13%, presenting cable with an HD-sales opportunity, Kaiserman said.

Some 32% said they moved to a higher level of Internet service at a higher cost, while 30% said they upgraded their cable or satellite service when moving into a new home.

MANY CHANGE PROVIDERS

Among Lennar home buyers, 53% changed their cable or satellite service when they moved, compared with 31% of other movers nationwide and 16% for all households.

About 47% changed their Internet service, versus 31% for other home movers and 21% for the national population.

Among Lennar homeowners, satellite penetration rose from 23% to 28%. Digital cable rose from 24% to 32%, while analog cable dropped from 51% to 35%.

Lennar also found that 45% of new homeowners had bundled services, compared with the nationwide average of 27%.

New homeowners represent a golden opportunity for cable companies, Kaiserman said.

Peter Hart’s take was: “By being more open to changing their service providers, more likely to upgrade to better technology, more likely to look for an easy way to make their communications services arrangements, and having money to spend, new homeowners are the type of customers that most communications companies would value.”

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