Researchers Ponder Value of Net, Software

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New technologies are dominating both the goals and
methodologies of cable-television researchers.

At the annual CTAM Research Conference in San Antonio last
month, researchers debated how to best use their craft to help cable systems roll out
digital channels and cable modems, and they examined how the Internet and new
computer-software programs can enhance the ways that they gather and analyze information.

In interviews afterward, research executives laid out many
of the issues that they chewed over at the conference.

"We have to figure out how to measure the impact of
digital and modem launches, how to put them in homes and how to educate consumers about
their benefits, and gauge how they impact the competition," said Grace Ascolese,
president of Ascolese Associates.

"These are new areas for cable," cautioned Pete
Gatseos, vice president of strategic research at Tele-Communications Inc.'s TCI
Communications Inc. unit. "We have to make sure that we employ the most effective
research that we can to enhance the business and to produce results."

How -- or whether -- to use online research as an effective
methodology has proven to be one of the most hotly debated topics among researchers.

Proponents of online research praised its ability to elicit
fast, efficient and cost-effective feedback from viewers, while the opposing camp pointed
out that online respondents only represent a limited group, and that people can -- and
often do -- lie with impunity on the Internet.

Most cable researchers, however, took a more tempered
approach to using online research, stressing that it was useful as an enhancement to other
methodologies, but not as a replacement.

In fact, said Marshall Cohen, president of Marshall Cohen
Associates, online research, with its benefits and drawbacks, isn't really that
different from other forms of inquiry.

"You can collect information very easy and very
fast," Cohen noted, "but as a sample, your responses -- like a mail survey --
aren't truly random."

Gatseos agreed that the "biggest weakness" of
online research is that responses are volunteered -- or, in the jargon of the trade,
"self-selected." But, he added, researchers can turn that weakness into a
strength by being able to "talk to the true believers" cheaply and continually.

Online research poses a problem for cable operators, he
said, because "you only talk to really happy or unhappy people." Consequently,
he recommended replicating online surveys with phone surveys and comparing the results.
Gatseos also endorsed focus groups as a good way for operators to keep their "ear to
the ground" and to gauge what customers both think and feel about programming.

For programmers, said Betsy Frank, executive vice president
of research and development at MTV Networks, online research is "a real good way to
check what you're doing on-air." Nonetheless, she said many of her colleagues
think that the methodology is "absolutely without merit."

No one, however, dismissed optimization software -- another
relatively new research tool that refines audience data from Nielsen Media Research
ratings to an unprecedented level.

Optimizers, which break out viewing habits in much greater
detail, have "real implications for cable," according to Frank.

As advertisers increasingly use the software to calculate
their media budgets based on precisely who they want to target and reach, she said, cable
stands to benefit by its "ability to deliver efficient reach."

Ascolese compared optimization programs to "a
microscope with a high filter."

"Everything is coming down to a unit of one," she
said. "You're getting more information about individuals, and it helps to match
like customers with like programming."

Research executives in San Antonio also spent considerable
time discussing the role of Web sites as they relate to television viewing.

"It's still an open question whether networks
should push people to Web sites," Cohen said.

Frank, who taught a tutorial at the conference with Cohen
titled, "New, Advanced Course in Audience Measurement," said Web sites could be
an ally of networks by "potentially expanding the audience," but she agreed that
the jury was still out on whether the Internet would merely cannibalize the audience.

Gauging the impact of the Internet on television viewing,
she said, would be "an absolutely critical issue" for researchers in the next
few years.

In addition to their interest in new technologies,
executives in the field remained intensely focused on bread-and-butter issues such as
competition.

In fact, one of the most popular sessions at the San
Antonio conference, "Why Consumers Switch," drew on findings from a
comprehensive study conducted by CTAM on "consumer decision-making in a competitive
environment," which the cable-marketing group is selling for $5,500.

Barbara Gural, CTAM's vice president of research, who
headed the study and who moderated the session, said the report used phone surveys and
focus groups of cable viewers who recently moved and were forced to make a decision on a
video provider.

Among the more surprising findings of the survey, she said,
was that consumers were less loyal to their telephone and cable companies than they were
to their Internet-service providers and paging companies.

That loyalty, Gural said, was less a result of quality
service than a byproduct of the hassle of changing e-mail addresses and
personal-identification numbers.

Not surprisingly, the CTAM study found that price was the
most important factor in consumers' decisions to switch providers, and that awareness
of direct-broadcast satellite companies was high due to national branding campaigns.

Gural said the study also showed that awareness among
consumers of telephone companies that offered wireline video services was significantly
lower than awareness of cable companies providing identical service. While 79 percent of
respondents could identify their cable company, she said, only 20 percent could name local
phone companies offering video service.

CTAM president Char Beales predicted that there would also
be a need for more research related to new moves by telephone and DBS companies.

"Cable," she said, "is still
underresearched."

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