Riding Shotgun on Digital Calls


What's so hard about digital? It's as easy as
0101010, right? Yet reports from the field from first-system launches indicate
installation times running more than an hour, with repeated callbacks from confused

Operators report good sales and fine take-rates, but we
haven't heard much directly from the consumer, so I decided to ride shotgun with an
installer one day in April, to see what consumers expect from their new product. My host
was Daniels Cablevision, which serves Carlsbad, Fallbrook and other parts of San Diego
County, Calif.

What I found are customers who aren't quite sure
exactly what they bought but were sold on "digital," the buzzword for quality in
the 1990s.

"I'm very illiterate about this stuff but I have
a feeling somehow everything's going digital. Besides, the installation is
free," shrugged Carlsbad resident Linda Caspole.

"If you look over there," she said, gesturing to
a dusty video game, "you'll see I have the original [generation] Nintendo. I
don't upgrade very easily."

Caspole is one of more than 4,000 customers (out of a
59,000-customer base) to go digital since Daniels launched the service Dec. 18.


Initally, Daniels added 42 channels from
Tele-Communications Inc.'s Headend in the Sky service. But the operator has already
expanded capacity, and now offers 93 digital channels, including 29 pay-per-view slots and
32 channels of Digital Music Express.

A Daniels customer can receive 54 analog-broadcast and
-satellite channels for $29.95, plus 93 digital slots for another $10 a month. Additional
digital outlets cost $4.99 a month and premium units with multiplexes are priced from $2
(Encore) to $7.95 (for Home Box Office) monthly.

The operator already had experience with interactive
installations: For two years it offered GTE's mainStreet. Because of this background,
system president and general manager Joni Odum said installers learned more quickly how to
set up homes for the digital age.

The market is also familiar with DMX; prior to the digital
launch, the system sold the audio service only as an a la carte premium priced at $7.95
per month per outlet. Odum described that version as a difficult sale but, nevertheless,
her operation sold it into 2,000 homes. It's a good feature for the digital tier, she
indicated, because it's a product with virtually no churn.

Marketing manager Susan Otto said adding a digital tier
with both basic and premium programming was a good preventative move for the system, to
prevent migration to direct-broadcast satellite. Executives said they could detect very
little erosion from competing multichannel video services.

Once the pitch goes down, all the operator has to do is
find a phone line in every room, run a diagnostic and explain a gazillion new features.


I took a run with Jackie Jones, a 20-year veteran of the
Marines, now enjoying his second career as a cable installer. He takes pride in his
efficiency, but yes, there was once an install that took him four hours; but there were
three sets involved and no colocated phone lines, he explained.

The phone hookup for the return path causes a lot of
consternation for home owners as well as installation headaches for techs, he said.

"A lot of the time they think it's gonna tie up
their phone line, or increase their phone bill, or keep the phone from ringing,"
Jones said.

The problems were demonstrated during the next two jobs.
The first stop is the Caspoles, where Jones discovers no convenient phone jack in either
of the two rooms he is to install. That immediately adds about $50 per set to the cost of
the install, for Jones must use a remote transmitter so the phone will "talk" to
the TV set.

The tech is shadowed by the man-hating family spaniel as he
goes swiftly through his appointed task, only to be told he will have to be even more
swift in his operational education. The family has to be out the door within minutes to
the airport.

He jams through "Digital Education 101" in a
hyperspeed 15 minutes. I had trouble keeping up, but Linda Caspole seemed to be getting

As Jones walked her through the navigator, she said,
"I don't even have to think anymore!" She especially liked the feature that
would allow a viewer to browse through other viewing options (displayed as a bar on the
bottom of the screen) while remaining on a single station.

"Pay-per-view's a draw, too. I don't have to
return rentals," she said.

But she seemed a little concerned that her husband, the one
headed for the plane, would not drop his preparations and come play with the new toy.

Back in the truck, Jones said the woman's concern for
the other viewers in the house who must also enjoy the system is not uncommon. The ones
who crack him up are the wives who take notes so they can repeat the directions for the
sports programming to their husbands when they get home.

Notes hardly seem necessary. Odum said the system noticed
early on that all people learn differently. So in addition to the in-person walk-through,
new digital customers get operating pamphlets on both the remote and the General
Instrument Corp. digital set-top, a troubleshooting booklet, a videotape and, as a
thank-you, coupons for free PPV movies.


The residents of the next household seemed like they would
need all the learning tools they could get. Chuck Hartzell ordered a single installation
so he could get more PPV.

"I just saw [digital] on their ad. More HBO, more
Showtime. So we thought we'd give it a try. We don't go to the movies. We used
to rent movies once in a while but it got inconvenient so we gave it up," he said.
" I really don't care about the extra channels."

Again, the first challenge was the phone line -- the jack
was behind a 3,000-pound bookshelf-headboard. Luckily, the home owner had rigged a line
out for his answering machine, and Jones linked a hard wire to that.

The second challege: finding room for the digital set-top
in the consumer's imported Chinese cabinet. I'm here to testify that the
converters work fine setting up sideways. And Hartzell seemed pleased that tightening the
connections seemed to eliminate a reception problem he had that caused a black bar to
appear across the top of the set after it warmed up.

But he had a tough time following the instructions. Three
times Jones had to repeat how to direct-dial a channel. Hartzell took to following along
and miming his instructions on a second remote.

When Jones had concluded, he asked Hartzell, "Do you
have any questions?" The retiree looked at him and uttered a prolonged,

"We're being dragged into the computer age,"
he shrugged.

The morning route's total: three digital converters
deployed, a repair call squeezed in and, hopefully for Daniels, two satisfied customers.


Two weeks later, I called back to see how the Carlsbad
consumers were doing. Linda Caspole had learned how to program favorite channels on the
downstairs remote but couldn't figure out how to replicate the lineup on her upstairs
set. She planned to bang away at it a while yet, then resort to the instructional
videotape, if she had to. Admitting defeat and calling the system would be the last

Daniels' free PPV coupons appear to be popular.
Caspole had already ordered a couple of movies to learn how to use the system. The freebie
turned out to be to the system's advantage when the woman had trouble ordering her
first movie. A screen appeared on the set informing her that her choice was unavailable at
her chosen time. She noted she wouldn't have tried again if the movie weren't
free and now she believes she has the hang of it. She plans to buy more.

But Caspole has a complaint. With all those extra channels,
where is Comedy Central? Where is VH1? (Daniels previously had Comedy Central on analog
but dropped it, but not before insomniac Caspole had gotten hooked.)

"I still don't have Comedy Central and I'm
not happy about that. More Discovery [digital versions] just doesn't cut it,"
she said.

Hartzell has bigger problems than an uncooperative remote,
but apparently the fault is not Daniels'. After the installation, the horizontal
black bar got worse and now it's accompanied by snow. The TV warrantee holder and
Daniels blamed each other, but now it appears the fault has settled on a bad transistor on
the TV.

So, Hartzell had spent his first half month's
subscription for only DMX, which he referred to as "that radio part," adding he
really loves that.

Meanwhile, Daniels continues to take orders for new digital
customers every day. But can it woo back any consumers who may have sneaked off to DBS?

"Well, I saw my first [Digital Satellite System] at a
yard sale recently, so maybe there's hope," Odom said, laughing.