Survey: 15% Game for New Bundles

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As cable operators pitch packages of services, the latest Multichannel News/Taylor Nelson Sofres Consumer Poll indicates that a fair level of cable subscribers are interested in the bundle.

In a Taylor Nelson Sofres survey of some 500 U.S. cable subscribers who did not subscribe to a bundle, 15 percent said they were willing to buy different pairs of new-media services at a monthly fee from their local operator, while 85 percent would not.

Survey respondents were asked to choose between three pairs of services: digital-cable tier/high-speed Internet access, digital cable/telephony and high-speed-data/telephony.

In each case, 15 percent of participants responded affirmatively to those selections.

When more options were added to the bundle, the percentage of people interested in taking them declined:

  • 12 percent of this poll's universe were inclined to buy a combo of digital cable, high-speed Internet access, telephony and video-on-demand services;
  • 9 percent of the group were interested in getting all that, plus interactive TV, under a bundled arrangement;
  • 9 percent also were interested in a combo deal that included home networking in the mix.

Taylor Nelson Sofres collected the data in late February from Express Omnibus, a weekly phone survey of 1,000 Americans over 18. Express uses a national probability sample of U.S. households, with data weighed to reflect U.S. Census distribution of household characteristics. The margin of error is plus or minus 3 percent.

SOUNDS RIGHT TO COX

For Cox Communications Inc., the first operator to market digital cable, high-speed Internet access and telephony in bundled fashion in numerous markets, the survey results do measure up to what the MSO has reaped in its bundling efforts so far — especially among cable subscribers of color.

Of the company's 6.3 million subscribers, 19 percent are connected to a new service bundle, according to Cox senior vice president of marketing Joe Rooney. In Orange County, Calif. — where Cox fired the opening salvo in its bundling effort — 46 percent of subscribers are hooked up to digital cable and high-speed Web or telephony combos.

Cox recently launched its "Entertainment On Demand" free VOD project in its San Diego and Hampton Roads, Va., systems, and it will be some time before VOD figures in the company's bundling picture.

More telling, the take level among subscribers of color for various bundling options — including those with a higher number of option elements — was higher than in the overall poll sample. Twenty one percent of African-Americans surveyed, along with 12 percent of Latinos, Asian-Americans and other minority subscribers, wanted to buy a bundle that includes digital, VOD and ITV channels, plus high-speed Web, telephony and home-networking services. That compared with just 8 percent of all poll participants.

To this point, Cox's bundle take rate is stronger among African-American and Latino homes, Rooney acknowledged. In fact, 37 percent of Cox's African-American subscriber population — as well as 32 percent of Latino subscribers in its markets — are multiple revenue-generating units, compared to 29 percent of Caucasian Cox subscribers.

'TERRIFIC' FOR PHONES

"One thing that is not widely known is that Latinos are terrific telephony customers," Rooney added. "They are more likely to use caller ID and other features. They get the difference those features can make in their lives.

"We think there's a tremendous opportunity for us [and other operators] to sell these bundles among people of color."

To buttress its bundling crusade, Cox has worked with a number of marketing and advertising agencies to reach the Hispanic population, including Latino-focused Ad Americus.

At the MSO's Phoenix system, Spanish-speaking customer service reps handle new-service inquiries from Latinos, and Hispanic tech employees are dispatched on installation calls. Local management there is in the midst of developing a billing statement in Spanish, so those customers can pinpoint what they get in their own language.

"One thing we've recognized is that in order to reach this audience, you have to demonstrate an end-to-end experience which goes way beyond just translating messages into Spanish," Rooney said. "You market them through their language and culture. And we're also using other agencies and product teams to make sure we're speaking properly with other consumer segments."

NEWNESS FACTOR

As to the poll findings indicating consumer recalcitrance to multiple service packaging, Rooney attributed the low turnout for bundles incorporating VOD, interactive TV and home networking to a general dearth of consumer awareness about the applications.

"The lack of understanding is out there because these products are so new," he said. "When they see the value in having those products, that will rise. For example, home networking is about sharing content on a variety of communication platforms. Those platforms are coming."

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