Down the broadcast digital-TV homestretch, cable operators are poised with special offers — including same-day installs in some markets — to win the business of America’s analog-television procrastinators.
Close to half of the nearly 1,800 full-power TV stations in the U.S. have already switched to digital-only operations and the remaining 974 stations will end analog broadcasts on Friday, June 12.
But the biggest markets have yet to cut over, including New York and Los Angeles, both of which have large Hispanic populations, said Time Warner Cable chief marketing officer Sam Howe.
“We emotionally feel the biggest date is ahead of us,” he said.
Pay-TV providers are likely to pick up 200,000 to 400,000 net subscribers in the current quarter, largely thanks to the June 12 switchover, said Bruce Leichtman, president of Leichtman Research Group.
Some gains already
Still, given the publicity leading into the original Feb. 17 DTV transition date, the first quarter of 2009 was probably when operators experienced their biggest gains. Major video providers added a net 900,000 new subscribers in the period, Leichtman noted.
By contrast, the digital-TV cutover will help mitigate the historically weaker second quarter. “Without the transition, Q2 could have been the first ever negative-growth quarter for the multichannel-video industry,” Leichtman said.
The DTV transition through April had prompted 5% of U.S. television households to subscribe to a cable, satellite or telco service in the past year, according to a survey conducted by research firm Knowledge Networks.
According to Nielsen Media Research, there are about 114 million U.S. TV households; 5% of those would represent 5.7 million homes.
Of 2,498 TV households Knowledge Networks surveyed from Feb. 20 to April 11, 8% bought a digital TV or an HDTV set specifically in preparation for the transition and 5% started a new pay TV subscription, also specifically in anticipation of the switch to all-digital broadcasts. The results have a margin of error of 2%.
Comcast, for one, aims to acquire even more subscribers. Last week it launched a nationwide “rapid response” installation initiative promising to connect cable-TV service for consumers within 48 hours — and same-day installation in many markets.
The cable company is offering basic cable for $10 per month for one year, or free basic cable for 12 months for new customers who sign up for at least one additional Comcast service. Basic cable in most Comcast service areas comprises 20 to 30 channels, including broadcast networks, shopping channels and local PEG channels.
Comcast’s same-day installs are available in markets including in Massachusetts, New Hampshire, Connecticut, Vermont, Maine, Oregon and New Mexico.
The strategy in trying to win over-the-air households is to get a foot in the door with video, but also to market other products like phone and Internet services, said Jay Kreiling, Comcast vice president of video services.
“What we’ve seen is that they’re no more likely to churn than customers on other acquisition offers,” he said. “That’s been kind of a pleasant surprise going into this.”
Time Warner Cable’s Howe said between 18% and 30% of former over-the-air TV households take another product, depending on market. In addition, about half take digital cable. “We expect there will be a decent upsell quotient,” he said.
However, Howe added, because the Feb. 17 “hard date” was pushed back to June 12, “what we don’t quite have the benefit of is the excitement of the consumer press, making a call to action. It’s a concern that it’s not a front-page story in USA Today.”
To that end, the cable industry has planned one last PR push.
The Cable & Telecommunications Association for Marketing has lined up at least 16 radio interviews starting at 7 a.m. Eastern Monday (June 8), featuring cable spokesman Steve Effros, president of Effros Communications.
The strategy isn’t to directly promote cable as an answer for Americans who may be losing access to TV, according to Effros: “I say, yeah, I’m a cable guy — I’m part of the effort to make sure people are prepared. … In this instance, it is to the benefit of the cable industry to make sure this transition happens right.”
'The last round’
Effros said he expects to provide interviews with radio stations in markets including New York, Boston, Baltimore, Orlando, Minneapolis and Seattle. He added, “This is hopefully the last round. It gets very tiring talking about this.”
Some operators aren’t expecting much action around the DTV switch.
Massillon Cable TV in northeast Ohio, which has 45,000 video subs, is nearly 70% penetrated in its footprint and most of the remaining households have satellite, said president Bob Gessner.
HERE COMES THE HARD DATE
Special offers from some providers tied to the digital-TV transition:
Basic cable for $10 per month for one year, or free basic cable for 12 months for new customers who take at least one additional service; same-day and 48-hour “rapid” installs.
Time Warner Cable:
Direct-mail offers of $7.99 to $9.99 per month for one year for lifeline basic (20-25 channels).
: Limited basic video for $9.99 for 12 months or free limited basic and 5 Mbps Internet for $39.99 for 12 months from May 15 to June 30 (same-day install offer available June 4-7).
Targeted promotions on discounted packages starting at $29.99 per month for 12 months including local channels; Web site features DTV countdown ticker.
Efforts include an informational site (dubbed the “official digital transition headquarters”) and marketing for its DTVPal converter box.
“Let’s say 98% of the people in our area already have something,” he said. “That’s potentially only 3,000 customers left — and we’ve tried for 40 years to get them to take services, and they’ve said no.”