Walking the Retailer Walk

Author:
Publish date:

Chances are, if you walk to any Best Buy or Circuit City store in Orange County, Calif., between now and the Super Bowl, you’ll run into more than just the retail chains’ salesmen.

You’re just as likely to find a Cox Communications Inc. employee, ready to explain the difference between cable and satellite HDTV service, attempting to steer you in Cox’s direction.

Branching out into retail is now a standard part of cable’s multipronged marketing strategy to drive HD set-top penetration. And Cox’s Orange County system is among those on the HD marketing forefront.

There will be 16.2 million households with an HDTV set by year’s end, according to Bruce Leichtman, president of Leichtman Research Group. He also estimates that 5 million cable and 1.5 million satellite HD set-tops will have been deployed by year’s end.

Leichtman says the 9 million home gap between multichannel HD subscribers and set owners can be explained two ways: There are consumers who by HD sets for the DVD experience, knowing they are not getting broadcast and cable channels in HD; and about 2 million homes where people think they are watching HD channels, but they are really not. The challenge for Colleen Langner, vice president of marketing and sales, at Cox’s Orange County system, is several fold: to close that gap with existing HD set owners and grab new buyers as they walk into retail stores, and convince them to purchase cable’s HD set-top.

Langner reports “steady growth” in HD penetration since the system launched the service two years ago. Orange county boasts 245,000 basic-video subscribers and the highest HD set-top penetration among Cox systems.

What has fueled the growth is a host of marketing tactics, starting with periodic newspaper inserts, then the launch of a Cox retail store and the in-store sales by Cox reps at Best Buy and Circuit City.

The system partnered with the Los Angeles Times’ Orange county newspapers on an insert to explain HDTV, in general, and what Cox offers in particular, Langner says. The alliance began last year and has involved a series of inserts in both that paper and the Orange County Register.

What’s more, “we brought Mitsubishi [Corp.] in as a partner,” and the supplements feature ads for the company’s HD sets as well, Langner says, adding: “We see a penetration bump with each tabloid supplement.”

Cox also uses cross-channel spots, bill inserts, telemarketing, direct-mail and e-mail messages to drive HD penetration.

Cox opened its own 2,200 square foot storefront in Orange county in January, serving as a payment center and a marketing venue for Cox’s triple-play services. HDTV was a natural addition.

The store carries 22 HD sets, all from Mitsubishi, Langner says, including widescreen LCD and plasma models. While Mitsubishi models are exclusive to that store, Langner says Samsung [Corp.] and Sony [Corp.] have expressed interest in marketing HD with Cox at other locations.

“The store has been highly successful,” Langner says, and has “produced steady growth. We’re hitting our sales goals.”

Cox is sending part-time employees to the eight Best Buy and Circuit City stores in its franchise area to take advantage of the holiday and Super Bowl HDTV selling season. In addition to HD, Cox has a high-speed data area in each of those stores.

The MSO currently offers a $9.95 package in the market that includes HD signals of ABC, CBS, NBC, Fox, PBS and The WB affiliates in Los Angeles, plus Home Box Office, Showtime, Turner Network Television and In Demand LLC’s two channels. There is a separate $4.95 tier with ESPN and Discovery Channel.

The system just launched TNT’s HD service this fall and expects National Basketball Association games to be a focal point for promotions this winter, Langner says. “We’re looking for more content,” she says.

Langner feels that HD has gone past the early adopter period, and is moving towards mainstream America. “As the price of TVs comes down, that changes the marketplace,” she says. “It’s becoming a general product. The early adopters are probably gone. The prices will take it into the more mainstream market, and we’re just starting to build momentum now.”

Related