TW Cable Optimizes Demand Services

Sep 20, 2004  •  Post A Comment

With digital video recorders available in 30 of its 31 markets and video-on-demand deployed in all its systems, Time Warner Cable hasn’t played favorites with either new service. Rather, the operator has found that DVRs and VOD work in lockstep to create an “optimal solution” that makes customers less likely to defect to satellite.

As in many technological areas, Time Warner has taken the lead in the cable industry in deploying both services. While the company hasn’t been as vocal as Comcast in support of VOD’s specific competitive advantages, nor as focused as Cox has been in its promotion of DVR service over VOD, for the time being, Time Warner has instead embraced both equally. It also has the most and deepest experience in delivering both services simultaneously.

Less Churn

Time Warner’s consumer research illustrates what most cable industry executives surmise-that VOD and DVRs are indeed complementary.

That research shows that 81 percent of homes that have DVRs also use VOD, compared with a 51 percent usage rate for VOD service in non-DVR homes. It also shows that in Time Warner’s Memphis division, households with DVRs were 50 percent more likely to buy movies or VOD content.

Time Warner Cable counts 600,000 DVR customers and has found that cable subscribers with DVRs are 20 percent less likely to churn out of Time Warner’s cable service.

“We have enough consumer experience now and enough insight from a factual standpoint to say absolutely and without reservation that they are complementary,” said Chuck Ellis, chief marketing officer for TWC. “You see a higher usage of VOD in DVR homes, and they tend to work in concert with each other.”

DVR customers are also most satisfied with their cable service. The MSO’s research found that 96 percent of customers with DVRs say the DVR is a good or excellent value; 92 percent intend to keep the DVR; and 75 percent have recommended it to a friend.

Mr. Ellis said the popularity of DVRs isn’t to the detriment of VOD or any other service. While the feedback suggests DVRs rank near the pinnacle of consumer satisfaction, the tandem offering of DVRs and VOD is what is most powerful, because it creates a new consumption experience-TV on the consumer’s schedule.

“The whole [cable] platform is aimed at making customers’ lives simpler and easier to allow them to get what they need when they want it,” Mr. Ellis said. “People who utilize these capabilities and find they can access programming information and content and news on their schedule tend to consume more of what it is they want.”

That’s also the value proposition TWC aims to convey. On the brand level, the message has been that the entire on-demand platform, including DVRs and VOD, resolves the conflicts that untimely TV schedules place on consumers’ lives.