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Guest Commentary: The Digital Transition Is Cable’s Big Opportunity

Mar 2, 2008  •  Post A Comment

Stop me if you’ve heard this one: “It was the best of times, it was the worst of times…” OK, so maybe the cable industry isn’t exactly “A Tale of Two Cities,” but it sure feels that way lately. At a time when viewership numbers have never been higher, subscriber growth is nearly stagnant. But in a year’s time, that could all change.
How? Glad you asked.
The federal government has mandated that on Feb. 17, 2009, all TV signals must be distributed digitally, which means the estimated 15% of U.S. homes with analog-only TV sets will be up for grabs.
Think about it: When was the last time 15% of any market was instantly opened up the way the TV market is about to be? This is an unprecedented opportunity for cable operators to increase market share among current analog broadcast viewers—many of whom are seniors—who will need to make some sort of programming and/or hardware upgrade if they want to continue receiving a TV signal.
What does this all mean? Most likely, current analog viewers will have to take one of the following actions before the digital change-over:
– Buy a digital-to-analog converter, which would cost $10 to $30, assuming they request and receive a government-issued $40 conversion coupon;
– Spend hundreds, if not thousands, of dollars on a new digital-compatible television;
– Subscribe to a cable, satellite or telco service provider.
While there will always be a certain percentage of frugal consumers looking to spend the least amount possible to resolve the issue (option No. 1), and a certain percentage of people who are just looking for an excuse to go out and get the latest and greatest gizmo (option No. 2), the vast majority of viewers probably will look to option No. 3 as the most viable solution.
If that’s the case, then cable operators should start ramping up their recruitment efforts now to ensure they get the biggest piece of the pie and don’t get left behind by the satellite and telco companies.
The easiest way to attract these potential new customers is by offering a low-cost starter package featuring the broadcast channels they currently receive, along with some additional news and shopping channels, which, incidentally, tend to have higher appeal ratings among seniors who, despite the stereotypes, are not all on fixed incomes. In fact, according to a recent study by eMarketer, seniors are among the most affluent viewers in the U.S., with many having readily available disposable income, so it stands to reason that cable operators should be actively marketing toward this audience.
Additionally, seniors are a perfect audience to which to market premium-tier and bundled services. Those same analog TV viewers are also more likely to still be relying on the old Bell landlines for their phone and Internet service. If the cable companies aren’t proactive, these customers will rely on these same trusted companies for video service soon. Why not get ahead of the curve and offer an introductory discount bundled package now, so that by the time the digital transition takes place, you’ll already be well-positioned to increase your market share?
Also, not to be underestimated, seniors are some of the best practitioners of word-of-mouth advertising, so if cable operators are able to offer more senior-friendly products and services, there’s a good chance they’ll not only retain and even add senior customers, but also will be able to market more premium-tier products such as video-on-demand, HDTV and high-speed Internet service in the future.
America’s seniors are a valuable resource that has been largely ignored by the cable industry for far too long. Now is the time for operators to recognize the true value of the senior market and begin actively catering to it before the digital transition next February, to ensure that the future of the cable industry truly is the best of times.
Patrick Baldwin is vice president of strategic development for Retirement Living TV.

5 Comments

  1. Great post!

  2. Great post!

  3. You make blogging look like a walk in the park! I’ve been trying to blog daily but I just cant find writing material.. you’re an inspiration to me and i’m sure many others!

  4. @DUDE ABOVE – you sir are wrongly stupid and stupidly wrong. Just get out, I beg.

  5. Nice!! Great Ifo. Great People. Great Blog. Thank you for all the great sharing that is being done here.

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