For some cable operators, video-on-demand is the year's key deployment. At Cable One Inc., VOD might one day be a platform worth rolling out to its more than 720,000 customers. But for now, digital video recorders — or at least some of the functionality associated with the equipment — are more in demand.
When Cable One makes a decision on what new services to deploy and when — even if it flies against the grain of what its fellow MSOs are doing — executives from The Washington Post Co.'s multichannel unit believe they have consumer sensibilities on their side.
1,000 a month
That mindset comes from a long-running relationship with market research company Significance Inc., which doesn't let a month go by without surveying about 1,000 people in the areas Cable One serve.
A major VOD survey last fall indicated that the concept wouldn't take off in Cable One areas. Pause, playback and fast-forward features generated strong interest, though.
"That you can do with the PVR," Significance president Nicholas Androulidakis said, referring to "personal" video recording. "Now we're exploring what kind of PVR technology Cable One should offer."
That research project will be wrapped up next month, after which several directions will be considered.
Since 1996, Significance Inc. has provided ongoing market, or strategic, research for Cable One, on topics ranging from digital services to service-call quality.
Jerry McKenna, Cable One's vice president of strategic marketing, credited Significance for unearthing valuable marketplace insights that led to numerous successful campaigns.
"Over the long term, it's helped us very much," he said. "Understanding your customers' needs makes you better able to meet their needs and get higher revenue per customer. The benefit of this approach, having them as an ongoing monitor, is you get constant customer and non-customer information."
Androulidakis, whose Upper Saddle River, N.J.-based company counts General Foods, Nikon, AT&T Corp., IBM, Citibank and Club Med as clients, loves Cable One.
"They respond quickly to what you provide. You have a flat management structure there, where everyone important comes to your presentation. You're not going through 12 levels to reach the CEO," Androulidakis said.
Cable One spends about $1 per subscriber a year on its work with Significance. Cost is one reason why more cable operators don't establish market-research relationships, McKenna and Androulidakis acknowledged. Perception is another, as the cable company knows better how to operate than an outside institution.
What firms like Significance offer, though, is a greater depth of knowledge about not only what people think about a particular service, but also who's delivering the service, McKenna added. "I can get that kind of information MSO-wide, by division and by individual systems, so we can measure performance in a more comprehensive way."
"If I can portray what subscribers and non-subscribers think and feel about their cable system, these owners can come up with the best ways to deal with those thoughts," noted Androulidakis. "This is not about taking the water temperature once a year or every three months. This is talking to cable customers, [satellite] customers, broadcast-TV consumers all the time."
In one early study, Significance found that outages topped the list of situations that shaped customer-service attitudes. Cable One management developed a number of practices to deal with outages and outage prevention. Since then, the number of outage instances per year has been reduced by 40%.
When Cable One introduced digital service for free at the end of 2000, Significance surveyed customers on various price points, which new digital-basic channels from a list of 60 subscribers wanted and how loyal customers would be once a charge was introduced.
The data influenced Cable One to offer its digital combination of multiplexed premium channels, pay-per-view, DMX Music and TV Guide Interactive for $8.95 per month in early 2002. Cable One entered 2003 with a 32% rate of digital penetration.
Twenty-three channels have been added since, including The Outdoor Channel and Outdoor Life Network. "The research showed that our most glaring programming need was for outdoor lifestyle content," McKenna said.
Among the future subjects Significance will tackle: voice-over-Internet protocol telephony, high-speed Web music services and high-definition TV.
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