Skip to main content

Forum: Marketing Digital Cable: Beyond the Early Adopters

The long-awaited era of digital cable has arrived. To date,
the growth that we've seen has been rapid, and the response from consumers has been
positive. And all without a huge consumer marketing push.

Is it simply a question of, "If we build it, customers
will come?" Hardly -- not in today's highly competitive, quickly evolving
telecommunications marketplace.

Cable programmers and marketers should not let themselves
be seduced by the current crop of early digital customers -- the "early
adopters." Early adopters may have launched the rocket ship of digital, but for that
ship to stay aloft, marketers must reach beyond the highest levels of usage and
techno-sophistication and into the basic-only universe.

In other words, early adopters are a nice start, but for
digital to become a full-fledged business, we must pick something other than low-hanging

By targeting many basic-only customers and their ilk, the
industry will be exposing an otherwise static group of consumers to a breathtaking new
concept in programming. And by doing so, we will be playing the odds -- which, at this
point, seemed well-stacked in our favor.

Consider the fact that a December 1998 CTAM study indicated
that satisfaction among digital customers is off the charts. More than 83 percent of
customers surveyed indicated that they were "likely" or "very likely"
to continue subscribing to their digital-cable service, while roughly one-third of them
indicated an increase in perception about their cable operator based solely on their
digital experience.

Make no mistake: Those are huge numbers.

There is no roadmap for success, but there are a number of
critical factors that will help to ensure that cable maintains its role as the technology
and content leader in the information age. Content and service providers must work
together to grow and promote digital cable and related digital services. There are four
ways that we can do this:

First, all companies -- operators and programmers
alike -- must clearly communicate the compelling benefits of digital cable.

Second, operators must "take digital back"
from direct-broadcast satellite and the broadcast industry, both of which have been much
more aggressive in positioning themselves as digital champions.

Third, programmers need to strategically utilize and
leverage their core assets to drive the way that customers view television.

Finally, operators and programmers must partner at
the local level in order to ensure our mutual success.

The common thread among these four? Marketing: For the
industry to achieve digital supremacy, it is essential that we market in ways that we
never have before. Each company must sound the trumpet of digital, and together, all of
these messages will make the walls of consumer resistance and misinformation fall.


In a recent Horowitz & Associates Inc. study, the
percentage of respondents who were interested in having existing analog networks offer
additional new digital channels was more than 50 percent for stalwarts such as Discovery
Channel, ESPN and MTV: Music Television.

The new services that these companies have already created
are a "digital magazine rack" for consumers -- an enticing array of specialty
channels promising a customized viewing experience 24 hours a day.

The key with these powerhouse brands, in addition to their
strong consumer appeal, is their opportunity to cross-promote digital across their
corporate assets. From ESPN SportsZones to Discovery Channel Stores, programmers cover a
lot of territory and have more than one way to communicate with potential digital-cable

Online, retail, on-air, to name just a few, all offer
strategic promotional opportunities for the savvy digital marketer to exploit. These are
opportunities that we can't afford to miss.

In addition, programmers must align themselves with each
other, and with operators, at the local level. Packaging and pricing strategies vary
market-by-market, and so must local promotional tactics. Few consumers will base their
decisions to pay an incremental $9.95 per month for digital on the basis of just one

Programmer collaboration at the local level allows
operators to more strategically position the power of the digital experience in their
sales propositions and, subsequently, to do a better job of driving boxes into basic-cable

This is a new marketing paradigm for programmers that are
used to focusing exclusively on selling themselves to drive ratings. To survive, we must
instead sell the digital concept together.



Through local-market partnerships, we can together educate
viewers on the unprecedented variety of programming available with digital cable. This
will enable us to enhance our reach beyond the somewhat narrow "early-adopter"
demographic to capture a more diversified audience.

Operators can, for example, target families and kids with
Noggin, HBO Family and Discovery Kids. We can reach out to the Spanish-speaking population
with new Hispanic programming targeted toward this growing audience. These are but a few
examples of the rich possibilities that true collaboration delivers.

A collaborative partnership established at this critical
juncture will firmly set the stage for maximizing the explosive business opportunities
that the future of cable will bring. The promise of digital will be further enhanced by
the flexibility of digital technology, combined with the broadband capabilities of cable,
making possible high-speed-data transmission.

In living rooms across America, the interactive experience
is possible, but only by turning off the TV and turning on the computer.

In the not-too-distant future, digital cable will allow us
to offer consumers a truly interactive experience without leaving the television screen.

From instant access to recipes on Romance Classics, to
information about the latest models and colors available at your local Honda dealership,
the interactive digital cable experience will bring an amazing new world of information to
cable viewers' fingertips.


This capacity will blow the market for digital-cable
service wide open. Imagine what this means to those parents who can't afford
expensive computers and the latest software. For a few dollars more than their basic-cable
subscription, parents can help their kids to harness much of the interactive capability of
computers through their digital boxes.

Imagine the world of possibilities when consumers view
television as not only a source for entertainment, but as a critical, necessary and
accessible tool for enhancing the quality of their lives.

As the industry heads to New Orleans next week for the CTAM
Digital & Pay-Per-View Conference, the time is ripe for us to seize control. A steady
stream of innovative digital-cable messages; a commitment from programmers to
strategically leverage their assets; and a series of dynamic operator/programmer
partnerships, played out at the local level, will be keys to making it happen.

Together, can we move beyond digital's powerful launch
and help to maximize its robust future.

Bill Goodwyn, senior vice president, affiliate sales and
marketing at Discovery Networks U.S., and Tracy Wagner, executive vice president,
programming distribution for Tele-Communications Inc.'s TCI Communications Inc. unit,
are the respective chairs of the digital and pay-per-view tracks at next week's CTAM
Digital & Pay-Per-View Conference.