Cablevision Systems has established a new digital marketing and commerce group, charged with developing interactive sales models that will leverage the operator's fiber platform and high penetration in the New York City market.
The first product up may be a linear channel that enables shoppers to buy via TV remote control, the result of advertiser partnerships with Cablevision enabling the fulfillment.
The new division is headed by Patricia Gottesman, a 28-year veteran of the Bethpage, N.Y.-based cable operator, who has been named executive vice president of digital marketing and commerce. A number of key Cablevision and Rainbow Advertising Sales executives will join Gottesman's group, including Dermot McCormack, senior vice president of interactive advertising and development; Barry Frey, senior VP of advanced platform sales; and Ben Tatta, senior VP of new business development.
The new sales division is being launched now “because we're at critical mass,” Gottesman said.
Cablevision serves 3 million homes and businesses in its 4.6 million home footprint in the New York metropolitan area and reports 78% penetration for its iO: Interactive Optimum digital-cable product, the highest such penetration among big multiple-system operators. Direct-broadcast satellite providers and telephone companies have nowhere near that level of video distribution in Cablevision's market, she said.
COMPETITIVE THREAT
But Verizon Communications' FiOS fiber-based television, telephone and high-speed Internet network, still being rolled out, has gone after Cablevision more than any other cable company. FiOS passes 23% of Cablevision's homes, compared with 2% to 4% FiOS exposure for Comcast, Time Warner Cable or Charter Communications, Citigroup Research analyst Jason Bazinet estimated in a March 13 report. Cablevision's own estimate has FiOS available to 850,000 homes in the cable company's footprint.
Cablevision has recently made several programming and technology moves that seem aimed at least partly at blunting Verizon. For one, it added switched digital video technology that enables the addition of several foreign-language programming services. And this past week, Cablevision added high-definition outlets from National Geographic Channel and Discovery Channel, raising to 23 the number of high-definition channels Cablevision offers iO digital customers for no added charge. Verizon has pointed to foreign-language and HD channels as key attributes of FiOS, as well.
Going forward, Cablevision would like to develop a shop-from-home product, leveraging the fact that its digital set-tops contain Data Over Cable Service Interface Specification modems that enable two-way communication with potential advertisers. The Scientific Atlanta 4250 and 8300 set-tops can render a HyperText Markup Language (HTML) page from which consumers can launch onto the Internet, to the page of a participating advertiser.
The new sales division will design both television and broadband applications, Gottesman said, without either naming products she thought would be appropriate for on-screen shopping or saying when such new services would be added.
Cablevision has already been experimenting with linear and multiplatform advertising models. Two and a half years ago, the company launched Optimum Homes and Optimum Autos, linear channels that showcase real estate and cars for sale from area sellers.
Those channels are also supported by a broadband component on Cablevision's Optimum Online Internet service.
BRANDED SLOTS SOLD
During the last year, the company has sold branded programming slots to a number of advertisers, including The Walt Disney Co., JetBlue Airlines, Sony Electronics, General Motors and Bertolli USA. Those ventures demonstrated to advertisers that Cablevision could deliver the content while creating a rich source of data on how those channels are used, Gottesman said.
Subscribers have already demonstrated a willingness to buy Cablevision services via remote, Gottesman said. More than 600,000 units of subscription video-on-demand, premium TV and Optimum Online high-speed Internet subscriptions (with modem fulfillment by mail) were purchased via the TV screen last year.
Cablevision doesn't heavily promote that buying capability, she said, as the on-screen application is intuitive enough for consumers to find and use on their own.
