The University of Pittsburgh and Pennsylvania State
University are natural rivals, so perhaps it's no wonder that when it comes to
providing in-room television to their students, the two colleges go in different
directions.
Tele-Communications Inc.'s TCI of Pennsylvania
provides cable to University of Pittsburgh dorm rooms through a bulk arrangement that has
satisfied both parties for a number of years. Penn State, on the other hand, ousted TCI of
Pennsylvania in favor of an outside vendor. That company, Campus Televideo, provides the
university's 12,000 main-campus dorm rooms with a customized television system that
includes wiring, maintenance and a channel lineup heavy on such educational fare as
original-language programming.
The divergence of the two Pennsylvania universities
illustrates both the potential gains and risks for cable operators on campus. Contracts
with educational institutions can be renewable resources that provide mutual satisfaction.
But with the growing assertiveness of institutions with their own agendas, the college
market can also provide entrée for entrepreneurs outside of the cable business -- niche
specialists that offer the flexibility that can help them to supplant incumbent cable
operators.
For many operators, traditional approaches continue to work
best in their pursuit of, marketing to and administration of dorm-room contracts.
InterMedia Partners in Tennessee provides cable service to such institutions as Middle
Tennessee State University, the University of Tennessee-Martin and Tennessee State
University.
In all, the system serves 22,000 dorm rooms, representing a
hefty chunk of its 335,000-customer base. While some of the schools allow students to
purchase Home Box Office as an option, all are served principally through bulk packages,
including InterMedia's 60-channel expanded-basic service.
"That's the only way that we'll service a
university," said Paul Janson, InterMedia's regional director of operations for
middle and west Tennessee. "We would never do it individually."
SLIM MARGINS
As for the threat of competition, Janson encourages his
Tennessee schools to explore all possible options.
"In all cases, we charge a lot less than the price
that they can get from any dealer out there," Janson said. "On a pure
programming side, we're not worried about that. Some have said to us, 'We only
want these 18 channels.' We'll absolutely tailor the channel lineup for them.
These are good things for us to have, so we take a really slim margin on them. We
certainly don't make a lot of money with it."
Paragon Cable in Minnesota enjoys equally solid relations
with the largest institution in its service area, the University of Minnesota. The
university recently asked Paragon to wire 10 units in Williams Arena and to provide cable
services for its new student dormitory, said Kim Roden, Paragon's vice president for
public affairs.
"They looked at satellite and us, and they chose
us," Roden said. "In marketing to colleges, you have to realize that there are
alternatives now. If we have a college, we want to not only retain it, but we also want to
be the technology of choice. They know that as we upgrade our systems, there's the
opportunity for advanced uses."
In Michigan, where MediaOne serves such large institutions
as the University of Michigan and Eastern Michigan University, "both Eastern and
Michigan seem to be very happy" with their bulk service, according to Bill Black,
director of public affairs for the company's Midwest region.
That service includes the option for pay-per-view where
students are willing to provide their home addresses and social-security numbers. The bulk
service generates revenue for the universities, since they charge their students more than
MediaOne charges them.
"It does generate revenue for both of them, and
it's something that they don't have to mess with," Black said. "In a
situation where the MSO isn't providing much revenue, I could see where the schools
would want to do something on their own. But where the operator works the way that we do
and essentially shares a large part of the revenue with the universities, it works
great."
OVERCOMING THEFT
Some cable operators have even surmounted the age-old
campus problems of equipment recovery and theft of service. At Eastern Michigan, MediaOne
delivers an unscrambled signal to cable-ready televisions; at Michigan, the company uses
an interdiction system. Thus, there's no equipment no return and no reason to steal
service that's universally available.
Time Warner Cable takes a similar approach in serving Ohio
State University in Columbus, Ohio. Through a bulk arrangement, all dorm rooms receive
Time Warner's 60-channel unscrambled service. Even though the company offers Ohio
State and other institutions the option for premium services beyond the bulk package, few
take advantage of it. Instead, Ohio State provides its own movie-insertion service.
"Most colleges aren't pulling in 60
channels," said Mark Psigoda, vice president of sales and marketing for Time
Warner's Columbus division. "There's virtually nothing else that they could
want. If you make the monthly price fair enough, the cable company can make a small
profit, and the university is happy with it."
MANY COLLEGES
ARE UNHAPPY
For all of the surface tranquillity, there's a rumble
of discontent through America's colleges and universities; some want more than what
their local operators are providing or can provide.
Such was the case at Indiana University of Pennsylvania,
located about 30 miles northeast of Pittsburgh. In 1994, the university was working with
the local cable operator, Adelphia Communications Corp., on the wiring of its 2,500 rooms
for cable, when it decided to end that relationship.
As an alternative, it hired an outside vendor to provide a
complete television package, including a wiring system to transport the
satellite-delivered signals throughout the campus, regular maintenance and the licensing
of programming channels -- including retransmission consent from local broadcasters.
In the customized, 38-channel lineup that it created, IUP
included such features as a German-language channel and a homegrown movie channel, for
which it rents films locally. IUP charges students for television service, but it does not
itemize the fee on its housing bills.
"We want our system to be a combination of
entertainment and education," said Rich Baginski, IUP's associate director for
operations in the Office of Housing. "Because we own our system, we can control what
goes on there. We would not be able to do that to any great degree with a private
firm."
IUP still hosts Adelphia during sign-up fairs for
off-campus residents, and the university has asked Adelphia to connect two of its campuses
with a fiber link. But Frank Polito, Adelphia's regional manager for sales and
marketing, doesn't expect to be invited back to campus any time soon.
"I think that they're pretty much set in their
ways," Polito said.
LOSING PENN STATE
An even bigger loss to the cable industry came when Penn
State took its rich cache of dorm rooms to an outside entrepreneur, much the same way as
IUP did. For its lineup, Penn State ordered microwave-delivered off-air channels from
Pittsburgh and Philadelphia, as well as channels from Canadian Broadcasting Corp. and the
Middle East and services in Spanish and Chinese.
"In a commercial market in central Pennsylvania,
[those kinds of channels] probably are not something that a cable operator would feel that
it could handle," said Fred Fotis, Penn State's director of housing and the
godfather of what the university's students affectionately call "Fred TV."
Fotis said the college felt that a customized system would
serve its needs more and enable it to better exploit technology.
"We wanted to ... be a combination of education and
entertainment and emphasize Penn State's global perspective. We didn't feel that
we could do that through the local vendor," he said.
THE COMPETITION
MAKES DEALS
To provide its dorm-room television services, both IUP and
Penn State selected Campus Televideo, a 10-year-old, Greenwich, Conn.-based company that
offers institutions what company president Ned Lamont describes as "outsourcing"
services.
"It's different from school to school,"
Lamont said, "but many are asking us to provide a complete turnkey telecommunications
structure -- wiring, splicing, video and data. We try to do it all, including financing
and maintaining the system. The school has no upfront costs. We do a lot with retrieval
and multimedia on campus. When it comes to entertainment television, we make deals."
Lamont noted that Campus Televideo can cooperate, as well
as compete, with local cable operators.
Such could be the case at a prestigious Eastern university,
where Campus Televideo and the local cable operator have presented a joint proposal:
Campus Televideo will handle the wiring of ancient dorm rooms, while the cable operator
provides a bulk-programming package. Nevertheless, with 100,000 students and 85 campuses
in its portfolio, Campus Televideo is unlikely to be viewed by the cable industry as a
friendly collaborator.
In the face of growing competition, cable operators are
protecting their campus turf with a number of new or retooled initiatives. In the
marketing arena, many operators are going beyond humdrum student-newspaper advertisements
and getting creative.
At Eastern Michigan and Michigan, MediaOne will roll out a
resident-assistant program this fall that will reward RAs who help the company in its
marketing and promotions. At Ohio State, Time Warner participates in co-op programs with
local merchants, primarily to attract off-campus sign-ups, among many other promotions.
"It is the fun stuff," Psigoda said. "We
have segmented mail to returning students and billboards, and all of our marketing themes
take on a college-return-type presence. We have point-of-purchase displays, and we have
sales reps working near campus so that we can do same-day or next-day installations. Every
year, we try to embellish it a little bit more."
For TCI's north-central region, which serves 18
colleges and universities -- including the 42,000-student Michigan State University --
intensive marketing to students is an everyday affair, said Scott Sobel, regional director
of communications.
"We use sign-up fairs, advertising on university
channels, direct mail, door-to-door -- whatever variations we can think of. These are
valued clients. We afford them the same respect and the same attention as we do everybody
else. In marketing to universities, you have an educated, savvy, younger population
that's very attracted to the cable industry and that's all in one place,"
Sobel said.
NEW SERVICES
TO STUDENTS
New services are also playing a part in operators'
determination to keep their campus customers. MediaOne is exploring the possibility of
offering its MediaOne Express high-speed-data service to Michigan and Eastern Michigan
personnel who live off campus, while InterMedia is talking with Vanderbilt University
about bulk @Home Network cable-modem service -- even though Vanderbilt rejects video
services for its dorms.
Like it or not, cable operators are showing new flexibility
in meeting university needs, as operators that insist on nothing but standard bulk
packages could find themselves on the outside looking in.
In western Pennsylvania, TCI of Pennsylvania serves 13
institutions in and around Pittsburgh, but fewer than one-half through bulk arrangements.
And the operator realizes that it needs to remain flexible in the face of competition.
Geneva College in Beaver Falls, Pa., asked TCI of
Pennsylvania to trap out MTV: Music Television and to provide premium services to graduate
students only, and the University of Pittsburgh asked the operator to add Black
Entertainment Television to its package. TCI complied in both cases.
In a program that was just implemented, TCI of Pennsylvania
is teaming up with HBO to transform the challenge of converter retrieval into a pleasant
experience for all. Now, students who turn in their converters promptly will receive
"HBO on Campus" T-shirts.
"We have to be flexible," said Devon George, the
company's customer-service manager for sales and products. "We need to be
flexible to compete."
NOTHING FOR GRANTED
Finally, operators are finding that one of the best ways to
reinforce their campus relationships is through partnerships.
Robert Morris College, a business-focused institution with
a campus near Coraopolis, Pa., west of Pittsburgh, has had cable in its dorms for about 30
years, but Donna Gruseck, general manager of Time Warner in Coraopolis, isn't taking
anything for granted. The company provides a Robert Morris-programmed channel seen
throughout the 16,500-subscriber Coraopolis system; it purchases RMC basketball tickets
that it distributes to customers; and it has helped the college to complete the wiring for
a separate coaxial loop that will feed information kiosks throughout the campus.
"We also take student surveys to see which channels
they'd like to have," Gruseck said. "We added CNBC and Fox Sports
[Pittsburgh] based on their input."
Time spent on such partnerships can be significant, but,
according to Sobel, it's the most important element in success on today's
campuses.
Sobel said, "We're involved in many charitable
events with Michigan State. Their communications classes use our facilities. We provide
them with two channels for their use, tours for their classes and Cable in the Classroom.
With clustering, it's imperative that you have good relationships with your colleges
and universities. It's what we're offering over and above the product. These are
symbiotic relationships that have to be nurtured."
