San Diego -- Pollster Peter Hart underscored the upbeat
tone of the cable industry's annual public-affairs conference here last week when he told
a lunchtime audience, "Everything that we see in our numbers tells us that the
industry is doing well."
Hart, president of Hart Research, said his company's latest
survey showed that the public viewed the performance of local companies more positively
than ever -- 54 percent rated their local operator positively, versus 22 percent
negatively -- while cable service was also seen as improving (see chart).
Public-affairs executives also heard the best way to sell a
rate increase, in light of research showing that subscribers perceived some cable pitches
on increased programming costs as "whiny."
Hart credited the industry's service initiatives --
particularly the On-Time Guarantee -- as having "done a lot" to improve cable's
image, but he also cautioned executives gathered for the Cable Television Public Affairs
Association's Forum '98 that the public remains "very rate-sensitive," and that
it still sees cable companies as a monopoly holding their TV viewers hostage.
As a result, he said, cable can't be sold as a
"low-priced bargain," but it must instead be perceived as a "superior
product" with plenty of benefits and value. In addition to providing quality customer
service, Hart said, his latest survey found that cable's best selling points among viewers
were (in order of popularity): family-oriented programming; Cable in the Classroom;
connecting schools to the Internet; involvement in local charities and community
activities; and local programming.
Hart's findings, for the most part, mirrored the mood of
the conference. While the public-affairs executives remained wary about the effects of
continuing rate hikes, price increases do not seem to have emerged as a grassroots issue
that has stirred up local cable subscribers.
Beverly Greenberg, vice president of community and
government relations for Time Warner Cable's Milwaukee division, echoed many of her
colleagues at the conference when she said she had gotten "almost no feedback"
on her system's rate hikes last year.
Instead of having to spend time putting out fires caused by
negative reaction to rate hikes, many public-affairs people said they were concentrating
more on figuring out how to best showcase the introduction of new products, such as cable
modems and digital tiers.
"People are more concerned with technology coming into
their homes," Greenberg said, "and they're asking, 'What will it do for us?' and
'When will we get it?'"
Nonetheless, rate hikes did loom as a sword of Damocles
hanging over the conference. A recent USA Today story that was critical of the
cable industry's approach to rate increases was, for example, very much on the minds of
the public-relations professionals.
While no one said that the article sparked any angry calls
from subscribers, some executives said they noticed stories and inquiries from local
papers as a result of the USA Today piece. Ross Heupel, manager of corporate
communications for Marcus Cable, said he was concerned that subscribers would send the
article to elected officials.
Torie Clarke, vice president of public affairs and
strategic counsel for the National Cable Television Association, said price increases were
"still the third rail" for the cable industry.
Accordingly, considerable time was spent on the best way to
"communicate" the price "message." David Pierce, director of public
affairs for the NCTA, told one panel session that NCTA research showed that consumers
didn't care about how much programming cost cable operators. Pitching price hikes as a
good dollars-and-cents value, or with an explanation of rising costs and a "We're all
in this together" attitude, did not work well. Consumers perceived that message as
"very whiny," he said.
In contrast, Pierce said, focus groups found rate hikes
more palatable when tied to original and local programming, to community activities and to
new technology.
Tele-Communications Inc. focus groups also found that
customers didn't care how much operators paid for programming, said Matt Fleury, executive
director of communications for the MSO's central division. Nor, he added, did they want to
receive a "warm and fuzzy" brochure soft-selling a price increase.
Instead, he reported that TCI had success communicating a
recent rate hike with a straightforward, "businesslike" letter from the general
manager that had been crafted using input from customers in focus groups.
In fact, the CTPAA's new president, John Wolfe, vice
president of public and government affairs, New England operations for Cox Communications
Inc., said he wanted to bring a "field perspective and focus" to the
organization and initiate more regional forums through the year.
Sara Breaux, who had been acting executive director of the
organization, was named full-time executive director.
Leo J. Hindery Jr., president and chief operating officer
of TCI, and Tom Freston, chairman and CEO of MTV Networks, were given the CTPAA's
President's Awards.
