Questions about whether or not consumers actually want to
use their TVs to surf the Internet moved beyond anecdotal evidence last week.
WorldGate Communications Inc., which launched its Internet
TV service in Charter Communications Inc.'s St. Louis system in April, released
initial take rates for the fledgling service, saying that consumer interest surpassed its
expectations.
Within 12 weeks of launch, 8 percent of Charter's
subscribers in the limited area where the service was available signed on for it, even
though the MSO didn't produce any direct-marketing materials, instead making limited
"cold" telephone calls, said Hal Krisbergh, CEO of WorldGate.
WorldGate declined to say how many people were offered the
service. Initial service rollouts in limited areas often show inflated results because of
the ability to do pinpoint marketing and the "early adopter" principle.
"[Charter] got several-thousand calls after the press
release went out [announcing availability of the service]," Krisbergh said.
"It's clearly an important statistic for what is a brand new category for
cable."
As for hopes of 25 percent retention of Charter's 200
trial WorldGate subscribers after a fee structure went into place, both Charter and
WorldGate were "pleasantly stunned" when 60 percent decided to continue as
takers, Krisbergh said. "That was the acid test," he added. "These people
went through all of the hard bumps and initial hiccups with us."
Charter CEO Jerry Kent said in a prepared statement that
two things became clear since launching WorldGate: It's an easy sale, and consumers
want it.
"For the cable industry, this means an entirely new
audience -- consumers that want fast, easy, low-cost Internet access," Kent said.
Charter plans to offer the service to a total of 200,000
homes in the St. Louis market by year-end, for an introductory rate of $4.95 for three
months of service. That bumps up to $15.95 per month after the sample period, which
includes unlimited e-mail access, six e-mail addresses and a wireless keyboard.
About 400 customers were hooked up for the service at press
time, and 1,700 more installs are expected in the coming weeks, Krisbergh said.
Krisbergh added that existing data show that most Charter
subscribers spent about 12 minutes per day online, mostly checking mail and surfing
"the usual batch" of Internet sites.
Beyond Charter, Krisbergh said, WorldGate currently holds
contracts with a total of six MSOs, which he can't announce until the MSO partners
are ready to do so.
