I attended a fascinating panel that consisted of real cable customers talking about their needs, what they valued, and what they wanted from their cable provider. And while they may not have represented a true cross section of America, their opinions were genuine and their desires real. What made it most eye oepning, is that the needs that they expressed were different from what a top cable executive spoke of as the direction their company was taking to remain competitive against telcos and satellite. It means that cable may lose their dominant position by picking the wrong strategy to follow.
From the panel, the top line learnings:
1. Hi speed is the number one reason for choosing a provider
2. Speed matters but few can tell how fast is fast; whoever markets the best reliability with that speed can win the race.
3. Only 20-40% of the TVs attached to a cable in the home also have a converter box; consumer don't care for the device and so don't see all the advantages of digital cable on all TVs. Few use VOD and only some use their DVR.
4. Price sensitivity - as consumers see cable as a commodity, a lower price matters.
5. Consumers are thinking about HD sets but many still don't have one yet. Like the converter box, they may get one HD set, but the rest will remain standard def.
6. Exceptional service matters - door to door sales reaches people directly, retention calls combined with discounting when signing a long term agreement can be effective. And customers listen to their neighbors; a bad experience spreads quickly and customers know if their provider was a JD Powers winner.
Interestingly, Direct TV is pushing the most HD and cable is attacking that message most. They hope that HD content will matter. It leaves open the opportunity for telco to push the hi speed advantages; especially as Comcast fights a peer to peer issue which hurts their market perception. Content is nice, but most people find that their favorite channels are available everywhere. Hi Speed matters most and whoever sells the best value for their package and delivers it with exceptional service will ultimately win.