Cable consternation

Selling TV in a country where people huddle indoors for half the year shouldn’t be this hard.

Marketing Magazine, February 9, 1998   

Almost 30 years ago, jazz funk poet Gil Scott-Heron cut a record called “The Revolution Will Not Be Televised.” Like a lot of revolutionary manifestos, it worked better as a critique of the institution it purported to overthrow than as a workable prescription for change.


These days, Rogers Cable’s customers could update that number in a couple of ways: The revolution will be televised...but seeing it will cost you eight bucks a month and you’ll have to take The Nashville Network, at least one channel in a language you won’t ever speak and an independent UHF station from Dubuque that shows nothing but farm reports and high school lacrosse tournaments as part of the package. Or: the revolution will not be televised, because it will consist of snarling channel-surfers rising off their couches in a single lumpen tsunami and flogging cable guys with lengths of coaxial they’ve ripped out of their walls in frustration.


TV ought to be a pretty easy product to sell in a country where people have to huddle indoors for months at a time with little else to do but stare at their televisions and wait for spring. The proliferation of channels and options ought to mean that even those who disdain mainstream network fare can find something they like. PBS stations along the border have proven Canadians don’t mind paying for television they like.


So why are so many Rogers Cable customers railing against the company that brings this cathode-ray cornucopia into their living rooms? How can an outfit supplying millions of people with 60 channels of entertainment for a pretty reasonable monthly charge engender such deep-seated, snarling resentment? And if you were the outfit facing that kind of antipathy from your customers, would you antagonize them further?


On paper, the direct-broadcast-satellite business should be a niche opportunity at best. This is the most cabled nation on earth. You’d think that would shrink the potential DBS customer base to a few hundred thousand. Further, regulations mean that the DBS operators can only replicate what cable carries. Finally, there’s the delay in licensing DBS outfits. In the United States, DBS TV is the fastest-selling new consumer electronics product in history. And that’s probably why about a quarter million Canucks bought themselves American DBS set-ups instead of the “day-late-dollar-short” homegrown approximations. Still, Star Choice says it’s targeting cable consumers, and since September it’s signed up 50,000 subscribers. You’d have to be pretty mad at the cable company to pay somebody else a comparable monthly fee on top of $500 for extra hardware.


This is really Rogers Cable’s problem. (Rogers Cable’s parent company, Rogers Communications Inc., also owns Marketing). Shaw Cable of Calgary has already sold the new tier of cable channels to 50% of its customers. Rogers is running at about 25%. The channels are the same, so the difference would seem to be a matter of marketing and customer perception. And smart marketing is doubly important now; subscribers are still wary after the negative-option mess of three years ago, and there’s a raft of new channels on offer with more in the pipe. You not only have to sell the new services, you have to engender enough surplus goodwill that your customers will be more likely to accept — and pay for — your future offerings.


Rogers Cable has been going through some management changes recently (new CEO in, four executives, including the VP marketing, out). But with telcos and others cleared to enter the cable business, you’d think loyalty would be more important now than ever before. And if peering into the future isn’t as prevalent in Rogers’ corporate culture as it used to be, learn from the past.


Manhattan’s Time Warner Cable woke up a couple of years ago to find an upstart filching its customers. Liberty Cable poached Time Warner’s subscriber base a building at a time, its “guerrilla” marketing consisting of little more than two-line “readers” on page one of the New York Times: “220 East 55th Street has been liberated from the cable monopoly. Better service. Cheaper Rates” and the company phone number.


Unwittingly, Time Warner handed Liberty Cable its market with an attitude mixing imperial contempt for its subscribers and the smug assumption that if people wanted more than a couple of channels, it was Time Warner or nothing — they had no choice. But the second they had one, they exercised it. As the incumbent, you have more to prove than any newcomer, especially if you haven’t done a whole hell of a lot to serve your customers in the past.


Rogers is about to face the Time Warner/Liberty situation on a much bigger scale with the growth of DBS, newer technologies such as LMCS and DMS, plus the telcos all eager to get into the cable business.


“You’re not going to miss all this, are you?” asked Rogers’ ad campaign last year. Turns out “all this” is two bucks more a month for exactly the same stuff. Not the kind of bait-and-switch tactic you want to pull on a public that already dislikes you on principle for a multitude of perceived sins they think you’re more likely to keep committing than atone for.