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Digital cable-ready?

Fri, 03/31/2000 - 7:00pm
Walter S. Ciciora There is So Much Doubt About Consumer Acceptance of Broadcast Digital TV that Drastic Marketing Measures are Needed.
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By Walter S. Ciciora There is so much doubt about consumer acceptance of broadcast digital TV that drastic marketing measures are needed.

"Cable-ready" is a term originally adopted unilaterally by the consumer electronics industry, without permission or consultation with the cable industry.

Many years ago, television tuners involved multiple mechanical switches and a rather cumbersome turret apparatus. The switch contacts were subject to corrosion and wear. After the receiver's vacuum tubes, its tuner was the main point of failure requiring service. Early remote-controlled tuners had a motor and gear mechanism to implement the channel changing.

As transistors replaced vacuum tubes, television reliability improved dramatically. But the tuner remained a problem. Only when integrated circuits became available, did it become possible to improve the tuner and remote control system. Greater reliability and convenience came at a stiff price. The electronic tuner added about $100 to the price of a television receiver. It may be hard to believe, but there was a time when $100 was a lot of money. That was also a time when remote control was considered decadent, something for those who were excessively lazy. So naturally, a television receiver that tuned the same number of channels, only more reliably and conveniently, was a tough sell. At that same time, cable had become a sensation. Everybody wanted it.

Then, cable had but a few channels. A bit of clever innovation allowed the "solid state" (how's that for a marketing term from the past!) tuner to tune just some of the cable channels. Subsequently, the marketing folks resurrected an old concept. Even earlier, my grandmother had a console radio with a plug on the back. The plug said "television-ready." The perceived value of the radio was enhanced by the idea that it could provide access to the newest electronic marvel of its time, TV.

The marketing department dusted off this old idea and applied it to the solid-state tuner. The perceived value of an expensive solid-state tuner could be enhanced by the notion of cable-ready. While consumers didn't find reliability and ease of use worth another hundred bucks, they found the idea of access to more cable channels terrific.

The real trouble began when more clever innovation added more channels. Soon there was a "horsepower" race to see who could tune the most cable channels. All of these products were called cable-ready. Consumer confusion ensued.

Consumer confusion eventually grew to anger. In 1992, the Cable Act included an amendment that required the FCC to establish rules for the more convenient operation of consumer electronics and cable systems. Because it was part of a highly political Cable Act, most of the burden was imposed on cable. Because the interoperability problem was fundamentally intractable, little actually came of it all. The most significant result was that "basic cable" was required to be available in unscrambled form. Because this was the nearly universal situation anyway, few subscribers noticed any change.

Fast-forward to the present. We are at the beginnings of a digital television revolution. And there is big trouble. The early digital television receivers are very expensive, but not "digital television ready." That is, they have major reception problems. They don't receive any cable or DBS digital signals, and they don't receive off-air digital signals very well at all. That's trouble! While some believe that it is just a matter of time before innovations will significantly improve digital television reception, there are others who are not so sure. There is so much doubt about consumer acceptance of broadcast digital television that drastic marketing measures are needed. Perhaps the old "cable-ready" trick will work again. Maybe consumer sales of digital televisions can be enhanced by convincing the consumer that signals unavailable through the air (because of reception problems) can be had over cable with a "digital cable-ready" television set. Maybe that marketing approach will make those sets fly off the shelves rather than grow old in inventory. This, of course, requires that signals in the broadcast format be carried on cable, giving rise to the imposition of more restraints.

There are a few differences this time. This time, there are joint committees struggling over the definition of digital cable-ready. This time it will be less of a unilateral definition. However, the cable industry is not participating with the same commitment and drive as the consumer electronics industry. There is the likelihood of a digital cable-ready definition that still causes consumer confusion and anger.

There are some simple things that can be done to minimize the problem. During the earlier proceedings on analog compatibility, I advocated a multi-level definition of cable-ready. I argued for "basic cable-ready," "cable-ready," and "advanced cable-ready." Basic cable-ready would cover television receivers that had tuners of sufficient quality, but did not provide access to premium channels. Cable-ready was to include that capability. And advanced cable-ready would include access to advanced services. Unfortunately, these recommendations were not adopted. The political will was lacking.

The consumer electronics industry is pushing for as minimalist a definition of digital cable-ready as possible. Perhaps the answer is to allow that level of capability under the term basic digital cable-ready. Now that we have more advanced services, the need for a distinction between levels of capability is more important than ever. The consumer electronics side argued that having multiple levels and terms would confuse the consumer. This might impact sales negatively. This is a faulty argument. Keeping things excessively simple only leads to misunderstandings and later confusion and anger. If consumers make well-informed purchasing decisions, they will likely be satisfied.

There is one other tool the cable industry has. It is, unfortunately, one the industry has failed to fully utilize in the past. The cable industry has regular contact with its subscribers through monthly mailings and through advertising spots. The consumer electronics industry has almost no contact with its customers. During the problems with compatibility, the cable industry failed to use these tools to state its case and resolve confusion. It should not repeat that mistake. It is very important to educate the consumer on what digital cable-ready means from a cable industry perspective. Otherwise, we will see renewed problems with cable-ready issues.

The fundamental tool in dealing with these kinds of issues is the "management of expectations." If consumers are allowed to build up unrealistic expectations, they will become angry. Likely, the cable industry will again be blamed.

Let's work to ensure understandable and unambiguous definitions of several levels of digital cable-ready, and then to educate subscribers as to the meaning of these definitions.

Walt@Ciciora.com

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