HDTV is redefining how cable systems attract customers
Copyright 2003 Gannett Company, Inc.
April 3, 2003, Thursday, FIRST EDITION
Seven out of 10 TV-watching households get their programming from cable. Rick McKinstry's home in New Albany, Ind., is not one of them.
McKinstry, 44, lives in one of the 3.5 million households with a TV that can handle new high-definition signals coming from broadcasters. When he got the set a year ago, he had a rooftop antenna and a DirecTV satellite dish installed to get as much HD as possible.
But over the past few months, cable systems, fearing satellite competition for their most affluent customers and under pressure from the Federal Communications Commission, have gotten aggressive about HD. Today, 103 markets have cable systems offering some HD content, an increase of 20 percent just since the start of the year.
If Insight Cable, his local provider, comes up with a package of HD offerings, McKinstry says, "I will be very tempted to switch."
Cable companies are counting on HD to lure customers like McKinstry. "We were playing catch-up (to satellite) for a long time," National Cable & Telecommunications Association president Robert Sachs said at a recent digital TV summit. Now, "we think it will be a competitive advantage to be offering those broadcasts."
How cable is catching up:
More HD channels. Latest is ESPN-HD, currently available only on cable, though satellite services Dish Network and DirecTV are in discussions about carrying it. It started Sunday with a baseball season opener and will provide two to three high-definition game broadcasts each week.
The rest of the network's programming for now will be enhanced quality from standard broadcasts. But next year, ESPN will begin producing all of its studio content such as SportsCenter in high-definition. "Cable operators are asking for high-definition products," says ABC/ESPN president George Bodenheimer.
Cinemax and Bravo are planning HD channels by year's end, too.
Easier connections. Eight major cable firms and 14 TV makers agreed to make their systems and equipment compatible so consumers can have plug-and-play high-definition and other digital TV services.
More marketing. As cable systems have expanded digital services, they're starting to use HD as a selling point in ads and other promos. "It was very important for us to be able to say to our customers that they could get (ESPN HD) from us, ahead of any other delivery method," says Stephanie Stallworth of Cox Cable in Las Vegas.
Overall, cable systems serving about 45 million of the nation's 110 million TV households are offering some sort of HD service, from local broadcasts to HBO, Showtime and others. Most HDTV tiers are an additional $10 monthly.
A note: Digital cable is not the same as HDTV, or even digital TV, a point of confusion among customers. Cable systems' digital services are simply digitized versions of standard channels and may or may not include HDTV's cinema-quality, widescreen digital format.
Because a majority of viewers get their programming via cable, legislators and regulators consider the industry's support crucial to the nation's digital transition. But until recently, cable has been reluctant to dedicate space for high-definition channels on its systems.
Cable should charge for HD and split the proceeds with local stations to encourage local HD broadcasts, Forrester analyst Josh Bernoff says. Surveys suggest viewers interested in HD would pay $10 extra a month for local and national signals, he says.
And sports can help seal the deal, ESPN analyst Joe Theismann says. He expects ESPN's HD cameras to take football viewers closer to the action, for example, by zooming in on offensive linemen.
Why? Because you can anticipate the upcoming play based on linemen's stances, the former Washington Redskins quarterback says. When the play is a run, they have their weight slightly forward. How can you tell? "The veins on their hands pop out," Theismann says. "That's what we'll be able to bring the fans with HDTV."