Meet the Operator: Can Sports Really Drive HD Subscribers?

Just a fraction of Comcast’s 21 million customers have requested the set-tops that enable them to receive HD programming—a stat the MSO expects to change dramatically this year. From network upgrades—more than 90% of Comcast’s plant will be wired for HD at the end of 2004 (up from 84% currently)—to intense marketing efforts keyed to the Super Bowl and the NCAA basketball tournament, to CSR efforts to upsell customers, every area of the company is galvanized to promote HD services that differentiate Comcast from its competition. Andy Addis, VP marketing and new products, says Comcast is planning to double its HD marketing efforts this year by, in part, tying promotions to marquee events, primarily sports. In the weeks leading up to this year’s Super Bowl, for example, Comcast participated in a promotion with Samsung, its first-ever HD campaign done in conjunction with a consumer electronics company. "We saw a dramatic spike in HD installs at that time," says Addis, declining to break out numbers. Merrill Lynch analyst Jessica Reif Cohen expects Comcast to boost its HD channel lineup from 12 to 27 in New England, its largest cluster, a figure Comcast wouldn’t confirm. Overall the company had about 225,000 HD-enabled boxes installed at the end of the year, and was installing new HD boxes at a rate of about 8,000 to 10,000 a week. The number of installs is up "significantly" since Comcast EVP marketing and sales Dave Watson gave those figure to investors in mid-December, Addis says. Last month Comcast joined with seven other MSOs and CTAM in a marketing alliance with Samsung to promote consumer awareness of HDTV sets. The promotion, timed with the NCAA basketball tournament, offered $100 gift certificates that buyers of new HDTV sets could use toward their cable bills. Addis is looking at the rest of this year’s sporting events as further opportunities to promote the product, from the NBA finals to the Olympics to the NFL. Comcast’s two recent deals with the NBA may further its mission to hook HD subscribers. Comcast will carry up to 50 games in HD from NBA TV. Through a separate deal, NBA Entertainment will provide Comcast with VOD content such as game highlight packages. HDTV, along with VOD, DVRs and high-speed Internet service, are helping drive digital cable. Comcast now counts 7.7 million digital customers; the company estimates it will add another 700,000 digital subscribers this year. Comcast charges $5 for the HD set-top box in addition to the digital service fee, but charges nothing extra for HD programming, a strategy Addis says is based on extensive research, but one that differs from some other operators. "When an incremental price for programming is thrown up in front of consumers, it’s a pretty big letdown," he says. "We feel that people who are getting HD are generally our highest-value customers, and anything and everything that we can do to enhance the value that we offer them, we want to do." To that end, the company is testing HD VOD – a combination Addis says "is as good as it gets" from a competitive standpoint. Right now the technical trials are focusing on ensuring the product causes no network issues; Comcast hopes for a commercial launch this year. Just as Comcast doesn’t want to charge customers for HD, it also doesn’t want to pay for local broadcast HD programming. That’s been just one of the sticking points in negotiations with broadcasting groups for carriage of local station HD content. Although the company has HD available in just about every market, there are more than two dozen markets—excluding the eight largest markets—where Comcast has yet to close deals for the HD signals from one or more local affiliates.