Cable executives are concerned poor service will hamper growth
Anaheim, Calif. — The days when subscribers signed up for cable TV service mainly for better reception seem to be over. Cable executives say people now sign up for the unique programming that's offered -- often with some extraordinary sales pitches.
However, it is becoming apparent to all that unless the cable industry learns how to serve its customers better, the great expansion in wired households (over 40 percent of all American homes are currently hooked up) may soon come to a screeching halt.
That's the kind of talk I heard at the recent 1983 Western Cable TV Show and Convention here. Relative peace and quiet reigned as more than 10,000 members of the cable industry community -- system operators, pay-TV programmers, manufacturers, and suppliers -- milled around the nearly 300 exhibitor displays, trying to glean enough information to keep up with new developments in one of today's fastest-growing industries. It is an industry that expects to ring up between $6 billion and $7 billion in operating revenues this year.
This is the 15th annual meeting of the nation's second largest cable convention, sponsored by the California and Arizona Cable TV Associations.
In past years the emphasis has been on new services, and these were introduced to cable-systems operators with an almost hysterical air of excitement and drumbeating. This year, however, the topic was "Cable: The Quality Connection," and most of the talk was about improvement of cable service.
Another major subject was the breakup of American Telephone & Telegraph and the emerging battle with independent phone companies, which are formulating plans to enter the cable-television business, especially the interactive consumer market (or two-way services).
As for legislation, Spencer Kaitz, president of the California Cable TV Association, says he believes highest priority must be given to passage of S 66 and HR 4103, federal cable bills that seem to offer cable operators the greatest protection in areas of deregulation, franchise renewal, and curbing of franchising excesses. Many US lawmakers were here as guests of the show to take part in some of the many panel discussions scheduled throughout the three-day convention.
A walk around the floor of the convention center discovered a great number of equipment exhibits stressing addressability, or the ability of a basic cable system to deal directly with the cable consumer through the system's own central office.In an addressable system, the operator knows who is using his signals and what is being watched. This makes billing much easier.
Addressability is especially important now because of the problem of theft of services. According to the National Cable Television Association (NCTA), about about 5 percent of all cable service being either illegally or unethically acquired.
Almost every cable system in the country is attempting to devise plans to stop this theft. According to Thomas Wheeler, NCTA president, the problem stems from people's attitude toward television. He reasons that many are accustomed to receiving free television and find it hard to adjust to paying for cable. So they don't feel any stigma in helping themselves to it. Most of the nonaddressable methods of catching theft of service involve huge outlays of money by the system.
Sooner or later, say most cable executives, this issue will be resolved with addressable billing systems that will be able to catch the perpetrators in the act. The nation's toughest theft-of-service law was passed by California last year. Cox Cable Communications in San Diego devised a successful campaign that offered amnesty to perpetrators if they sign up to pay for the service. The tactic got them 12,000 new subscribers.
According to one systems operator with whom I spoke, a major problem is cable servicemen, some of whom have been known to bootleg converters and offer to connect pay services illegally for a small personal fee.
"The cable consumer is probably the worst served consumer in the whole American economy," insisted an industry analyst from San Diego, who asked to remain unidentified. "The cable operators and services are just beginning to realize that they must do something to change that situation or lose the growth impetus."
Along with these other issues, the convention continued to feature the many press conferences announcing innovative services and mergers.For instance, ABC/Hearst announced that it is merging with RCTV, the owners of the now defunct The Entertainment Channel to form a new basic (free to consumers) service, the Arts & Entertainment Network. A service called World Video Library announced it is offering 10 new shows a week, which subscribers can select to be transmitted to their homes whenever they choose.
And then there is the new ACTS satellite network (American Christian Television Systems) owned by the Southern Baptist Convention and featuring mainly family entertainment, and EWTN's (Eternal Word Television Network) Mother Mary Angelica's Catholic Cable System. Just For Listening is a new satellite delivered stereo audio pay service and The Games Network is another new service which will provide your family with a computer plus the games to play on it for a fee.
Many of the current problems of the cable TV industry stem from the "breakneck speed" at which so much of the country has been wired, according to Spencer Kaitz. In 1970 fewer than 8 percent of American homes were wired for cable: Today more than 40 percent are wired. The long-overdue recognition of a need to consolidate those rapid gains is what the Anaheim Western Cable Show was all about.