HALIFAX – Customers want to know they have choice in their TV channel lineups and programming selection, even if they don’t really intend to exercise that choice, EastLink co-CEO Dan McKeen told almost 50 people Monday morning at the first-ever CTAM Canada East Coast breakfast (which was sold out).
Held between EastLink’s very popular CSR programming training day on Sunday and the Nova Scotia cable company’s much-anticipated Fall Classic golf tournament Monday afternoon, the morning CTAM session saw a pair of programmers (Corus Entertainment VP Lisa Lyons and Turner Networks’ Doug Lindauer) face a pair of operators (McKeen and Persona CEO Dean MacDonald).
The discussion swirled around what the quartet thought the customer might want and also veered into the oft-troublesome area of negotiation and digital transition between cableco and specialty services (but we’ll leave that discussion for another day and concentrate on the consumer discourse from the panel).
"Customers want choice. That’s automatic," said McKeen. But while they want "the widest array of options, most customers are going to take packages because that’s the most efficient way."
Programmers – especially American ones like Turner – often express their fear of an a-la-carte world where cable customers can pick single channels instead of one big package. It disrupts the economics of the business model.
For Lindauer, however, the matter has more to do with U.S. politics than his feelings towards a more flexible programming package for cable, he said. In the States, there is substantial political pressure on the industry to unravel the large cable channel packages sold there and if the American feds ever caught wind of a U.S. programmer allowing pick and pay in Canada, the fight would be all but over, said Lindauer.
It’s the reason why Canadian cablecos wishing to carry Turner Classic Movies must add the channel to its analog tiers, as Shaw Cable chose to do last year.
Programmers needn’t fear a-la-carte, added McKeen, because cablecos have no desire to decrease the amount of revenue taken in. So, for the digi-nets EastLink sells one at a time, it’s always far more economical for their customers to take a large package of channels for $19.95 a month rather than buying a few singles for $2.95 per.
And we need more ways to access more video on the TV platform, added the co-CEO.
A soccer fan, McKeen said he recently had to turn to YouTube – the online mega-portal for video clips – to see highlights of a European soccer game he was interested in. This is a bit of a problem for programmers and for cable operators. "We need to figure out how to make (more video) available in such a way to that people don’t turn to the Internet," he said.
MacDonald cautioned against attempting to think for the consumer and instead present them with options so that they can do their own thinking. "Any time we think we’re smarter than the customer, it’s at our own peril," he said. And if programmers or MSOs try to tell them what they can and can’t have, "they’re likely to tell us to go shove it."
MacDonald later alluded to the music industry and how the consumers used Napster, KaZaa and others to tell off the record industry – and that the video industry can’t make the same mistakes. "Who would have thought five years ago that downloaded music would have replaced CDs?"
Increasingly, cable operators are asking for additional on demand programming, again, so that customers can call up movies or TV shows if they wish. And while Corus is experimenting with several initiatives (such as Treehouse On Demand), Lyons added, "no one want to lose their profits," by pushing everything into "all bets are off" on demand everything.
But only a small portion of customers will buy all, or even a majority, of their programming on demand or a-la-carte. Knowing they have the option, "adds value," said McKeen, "but the vast majority of them want to know that the choice is available… (and) the number of customers who actually exercise that choice is small."
Left to right are: Moderator Harris Boyd, Turner’s Doug Lindauer, EastLink’s Dan McKeen, Corus’s Lisa Lyons, and Persona’s Dean MacDonald. Greg O’Brien photo.
