High-end subscribers like new technology, and they don't care where they get it from.

JIM BARTHOLD

Too often, cable subscribers have been made to feel as if the industry views them as chattel, with new technology dangled as a reward for good behavior. That perception will be hard to reverse, but it can be done.

It isn't entirely cable's fault that subscribers sometimes feel that they're not treated like responsible adults. Human greed, the desire to get something for free and an often-malevolent consumer electronics industry have led subscribers to routinely assume they're being exploited.

Past instances of cable's insensitivity to how consumer electronics trends were impacting its subscribers include the ?cable-ready TV? debacle when CE retailers sold televisions that were supposed to eliminate the need for set-top boxes and cable operators scrambled signals, forcing consumers to use the operators' boxes.

Then, to salt the wounds, those same operators charged usurious prices for remote controls, negating consumer-purchased devices. The situation worsened when subscribers lost the watch-and-record capabilities that they'd been promised with their VCRs, which, it turned out, did not decode scrambled cable signals. When stereo television's hideous BTSC format arrived, CE retailers fell over each other to sell sets with little red lights that indicated Miami Vice was coming through in stereo over 2-inch TV speakers.

Meanwhile, subscribers with baseband boxes that were designed to enhance security couldn't get stereo. From the subscribers' vantage point, cable operators were once again disinterested in the plight of their customers.

Currently, subscribers like personal video recording. They're learning to time shift like they never did with VCRs. While it became a point of pride to boast that the ?12:00? flashed on one's VCR, nobody brags about not being able to program TiVo. Consumer electronics retailers are marketing the devices and subscribers are buying them. But for the cable industry, it's cable-ready TVs all over again.

This time cable has an opponent that is making its case not with technology, but with consumer-friendliness. DBS has embraced PVRs. What better way to cement your position as the anti-cable than to offer something consumers want that cable doesn't want to provide?

Cable has made some understandable arguments about maintaining control of its programming and preventing subscribers from skipping commercials. It also has the interactive network to make on-demand programming a viable alternative. The problem is, on-demand, as attractive as it might be, spoon-feeds subscribers who have outgrown the baby-food approach to programming. Right or wrong, these people are acquainted with personal computers and MP3s and are accustomed to recording what they want, when they want it. And that kind of experience cannot be unlearned.

In the past, cable has made a strong case for its subscriber-unfriendly decisions. Concerns over program security justified set-tops that stripped away subscriber features like picture-in-picture, watch-and-record and stereo. However, on-demand, while a nice addendum to the current programming mix, doesn't offset personal video.

The industry can't say that going the PVR route is unaffordable. Vendors, foreseeing demand and probably hoping for some spillover revenue from DBS providers, are putting PVR functionality into high-end digital boxes. More revealingly, they're giving cable operators fiscally sensible reasons to deploy more expensive boxes. At a recent all-day investors' conference, Scientific-Atlanta demonstrated a forward-thinking policy of using one advanced set-top to serve an entire household with features that consumers want. The family would not even need to gather in front of this particular unit since it would feed other ?slave? units throughout the house, meaning existing, amortized subscriber units could be programmed to work with the master.

A slight additional investment in advanced equipment would be balanced by PVR incremental revenue, and cable would be able to offset a very serious threat from its main competitor.

Yes, there are questions about subscribers skipping commercials and questions about programming rights. But those questions will exist whether cable relents on some of its tight-fisted programming control or not.

It's time for the cable industry to lighten up in regard to these questions. If it doesn't, it will be ?lightened up? by DBS players more than happy to pick its pockets and lift its elite corps of high-end subscribers.