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Newtown's attractive demos make it an ideal testing ground for advanced products, and the best is yet to come: HD DVR and, especially, telephony.
By Mavis Scanlon
The first thing a visitor to Charter's Connecticut system headquarters sees upon walking into the modest customer service lobby is a big Mitsubishi HD television set. One recent morning it was tuned to an engrossing Discovery HD Theater program that presented sharks, in crystal clear detail, tearing into their prey. I asked the receptionist how many people have ordered HD on the spot.
"It's a great selling point," she said, referring to the HD set, not the sharks. "People come in and say, `Wow, I want that.'"
The building that serves as the nerve center of Charter's Connecticut system, or key market area (KMA), is a few miles east of Danbury in Newtown, just off Interstate 84, across from a wooded lot that conceals the nearby railroad tracks and adjacent to the headquarters for Charter's Northeast division, which includes seven KMAs. The KMA's head-end, a call center with about 80 customer service reps (one of three that serve the Northeast division) and its New England Cable Television Association (NECTA) and Beacon Award-winning community access channel, Channel 21, are housed in the two buildings.
Newtown is Charter's largest system in the Connecticut market area, and the town's attractive demographics mean it is often among the first to test the division's new products and services. In addition, a number of division executives live in the area, which John Dee, the system's general manager, says is a boon.
"You find out about [any problems] before customers start to call," he says. "It's an advantage for us in that regard."
Charter Connecticut consists of more than 5,600 plant miles in five states, including St. Johnsville, Berry and Danville in Vermont, Plattsburgh and Chatham in New York and small towns in Massachusetts and New Hampshire. But the bulk of the KMA's 130,000 subscribers are in two pockets in Connecticut, one in the northeast part of the state and one in the northwest.
A cable veteran, Dee came to Charter through its purchase of Avalon Cable in 1999. The majority of the system was rebuilt when he took over as GM; about 80% of the plant has been rebuilt to 870 MHz.
The higher bandwidth will allow Charter to continue increasing download speeds for its high-speed data service, which is being marketed heavily to commercial customers as well as its base of residential customers.
Though small, the system's digital penetration is impressive--58% throughout the five-state market area and as high as 64% in Connecticut, Dee says. Customers can choose from nine "Big," "Bigger" and "Biggest" value packages that include basic and expanded service, one of three digital tiers and a range of premium and Internet packages. Prices range from $54.99 to $110.99. Broadband penetration in Connecticut is as high as 39%, and is between 28% and 30% in Plattsburgh and Vermont.
Charter Connecticut has been offering VOD for about two years. Earlier this year, it rolled out digital video recorders and high-definition TV on the Scientific-Atlanta platform. Dee says he is eagerly awaiting the arrival of S-A's HD DVR and the Digeo Moxi Media Center.
"I think the products we have really are the story," he says. "DVR and HD and HD DVRs--those really are the drivers right now."
The Bundle Raises Its Voice
Coming soon--within six months, Dee says--is cable phone service. Charter has been testing an IP-based service in St. Louis and is planning a controlled rollout in four markets this year. The MSO picked the Connecticut system to be one of those markets. Dee and Rich Fallon, the system's director of technical operations, have been working closely with the neighboring system in Worcester, Mass., on plans for the phone service.
"You're only chosen if the metrics are where they need to be," Fallon says. "If you're not where you need to be, then they won't even consider you for telephony," he adds, referring to the certification process every Charter system must go through before it can begin to offer phone service.
"You've only got one shot with your customers," he says, "and when you roll out a product you want to make sure it works, especially telephony, when you're up against somebody like SBC." To that end, Fallon has developed a checklist for techs and has focused on better ways to monitor the plant, improve backup battery power and minimize line noise.
Fallon helped Charter develop a tech quality assurance program that is used throughout its divisions. The program, which includes self-review checklists for service calls that are subsequently reviewed by supervisors, helped the system drop its service call rate to less than 2.5% of total customers from 3.5% a year ago.
Willimantic will be the first system in Connecticut to launch telephony; following that Dee will roll it out hub by hub throughout Connecticut's seven hubs. The town-by-town launch will help Charter control the launch and the way it is marketed. For now, Dee plans to offer phone in a discounted bundle.
Kathleen MacLeod, director of marketing for the system, hesitates to go into details about how the system will market the service--planning is just getting under way--but it's likely that she will take a multi-pronged approach, similar to campaigns for other new products.
One recent example is a marketing campaign she kicked out for DVRs: She sent out 75,000 postcards that she expected to hit customer's homes in mid-July; they will be followed up with phone calls.
"I like to combine different tactics," she explains. "Just sending out a postcard and waiting for something to happen" doesn't do all that much, she says.
MacLeod has also gotten techs more involved in the marketing process, especially for DVRs, which is being marketed more aggressively than it had been when introduced earlier this year. For instance, every tech wears a gold and purple pin that says "Ask me about Charter DVR."
"I got some flak about the pin and [the techs getting] electrocuted," she says, "but I'm not buying it." She tells them to take off the pin when they climb poles.
"I'm a firm believer that's it's our employees who sell the products, so we try to offer them as many opportunities as possible" to do so, she notes.
Dee and MacLeod recently showcased new products at a customer appreciation day held at the Newtown headquarters. A local radio station promoted the event and helped provide entertainment; they expected the Charter NASCAR race car to be a big draw.
MacLeod enhances Charter's local presence by participating in community events such as the New Milford Village fair, which was held the last weekend in July.
Ever-Elusive Local HD
One of Dee's challenges with his far-flung system is that not every product is available in every area. For example, high-speed data is not available in rural Chatham, which is located south of Albany; offering it there would be cost-prohibitive, Dee says. Instead, Charter is evaluating the feasibility of a wireless offering there.
A bigger challenge is broadening the current high-definition rollout to include local broadcast stations. Right now HD and VOD are available only in Connecticut, although Dee hopes to offer HD in Vermont soon. Located between the two big demographic market areas of New York and Hartford, Conn., Dee has to deal with "everybody" on the local broadcast side, including the broadcast stations in Burlington, Vt. The system's HD service includes HBO, Discovery HD Theater, Showtime and NESN, although NESN can't be shown throughout the whole market due to its proximity to New York. On the broadcast side, Charter offers WVIT, the Hartford NBC affiliate, and is "pretty close" to launching two more local broadcasters, according to Dee.
"The thing that makes HD go is local broadcasters," he says. "Our competition doesn't have local HD, so we need to take advantage of that," he says.
According to data from Media Business Corp., satellite penetration in Charter's Connecticut market area ranges from just around 5% in certain parts of Willimantic to as high as 65% in the South Britain area of Newtown, although that percentage is based on just 63 homes in the ZIP code. In fact, satellite penetration in most parts of Newtown served by Charter is well below 10%. The average satellite penetration for the entire service area is 9.95%, according to MBC, well below the national average.
Although Dee says he's concerned about satellite companies teaming up with telecom companies to offer bundles, he says the competition just makes him work harder. "Any time the competition does something, we have to be ready to combat it." Those are fighting words, and his weapons are cable's advanced services. Back to this issue
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