June 18, 2007

The Multicultural Demo: Cable’s Got the Goods

A new study says the triple play makes cable the best fit for multicultural customers.

By Simon Applebaum

The accepted view is that cable operators have ceded multicultural consumers, and the revenue they generate, to satellite. That’s no longer the case, argues Adriana Waterston of Horowitz Associates.

"[Cable operators] are in a much better position than they’ve ever been versus DBS," says Waterston, VP, marketing and business development, at the New York-based research organization, which has been tracking multicultural media habits since 1992. "A few years ago, [DirecTV and EchoStar] were considered the cool, high-tech services for most of these consumers. The tables are now turned. Cable is now the cooler, high-tech medium in their eyes."

She credits adoption of the triple-play strategy for cable’s appeal. Combo digital/high-speed Web access/telephony deals that include discount international calling and more in-language channels sell subscriptions, Waterston maintains.

"Our research shows that multicultural audiences over-index — use more frequently than other demographics — advanced services, especially broadband," she says, citing Horowitz’s "Connections: Broadband Lifestyles of Multicultural Consumers" study, which was showcased at the company’s recent Multicultural Forum. "The triple play is a good match for that usage," especially for "connected multiculturals."

Waterston declined to provide figures showing the current subscriber gap between cable and DBS (the data in the chart is from 2006).

In the late 1990s, DirecTV and EchoStar leaped ahead of cable among multicultural consumers by launching ethnic premium networks and mini-tiers. The 2000 U.S. Census "woke the industry up" by reporting large population increases among Latinos and other ethnic categories, Waterston says. That prompted Time Warner Cable and other operators to roll out Spanish-language digital bundles.

How can operators move ahead of DBS — and not fall behind FiOS TV, U-verse and other telco upstart ventures — in the multicultural arena? Waterston provides some tactical tips:

• Offer more ethnic VOD and promote it widely. "Providing VOD is 50% of the game; letting people know it’s available is the other 50%."

• Offer lots of local programming and do community outreach, which DBS can’t do. "Drive home the idea that cable provides all the services people want, and does them well."

• Keep multicultural audiences in mind when making bandwidth expansion decisions. "Allocate more capacity to digital, high-definition, VOD and other advanced services targeting them. These audiences want it all and deserve it all."