Verizon is now telling its FiOS TV subscribers that beginning in May their analog TV channels will be transitioned to a digital format. This will affect all subscribers who have directly connected any of their TV sets to receive FiOS’ analog TV package of local broadcast and access channels. The magic words that Verizon is using to break this news—improved, more, free and easy — may be of interest to cable operators who are fretting about how to deliver the same message to their own subscribers.
Cable operators are worried that their analog subscribers will resent having digital set-tops foisted on them versus no set-tops or low-cost analog STBs. The broader context of broadcast TV’s digital transition should alleviate some of this potential resentment. A positive spin on the digital changeover, as is now being modeled by Verizon, could further help to make the medicine go down more smoothly although admittedly Verizon has less to fear since there are relatively few analog-only subscribers to its low-profile local TV package, as compared to the still numerous legacy analog cable subscribers.
In a letter to FiOS TV subscribers, Verizon headlines “an exciting change” that will “…continue to improve the Verizon FiOS TV experience….extending quality of digital to all TVs in your home…to bring you even more of the great HD and special interest content.”
Then, the catch: “Each TV in your home will need one of the following devices to receive the new digital signal: a Verizon-issued digital adapter, or a Verizon-issued set-top box or CableCARD.”
But then, the good news: Verizon offers to provide this equipment for free, as in FREE, all caps, repeated twice. “To avoid disruptions to your service,” subscribers are told to contact Verizon “to order your FREE equipment.”
The letter concludes: “…an all-digital signal will give us the chance to provide improved picture and sound quality, including more HD channels and programming…We will make going 100% digital 100% easy!”
Verizon is fulfilling its commitment to the FCC to complete FiOS TV’s transition to all-digital by February 2009. The FCC requires cable operators to continue to deliver local broadcast TV stations in analog form until 2012 or until a cable system has transitioned to 100% digital, whichever happens sooner. Whenever cable’s digital transition occurs, perhaps cable’s legacy analog subscribers will be mollified if they are persuaded that it will be easy, will improve their service, provide more content, and require only that they accept FREE equipment.
While FREE may work for subscribers, it does have financial implications for MSOs facing substantial capex for the digital set-tops. The financial equation is made more complex by the fact that subscribers who currently have digital STBs now pay a monthly fee for this equipment. Offering digital-transition STBs for free could put this existing revenue stream at risk. FiOS subscribers also currently pay for digital STBs, generating revenues that presumably Verizon also wishes to retain. Here, again, Verizon’s approach may be suggestive for MSOs. Verizon will limit the free devices to reception of linear TV channels with no VOD access, thereby reducing their value for subscribers relative to revenue-generating STBs.
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment