26 augusti 2007

How the Swedish analog cable television methodology lead to a stalemate

Commentary and analysis of the slow progress in digital cable

I remember how as a kid we soon got this new thing called cable television at home. It was something relatively new in the area I lived in and not everyone I knew had it ... yet. The idea was that your neighbourhood board of members met with cable companies to hear about their offers for cable television. Which company seemed like the most appropriate for our neighbourhood's needs and was the price deal reasonable or not? Once a deal was struck, every resident in the neighbourhood had to choose which cable tv package they wanted: either the basic or the extended package. Over time, however, the price dropped for households and it became more reasonable to move over in favor for the extended package. More time passed on, and eventually all that was left, was the extended package which at this point had changed to become the standard cable offering (analog only). At the same time, they had a small optional try-out for digital cable too. It was a set-top box with a couple of premium channels for those who felt like trying that out. I think the cable company wanted to see if there was any interest in the technology or not.

Meanwhile, a competing cable company started offering digital cable as an option back in the mid-1990s or so, more or less. Not many customers opted for it, but there was no demand yet, as the basic cable channels covered 99.9 % of peoples' television needs, AFAIK. If you wanted more you could always opt-in for analog premium channels. Digital was something exotic and experimental you could say.

Along the way, the premium channel companies decided to turn off analog signals and only offer the premium content with digital signals. This was alright, except of course for analog pirates who were a bit sad over not being able to receive free premium content for any longer. 

In 2005, terrestrial television towers began switching off the analog signals to go digital-only, in a transition period of approximately 2 years time. It was a political decision and they concluded that the switch-off was to be completed before February 2008. In the end, it was settled that they should be successful in completing it with good marginals before that date, namely October 2007. At the time of writing, in August 2007 they are yet to switch off the last couple of analog transmissions, but they are getting very close to their goal.
  Meanwhile, the biggest cable provider has consistently made press releases about the fact that their customers don't need to do anything in order to continue watching television. They are not affected by the analog switch-off, they have said. At the same time, they are also pushing more and more for their customers to consider switching to digital cable, where they can choose between Small, Medium and Large packages depending on household needs.

The Swedish populations' reactions to the transition from analog to digital television have consistently been either negative or ignorant, depending on whether they themselves are directly affected or if they are just hearing and reading about the process - in the media. Everywhere that I have seen people comment about this matter, no person at all have said that they are in favor of the move and neither have they said that they are anticipating it with excitement. When analog cable households have been asked questions about their awareness of the analog switch-off, response always comes out the same it seems: 

"I have cable television. I am not affected by the switch-off. I can continue viewing tv 'business as usual'".

So, while both satellite providers in Sweden have been digital-only since the analog switch-off for satellite broadcast in 2001, and the analog switch-off for terrestrial viewing soon is completed, the cable households are left with choosing themselves when they want to make the switch to digital viewing. This far, estimates show that somewhere around 90 % of them have voted to stay with analog without intent of switching. They want to continue watching tv as usual, the same way they have watched it all their lives. No matter the age groups, they all say the same thing.

The reason behind the reasoning is what I find most interesting, and I think that cable providers should consider investigating not *what* their customers want, but *why* they want it. Only then can they get more people to sign up for digital cable. That's what I think at least.