We spend a lot on our TV entertainment, but surveys show many of us don’t know what we’re buying
Peter Wilson
Sun
From Corner Gas to the CSI and Law & Order series to Desperate Housewives to Hockey Night in Canada to NFL Sunday Ticket, Canadians love their television.
On average, we eagerly lap up about 22 hours of it a week, with 7.6 million subscribers hooked up via cable and 2.3 million subscribers pulling it in via satellite dishes.
We like new video bells and whistles with about 50 per cent of viewers subscribing to the new digital services. And, as the word builds, we’re getting ready for high-definition television (HDTV), although right now only about four per cent of us watch it.
As well, we’re considering those new personal video recorders (PVRs) that allow us to pile up hours of digital programming (including HDTV) on massive hard drives.
However, despite the fact that Stats Canada reports that the Canadian households in 2003 spent an average of $460 a year on cable and satellite service, most of us really don’t have a handle on what we’re getting for our money.
Call it bundlemania, the result of which is consumer confusion.
For example, go on Shaw’s website — which, of course, you wouldn’t be able to do if you didn’t already have the Internet — and you’ll discover that you can get the Basic Cable & High Speed Internet Lite Bundle for $42.95 a month.
Or you could order the Premier Home Bundle (including digital cable and high speed light Internet) for $66.95 a month. Or you could go whole hog and get the Total Home Bundle (high speed Internet and digital TV) for $91.95 a month.
For the intrepid consumer to find out exactly what these bundles comprise requires persistence and the time to manoeuvre around the Shaw site to come across a chart of the TV offerings, where its all laid out.
Those who want these bundles then have to discover the difference between plain old high speed Internet and the lite version.
Then consumers have to price out a cable digital terminal and a Internet modem either to buy or rent.
As well, there’s the difference between a plain old digital terminal ($99), a digital terminal that allows you to get HDTV ($239 after programming credits) and a PVR ($589 after programming credits.)
Then of course, there are the TV packages like NFL Sunday Ticket (available at $37.49 a month four four months); 18 Canuck games for $139.95, current video-on-demand movie titles at $4.99; and even pay-per-view offerings like Carmen Elektra’s Naked Women Wrestling for, well, we couldn’t actually determine a price, but we’re sure it must be there somewhere.
Oh, and should you want just basic cable with nothing else or full cable with all the tiers (and, again, you’ll have search around a bit to get the tier details) you’ll have to phone to get the price, because that depends, it seems, on where you live.
From talking to Shaw president Peter Bissonnette, we found that those offerings cost $25 and $47.95 respectively.
To be honest, it’s just possible that these unbundled prices are there on the site too, but we couldn’t find them with a couple of hours of searching.
But then nobody in Canada expects this to be easy.
Just ask Mario Mota, a vice-president at Toronto‘s Decima Research, who believes that satellite and cable providers make their offerings too tough to understand — so much so, that many Canadians don’t even know what it is that they’ve actually ordered.
“There’s no doubt that consumers are confused about offerings in terms of what they are and who gets what,” said Mota in an interview. “Our survey has constantly shown major consumer confusion, even to the point where people don’t even know what they have and yet they’re paying for it.”
Mota believes that cable and satellite operators make the various tiers, bundles and deals far more complicated than they should and this actually makes it hard on themselves and restricts their ability to get more revenue from customers.
“They’ve really got to step back and make the offers as simple as possible for consumers because, first of all, people don’t have the time and energy to work their way through this stuff,” said Mota.
One of the reactions to the plethora of offers is that users just settle for the simplest to understand
That means, said Mota, that cable and satellite providers are missing an opportunity to upsell customers.
As well, he added, consumers are confused about the technology. One of the questions that Decima asks is if subscribers have a digital box that allows them to receive HDTV broadcasts.
“A large proportion of customers, in the 20 to 25 per cent range. are telling us they have an HD box, but they don’t,” said Mota, who checks the model numbers. “They just have a standard digital box.”
Strangest of all, a small group of people can’t even name their TV provider. A few in the Lower Mainland still believe they subscribe to Rogers, which sold out to Shaw a few years ago.
There’s somewhat less confusion over satellite offerings, because neither Bell Express-Vu nor StarChoice (owned by Shaw), can bundle TV with Internet services or, as is happening now at Shaw, with Internet phone offerings.
“A basic digital subscriber package is $27,” said Bell ExpressVu’s marketing vice-president Pat Button. “Then we have various theme packs — which are $8 a month — and we have the most popular package for us is what we call Pick 5 which has five theme packs for the price of four. The price then is $47 with the basic digital package.
“We find that customers go quickly to that $47 landing point and they sort of customize from there,” said Button
Should they want, Express-Vu users can take the Total TV package — including four movie channels with 12 theme packs, for $87 a month.
And for another $10 they can add as HDTV channels (Shaw doesn’t charge for its HDTV offerings, but is considering doing it soon. )And then there’s the NHL games and NFL Sunday ticket and the like.
Of course, with satellite TV you have to buy the dish and the digital box, which, depending on what you want, ranges from a basic $99 to almost $600 (with another $99 for installation, unless you take a 24-month contract..
At the upper end you get the HD PVR Plus System- Model 9220.
This model allows users to record up to 180 hours of programming (25 hours of HDTV) and, because it has two tuners can be connected to two TV sets and you can watch and record two live programs or record two programs while watching a third pre-recorded program.
Despite the criticisms of industry experts like Mota, Shaw’s Bissonnette doesn’t believe that his company’s bundles or offerings are confusing to customers.
And, said Bissonnette, consumers get real benefits from bundling because the more they add to their basic packages –including Internet and phone services — the more they save.
“About 51 per cent of our customers right now take some kind of bundle and there are very few of our customers that just take basic cable,” said Bissonnette.
On the Internet side, he added, just five per cent of their well over one million customers take the service alone, without bundling.
Express-Vu’s Button also believes that pricing for TV services is easy for its 1.6 million subscribers to understand and that they evaluate the service and, if they don’t like it, they can always switch.
“All of our research shows that customers are very price elastic, when they buy television or television services,” said Button. “Ultimately the value delivered by the product is reviewed and revalidated on an ongoing basis by the customer.
“So since they watch it and live it and breathe it, its a very personal part of their world every month when they bill comes in they validate whether its actually delivering the value that they thought it would.”
Mota, however, said that there is a reluctance by TV viewers to switch from a service they’re already using because they view it as a hassle and a step into the unknown.
Right now, said Mota, that is playing into the hands of the cable operators, because the early-adopter, must-have glow that first surrounded satellite television in its early years has faded.
In its most recent survey, Decima Research asked consumers who were considering going to digital TV in the next year, whether they were leaning towards satellite or cable.
Of course, this would be directed at cable subscribers only, because satellite TV is already an all digital service.
“And cable is really top of mind for them, rather than satellite,” said Mota. “Why is that? Well, these consumers are already cable customers as it is. So the decision to go with the cable company is easier.
“You’re staying with the same company, the same billing relationship. It’s not a whole new world of switching providers entirely.”
– – –
WHAT TV COSTS YOU. COMPARING SHAW WITH BELL EXPRESSVU:
Shaw Cable:
Basic Cable — Thirty-four channels including local stations, Seattle stations, The Weather Network, Sportsnet-Pacific, W, Vision CBC Newsworld and CTV Newsnet: $25 a month
Full Cable — Sixty-five channels, or three additional tiers of programming including Much Music, CNN, Spike, CNBC, History Television, Food Network Golf Channel, Life Network, Bravo! CMT and Showcase: $47.95
Digital Cable — Includes forty channels of music, plus eastern U.S. FOX, NBC, ABC and CBS stations (free) plus the chance to pay for, in bundles ( five for $6.95 or 30 for $22.95.) , such stations as Fashion Television, The Independent Film Channel, G4Tech, Travel TV and Animal Planet.
As well you can get movie channels (including six movie central channels for $20.95), pay-per-view, on-demand and specialty channels like Fairchild Television ($17.95) and Asian Television Network ($16.95) and adult channels like Playboy ($17.95) and Hustler ($20.95): $99 for basic digital box plus whatever you decide to order.
Shaw offers seven HDTV channels — including the major U.S networks and a movie channel — for which it charges nothing extra at the moment, but you need an HDTV box.
Bundles of other services: This is where cable differs from satellite, in that it can bundle such services as high speed Internet and Internet telephone service, which, in B.C., is available only in Victoria for $55 a month.
Shaw offers a Total Home Bundle (including high speed Internet, basic cable, full cable, pay-per-view, U.S. superstations, digital music and access to Shaw on Demand for $91.95.
Or you could go for the High-Speed Lite Internet plus full cable bundle (includes basic and full cable) for $69.95 and so on and on and on.
Bell Express-Vu:
Basic Digital Subscription: Includes all the Canadian networks, U.S. networks (either from the east or the west), music stations, Knowledge Network, etc.: $27 and for another $1 you can have both east and west feeds of U.S. networks.
Extra Value Combo: Offers the basic digital subscription with any five theme packs. Theme packs include the general headings of news and learning, sports, family, lifestyle, variety, movies and french, some with two offerings each. Among the stations available are CNN, TSN, Food, Much More Music and several channels, like Book and Lone Star, that on Shaw are included in the digital cable lineup: $47.
HDTV Value Combo: Same as the Extra Value combo, except that you get as many as 27 channels in HDTV, when they feature HDTV programming, including the likes of NBC, Fox, ABS and CBS: $57.
Ultra Value Combo: Same as the Extra Value Combo, but with premium movies and six theme packs: $68.
Max Value Combo: Basic digital subscription, premium movies, with all 12 theme packs: $88.
Pay-per-view: Movies, sports, special events and the like are all available here including the likes of NFL Sunday Ticket ($179), NHL Centre Ice ($179), Canucks Pay Per View ($139.95), WWE Wrestling (the recent No Mercy was $34.99) and Football Cheerleaders exposed for $4.99.)
© The Vancouver Sun 2005