Competition: FiOS TV Plays Catch-Up in Virginia—One Dry Cleaner at a Time
Starting with this issue, CableWORLD will chronicle the tactics and strategies of cable operators' competitors. We begin with a look at Verizon's marketing in Northern Virginia.
While not everybody's convinced that Verizon's FiOS TV will pose a formidable challenge to cable, you have to admire the telco's marketing.
Its campaign in Herndon, Va., is all about meeting masses on the spot, as opposed to using mass media.
A relatively affluent community 20 miles northwest of Washington, D.C., Herndon is Verizon's second all-digital overbuild. The system launched in November, weeks after FiOS landed in Keller, Texas. Herndon falls within Cox's Fairfax County system (242,000-plus customers) and Comcast's system in Reston. Verizon won't divulge how many subscribers it's attracted so far in Herndon, or even how many households FiOS passes. The way it's spending marketing money speaks volumes about Verizon's confidence in its product, though. Perhaps with good reason--as in Keller, Verizon offers some 330 channels in Herndon. Expanded basic (180-plus channels) costs $39.95 per month. Cox's expanded basic (100-plus) costs $41.99.
Most of the marketing attempts to catch residents at places they frequent. Verizon reps appear at neighborhood dry cleaners, take-out joints and restaurants, distributing flyers and urging citizens to watch service demonstrations in a truck. Sometimes business proprietors allow Verizon to print FiOS TV information on dry cleaning bags or Chinese food containers. Verizon also collaborates with restaurants on events, such as a free-food night where customers can win prizes and see TV with Verizon's logo on the set.
Obviously Verizon believes street marketing is an effective tactic. Indeed, a radio/TV campaign was considered, but declared unsuitable. "Operating in one community doesn't lend itself to a big TV buy," Chris McKay, Verizon's Virginia regional marketing director, says. "You get a broad reach, but it's cluttered. The challenge is breaking through...intercepting consumers where they shop or are entertained communicates that we are a local company investing to give them more TV and broadband choice."
CTAM president and CEO Char Beales wonders whether these techniques will succeed. "It will be hard, because they're the latest entrant in a market with two operators that consumers are happy with," she says.
Cox hasn't changed its marketing approach. "In our view, Verizon's simply playing catch-up," Cox Fairfax's Alex Horwitz says.
Perhaps, but Verizon's playing catch-up with gusto. Potential residential customers have received two packages of marketing materials via Federal Express: one touts the channel lineup, the other hawks Internet access. This is followed by regular calls from FiOS' door-to-door salesmen. Prior to the launch of FiOS TV, Herndon residents received postcards in the mail telling them the service was coming.
Cable might do well to heed Beales' advice: Cox and Comcast should "watch what Verizon is doing very carefully," she says.
http://cableworld.com/cgi/cw/show_mag.cgi?pub=cw&mon=020606&file=competitionfios.htm
