Every business would jump at the chance to have target customers with strong buying power, a passion for the product and a willingness to buy that product through simple word-of-mouth advertising. Now, what if that business owner was also the supplier of that product. That business owner is any Private Broadband Operator and those customers are your "multicultural" apartment tenants.

The population trends are incredible in the US, especially in the MDU market. The U.S. Census bureau reports that 31-38 million people speak their native language in their home and that there are 45 million people in the U.S. of Asian, Middle Eastern and European ethnicity. While it is true that some of these have been refugees from political or economic oppression, the vast majority is highly educated with high incomes and tremendous buying power. These people have the money and the inclination to become broadband customers. In addition, when they move to the US they tend to live first in MDU's - here is why.

When entering a new environment many new immigrants seek ways to express and maintain their cultural heritage. They often seek what is familiar to them, living among people of similar backgrounds. At the same time they recognize the obligation to understand the environment around them in order to survive in the United States. If you have ever traveled abroad, especially to a non-English speaking country, you can relate to this.

Recall the feelings you probably had after a few days in a foreign land. You hoped for a glimpse of CNN or a chance to see The New York Times. You wanted to feel connected to the US. You seek news from home. You hear another American voice and seek out the person. In short, you look for a connection to home and it makes you feel safe and comfortable when you find one.

Imagine you were a new immigrant to the U.S. You are faced with an uprooting that lands you in a new country for a 2-4 year assignment. Where would you live? With whom would you seek to mix? How would you stay connected with your family and friends back home? The answers are obvious: 1) you would live in an area you could afford with others from your native land (like an apartment complex). 2) You would want to be with others like you to feel comfort and safety. 3) You would stay connected through long distance telephone and the Internet! The choices of where to acquire these critical tools for your survival are plentiful.

While traditional cable operators have increased bandwidth and fixed long-standing problems, they still face the same old obstacles in serving MDU communities. The giants must utilize precious bandwidth to service as many people as possible in their mega-service areas. Thus, their ability to provide channel lineups and service offerings tailored to an MDU area is limited. As a result, very few have seized the opportunity where it exists. This is not so for satellite providers!

Dish Network and DirecTV have long recognized the value of providing niche services to narrow audiences. Dish's suites of channels tailored to specific groups such as Asians and Europeans have taken off. Industry estimates are that as many as 600,000 Dish units have been sold to users who seek programming from their homelands. (This does not count Spanish language tiers). DirecTV, newer to the game, recently used a Chinese service to enter this growing market. Still, they cannot crack the MDU world where most of these new immigrants live.

The successful exploitation of small dish technology may soon be upon us in MDUs. Nevertheless, private operators know that the difficulty is making these technologies work and profitable. Therefore, private operators, for the time being, have the upper hand.

Four ways to make ethnic services pay
Private Broadband Operators can use broadband to augment revenue and cash flow in four distinct ways:
1. Increase basic penetration
2. Sell new premium units
3. Sell high speed internet services
4. Sell long distance phone services

Keep in mind the central point, that these new Americans want to remain connected to home. The fastest way to do this is to offer channels that feature programs from around the world on basic. Why not skip over ESPN Classic and History Channel, and instead use BBC World, CNN International, Fox Sports World and International Channel? These networks have more value in basic because they give the viewers the ONLY TV connections to their homelands. It will not take much to create an "International flavor" to your basic lineup. When you do it, you will give these folks real incentive to subscribe.

It works and here's proof. A small private operator (no longer in existence) was inundated with requests for TV Asia and Zee TV1 from two properties in the Atlanta, Georgia area. Because this PCO was technically challenged, they could not offer new premium services. Consequently, they added International Channel to the basic lineup. In a matter of weeks basic penetration increased by 3-5 points, and the local property manager reported happier residents and subscribers.

A second viable avenue is to offer new premium services to residents. The choices are plentiful. Services exist to serve Chinese, Japanese, South Asian, and European immigrants. Since it is not likely you will have the bandwidth and security to add all available 12 channels, the question is, "which ones to choose?" The answer will come from your existing relationships with property managers.

The local property manager knows better than anyone who will be your target audience. Let the local management tell you who are the dominant ethnic groups. You will be able to select one or two that really hone in on your target. Moreover, with generous revenue splits, you will start earning new money right away.

You can choose to offer these services digitally or analog, depending on your level of digital deployment. It is interesting to note here that many operators who are competing head-to-head across large franchise areas are choosing ethnic premium services as the first key attack point in many markets. Providers are committing significant bandwidth to such channels and they are using them to gain entry into key markets. Therefore, the quickest and easiest way to increase revenue may be basic and premium TV. But what of this notion of high speed Internet service?

A common misconception about immigrants is that they are financially limited and do not purchase optional services. However, recently completed proprietary research by International Channel reveals some startling statistics. Among three key ethnic demographics (of International Channel viewers), the penetration of PC's connected to the Internet dwarfs the general US population. For example, 70% of Korean viewers are connected to the Internet and 98% of South Asian viewers are currently connected! They use traditional dial-up connections to maintain contact with home. Moreover, like all users, speed is an important feature when considering an Internet service provider. Therefore, you have a very likely prospect for your offerings. However, you must earn their trust.

A private operator can create a positive relationship with these customers by offering tailored basic and premium choices. Once satisfied, they will be very likely to be interested in your Internet service as well. However, it does not only Internet that can increase your household revenue/sales. Telephony presents a great additional opportunity for PCO's as well.

Current market measurements show that new immigrants, especially Asians, spend an inordinate amount of income on long distance telephone services. Research indicates these people are highly likely to spend over $150 in long distance telephone charges each month. Again, these new Americans prove themselves prime prospects for your enhanced services. With little or no infrastructure upgrades, you could begin offering long distance phone cards and other services to them.

Marketing: the simple way

The marketing of these services is easier than you may think, even if you do not have any Chinese or Korean speaking CSRs. We encourage you to think about traditional tactics, executed in a slightly less traditional way

First, you can continue with marketing methods you traditionally use, with minor twists. Using simple flyers and door hangers that feature these homegrown channels, you will get the attention of the prospects2. Second, customized lobby posters and signage at the management office will be effective methods to announce the availability. Finally, we recommend quarterly sign-up parties featuring ethnic foods rather than American fare. These tactics are more than just attention getting devices. They demonstrate cultural sensitivities and will help to build your relationship. This is vital to stimulate your best marketing tool of all: personal referrals.

Your greatest success will be achieved by activating positive word-of-mouth advertising. To a new immigrant, nothing leads towards a purchase like unsolicited support from a friend or neighbor. As long as you deliver the goods, you will also take advantage of an important trait among new entrants in America-loyalty to your product. Numerous studies indicate that if you provide excellent products and services you will win a customer for life!!

Take another look at those new American customers. The advantages of delivering desired and needed services are numerous. You can make property managers and customers increasingly satisfied with your services. You and your shareholders will enjoy high revenue per household, cash flow and higher multiples.
Opportunity is loudly knocking at your door. Let it in!

About the Author
Jim Honiotes is Vice President Marketing and Communications with the International Channel Networks. The author may be reached with questions or comments via email at jhoniotes@I-channel.com