NEVER SAY NEVER

When burglars broke into Jane Ferrall's Manhattan home in 1998, she hardly noticed that the robbers took the TV—her family hadn't turned it on in two years. The Ferrall kids spent too much time in front of it and too little time playing, she says now. Unplugging the TV was "the single best parenting decision I've made," says Ferrall. "I wouldn't bring back my television if you gave me a million dollars."

For all her antipathy towards TV, Ferrall represents a tantalizing target for the nation's cable and satellite-TV services, which are locked in a struggle to win over new customers in a maturing market. She is one in an elusive, but key, demographic: the 20 million or so families that either don't watch—or don't pay for—TV. The nation's subscription-TV services have collectively peaked at around 85% of American TV homes, so there are few other untapped sources of potential customers.

"This is the last frontier," says Warren Zeller, vice president of account services for Cohorts, a Denver consulting firm that helps cable companies recruit subscribers. "Today, there are only two ways to get customers: Cable and satellite can steal from each other, or they can get people who never signed up."

Of the 20 million households that don't subscribe to a pay-TV service today, according to the National Association of Broadcasters, about 6 million families can't afford the $40 monthly bill for basic service. The remaining 14 million represent an enticing target for cable and satellite companies. Known in the industry as "Nevers" for their stubborn resistance to TV's lure, these families can afford pay-TV, but simply don't care enough to write the monthly check. Of these, roughly 2 million families like the Ferralls don't own a TV. Finally, there are the outlaws: an estimated 11 million pirates who steal cable and satellite, a federal crime punishable by a $1,000 fine and up to 6 months in prison.

The federal government is suddenly interested in Nevers, too, as it decides how to deal with the homes that could lose television service when free over-the-air channels go all-digital in a few years. Homes that don't subscribe to pay-TV or don't own a digital set will no longer be able to tune in to anything unless they attach a special converter. Congress and the FCC want to know how many non–pay-TV homes will demand a free converter and how many, as FCC Chairman Michael Powell puts it, will "simply prefer reading a book."

People who don't watch TV appear to be an oddity in a media-obsessed nation where each TV home watches eight hours a day on average and one TV per house isn't quite enough—each home has an average of 2.7 TVs. Many holdouts now get their news on the Internet or listen to the radio. They seem actually proud to go against the grain of a culture preoccupied with 24-hour news cycles and celebrity worship.

Some Nevers reject the sex and violence on subscription TV. Holly Dawn Hunter of Huntsville, Ala., remembers well the day she turned off the TV for good: when she heard a cable news network update on school killings at Columbine High School in Littleton, Colo., accompanied by its own musical theme. "I realized how sick that was," she says. She hasn't watched since.

Others give up TV or limit it because of studies of TV's effect on kids' cognitive development. Mary Burke, a San Francisco child psychiatrist, didn't let her two kids watch any TV until they were 2 years old and sharply restricted viewing until they were 10. Now that they're older, TV is still a rarity for everyone in the family. "We treat TV like a martini or ice cream sundae. It's a guilty pleasure we sometimes enjoy."

To pull even more people away from TV, a nonprofit group called TV-Turnoff Network sponsors an annual week encouraging no TV, poster contests and a newsletter, The TV-Free American. A recent quote from its Web site: "Television is chewing gum for the eyes"—Frank Lloyd Wright. Like-minded Turnoffyourtv.com offers a comprehensive archive of poems on TV, studies about its effect on kids and alternate activities to TV watching. The site is peppered with such messages as "Kill Your TV" and "Weapon of Mass Distraction." Founder Ron Kaufman opposes media conglomerates' domination of public discourse and the constant barrage of ads.

Despite their oddball image, most Nevers are a marketer's dream. In a recent survey of 385 TV-free families, Eastern Washington University professor Barbara Brock found that more than two-thirds of them are headed by adults between 31 and 50 years old with two or more kids. More than half the parents had college degrees and earned a combined annual income greater than $60,000.

Brock herself first gave up TV in the 1980s when she and her husband were graduate students looking to save a few bucks and conserve space in their crowded apartment. "I'm not a 'Kill Your TV' person at all, but once you've gotten a taste of life without television, it's easy to keep it out."

But like oil companies searching terrain when reserves are scarce, cable and satellite operators have little alternative but to crack this market. Cable's annual growth rate is now flat—Sanford Bernstein analysts predict only two-tenths of a percent growth in subscribers this year. DBS, which has been stealing market share from cable, can expect decelerating growth rates of 6% in 2005 and less than 4% in 2006.

In such mature markets, DBS companies have already proved they can create customers. In the early 1990s, when cable operators thought penetration of TV households was stuck at 67%, satellite providers played up better customer service, more niche programming and better pricing. Today, those DBS companies claim 20 million customers, and total pay-TV penetration now stands at 85% of U.S. TV homes.

Through discounts and direct marketing, the cable industry, in particular, has mounted a crusade to win over new customers. Targeting customers' ids, the latest ads, prepared by New York firm Shepardson, Stern & Kaminsky, attempt to liken cable TV to such pleasures as puppies. Featuring the tagline "Better than …" the ads hype cable as a better experience than chocolate, gravity or the wheel, too.

Sanford Bernstein analyst Amelia Wong credits the top five cable operators for buying more local broadcast spots, a clearer route to signing up non-subscribers. Total broadcast ad spending at Comcast, Charter, Adelphia, Cox and Time Warner has increased from $19 million in 2002 to $97 million in 2004, she says.

DBS providers say that, while they are doing nothing specific to capture Nevers, they hope to pull some in by the addition of local channels in more markets, bargain packages and free installation. "Our primary focus is still attracting cable customers to our service," says DirecTV spokesman Bob Marsocci.

Cohorts' Zeller says pay-TV providers must convince folks like Burke that TV should be a bigger part of their lives. To capture them, providers must hit individual households with just the right pitch—not just blanket an entire ZIP code with the same mailer.

To reach those Nevers who think, like former FCC Chairman Newt Minnow, that TV is a "vast wasteland," Zeller suggests playing up a few classy channels like Trio and Bravo, as well as new services like video-on-demand. "They don't care whether they can get 150 channels; they just want something that's going to move their meter."

"Cable marketers once tried to convince customers their systems could be all things to all people," adds Seth Morrison, senior vice president for the Cable & Telecommunications Association for Marketing. Now most conduct demographic and psychographic targeting that requires extensive questionnaires profiling individuals' lifestyles, such as where they like to vacation, hobbies and personal values. He admits, however, that cable's efforts to reach this skeptical group are "slow-going."

But turning a non-believer into a buyer ispossible. Mike Fitzpatrick, a Denver father of two toddlers, bought the full package from DirecTV after relying solely on an old TV set with "rabbit ears." Now he has high-definition service, pay-per-view, TiVo and a college-football package. He takes advantage of video-on-demand after the kids go to bed, he says. "We wanted to get away from futile trips to Blockbuster and go with good pay-per-view.

"There's no single reason why we were so dark ages," he says wistfully. "We were just never motivated to get cable."