MSOs Agree: Bundling Works
By Multi Channel News Staff -- Multichannel News, 7/16/2002 12:01:00 PM
Boston -- Several MSO executives talked up their successes in offering services during the session dubbed 'Bundling for the Bottom Line' at the Cable & Telecommunications Association for Marketing's CTAM Summit here Monday afternoon,
At a time when 'video is no longer the only key to our growth,' moderator Hilda Chazanovitz, National Geographic Channel executive vice president of marketing and new media, said bundling video with high-speed Internet access and telephony services has become increasingly important to operators.
Like effective advertising, she added, bundling 'has to operate on a rational level, as well as an emotional level.'
Comcast Cable Communications Inc. Washington Metro/Virginia regional VP Jaye Gamble, who outlined the MSO's various offers since 1998, said its goals included 'driving trial and, therefore, adoption' and reducing churn.
'Bundling is all about adding value,' he added, 'but value is very subjective' -- even among different households and their members.
Gamble urged other operators to experiment with as many options as they can accurately track, before cautioning, 'You can add too much value and you have to watch your margins.'
Insight Communications Co. Inc. senior VP of operations Gregg Graff said that MSO has also tried various offers, including its currently promoted baseball-themed 'Triple Play' and 'Double Play.'
The former -- packaging digital cable, Internet access and telephony -- is priced at $89.95 per month and includes free installation during the promotion span (versus the normal $117 bundle price), he said, while the Double Play is pegged at $79.95 (vs. the regular $95).
Graff -- who noted that the Triple Play is becoming Insight's top draw -- estimated that its churn rates are under 1 percent each for video/telephony, video/Internet and the three-service bundle, but 5 percent for telephony alone and just over 2 percent each for video or high-speed alone.
AT&T Broadband VP of electronic marketing and integrated product strategy Mark Voboril said 1.6 million of that MSO's customers now take bundles of two or more services and churn has been cut by 20 percent to 40 percent in its different markets.
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