News

Charter's Content Grows With Subscriber Add-ons

12/01/2002 7:00 PM Eastern

The content side of Charter Communications Inc.'s high-speed data business is branching out. Over the past two months, the St. Louis-based MSO has added two music-subscription services — Listen.com and FullAudio — as $9.95 a month add-on packages for Charter Pipeline data subscribers.

And in the first quarter of next year, Charter will deploy a subscription sports video service from an unnamed cable programmer — the next step toward determining which types of content broadband consumers might pay for, said MSO vice president of new products and channels Shahid Butt.

"There's a lot of online content becoming available, but it's still to be determined what percentage of the population will want to pay for it," he said. "We're doing several trials to assess how they'll respond."

Listen.com offers unlimited streaming of thousands of songs, as well as an Internet radio service. Consumers can burn a song onto a CD for another 99 cents.

FullAudio offers a tethered download service, which allows users to download 50 songs a month for $9.95, Butt said.

In research, Charter determined that music downloading was the top service consumers were willing to pay for, followed by firewall and security services, Butt said. The two music services are available in all of the MSO's systems.

Subscribers can find the information from the MSO's The Charter Zone Web site (charterzone.charter.com), by clicking on the headphones icon. Charter Zone serves as a marketing and information outlet for the MSO's advanced video and data products.

Charter Pipeline serves more than 1 million cable-modem subscribers, at speeds ranging from 256 kilobits per second to over 1 mbps. The MSO suggests that consumers interested in the music products upgrade their service to at least 768 kbps.

The 768 kbps service sells for $39 to $45 per month, depending on the market. The highest-tier service costs an additional $10 to $15 per month.

The long-term goal is to determine which types of content consumers would pay for, and potentially add those services to the top-tier package at no extra cost, Butt said.

Listen.com launched over Labor Day, while FullAudio debuted last month. Butt declined to discuss sign-up rates.

"Most subs were gotten through e-mail marketing efforts," he said. "We will be promoting [the music services] on a regular basis. We're getting a decent amount of people getting into the paid category from the free category."

Charter promotes the subscription services through "e-vision," a monthly e-mail newsletter sent to subscribers.

"We're getting a 50 percent open rate and pretty decent click-through numbers," Butt said. Charter Zone generates about 800,000 unique visits per month.

In rolling out the sports service, "we'll start in one market, and offer the service to consumers and see what kind of response we get," Butt said. As was the case with the music service, sports could be added to a higher-tiered data service, to drive penetration.

Once Charter develops several subscription services, the MSO might offer a menu of choices, he said. Consumers could pick one service from a list to be included in a base price modem service, then add others on an à la carte basis.

Butt said Charter has talked with Real Networks Inc., MovieLink and the National Association for Stock Car Auto Racing (NASCAR) about their respective content packages.

"NASCAR.com interests me a lot," as it offers race video and audio highlights, plus race-day information and statistics, Butt said.

Charter also is talking to cable programmers with significant online content plays in such genres as children's fare, news, sports and do-it-yourself information.

"We want to get consumers into live scenarios to evaluate whether they're willing to pay for content," he said. The children's area "could be a sleeper category," he said, given the volume of online material available from Disney Channel, Nickelodeon and Cartoon Network.

Charter and Microsoft Corp. have signed an agreement which certifies that Charter Pipeline is compatible with the software giant's "Xbox Live" gaming service (www.xbox.com/live). But Xbox marketing messages won't be found on Charter's Web site, at least at first.

"We don't want to overtax our customer care reps with learning new product," he said.

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