News

New Digital Packages from Time Warner

11/16/2003 4:00 PM Eastern

Time Warner Cable is gradually overhauling its digital premium packaging, which includes a repricing strategy under which subscription-video-on-demand services from Home Box Office and Showtime Networks Inc. are being bundled with premium packages, rather than being marketed separately at a $6.95 monthly price.

Although an a la carte SVOD option will remain, Time Warner Cable marketing executives believe SVOD, premium networks and its packaging strategy have evolved to the point where it makes more sense to bundle the products together.

Many of the MSO’s divisions are offering the new packages: "DIGIPiC 1000," "DIGIPiC 2000" and "DIGIPiC 4000."

The new strategy grows out of focus-group research conducted last year, said Chuck Ellis, chief marketing officer at Time Warner Cable. "One thing came through loud and clear: Consumers wanted easy and simple-to-understand pricing and packaging. DBS [direct-broadcast satellite] had a significant advantage over us" in that regard.

Ellis said about 60% of Time Warner Cable’s divisions have deployed the new packaging, and by year’s end, nearly all of the MSO’s systems will be offering DIGIPiC.

DIGIPiC 1000 is the entry-level package, featuring standard basic channels, digital channels, Music Choice and access to VOD. Pricing varies by market, but the average hovers around $49.95 per month.

DIGIPiC 2000 includes two pay services and their associated SVOD packages, and it is priced in the $64.99 neighborhood. Currently, only HBO, Showtime, Cinemax and The Movie Channel SVOD are available, but Time Warner Cable executives said they are negotiating with Starz Encore Group LLC for its SVOD package.

DIGIPiC 4000 includes four premium networks and their associated SVOD packages, and it is priced at roughly $79.95, again relative to market.

Each of those services is also bundled with high-speed data, at various discounts. Digital-video-recorder service carries a separate charge, ranging from $6.95- $9.95 per month. HDTV requires a subscription to the digital tier, but the HDTV set-top is leased to the subscriber for the same price as the typical digital set-top.

For more on Time Warner Cable’s DIGIPiC packages, please see Matt Stump’s story on page three of Monday’s issue of Multichannel News.

March