Adelphia Overhauls Digital, Bundle Pricing

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Trying to simplify current premium and digital pricing plans while also raising per-subscriber revenue levels, Adelphia Communications Corp. last week said it would revamp its packages over the next several months — and increase what it currently charges for comparable offerings.

Adelphia will focus on 12 packages, which may be supplemented with à la carte services. Basic plus expanded basic (an average of 75 channels) will be offered as Adelphia Classic. Add in PowerLink high-speed data service and it's called Adelphia Classic Advantagepak. The biggest offering — all digital channels, all premiums and all of their multiplexes — will be called Adelphia Ultimate.

The Denver-based MSO will roll out its new packaging over the next several months. Meanwhile, customer-contact personnel are being retrained to sell the new packages.

Ron Cooper, Adelphia's president and chief operating officer, said in an interview last week that the MSO's former regime had factored some steep discounts into some digital bundles in an apparent effort to accelerate digital penetration. But in some cases, the discounts priced some services at below operator cost.

Adelphia's new approach is to make its packages easier to understand and to sell them for prices the operator can afford to sustain. "The net of it is, consumers will have a better range of choice than they've had historically," he said.

The MSO also hopes to do a better job of upselling its existing base of about 1.9 million digital customers, including pitching high-speed data services when rebuilds are completed and broadband becomes available, Cooper said.

Cooper's former employer, AT&T Broadband, had also offered some steep digital-programming discounts that both Comcast Corp. and Mediacom Communications Corp. eliminated after buying systems from AT&T.

Local regulators in Adelphia markets indicated they do not welcome the upcoming changes.

"We've already been told [certain] rates may go up as much as 30%," said San Bernadino County, Calif., division chief of franchise programs Lori Panzino. "Repackaging is never in the best interest of consumers. It's all about the ability to charge more money for less stuff."

She predicted Adelphia's increased rates would be offset by customer losses.

Adelphia appears to be following the lead of other operators, who also determined through consumer research that subscribers find it easier to select services and compare prices with potential competitors of digital tiers when offerings are packaged.

Time Warner Cable, for example, is in the process of implementing branded packages called DIGIPiC 1000, 2000 or 3000, each with increasingly robust offerings.

Simplified packaging will be key to a company's ability to introduce and sell new products shortly, said Time Warner senior vice president of marketing Brian Kelly. The MSO is gradually migrating current customers to the new packages, he said.

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