Encouraged by early returns from a rollout in a Los Angeles cable overbuild, Starz Encore Group LLC may expand its push to package a premium service or multiplex alongside subscription video-on-demand.
During the last six months, California-based overbuilder Altrio Communications Inc. has been offering a $12-per-month Starz Super Pak/subscription VOD combination in three of its Los Angeles-area territories.
As part of the marketing efforts in Arcadia, Monrovia and Pasadena, Starz worked up its own mobile SVOD demonstration, driving a Jeep sport-utility vehicle into communities. Telemarketing and direct-mail flyers were also enlisted.
After digesting results from the rollout, last October to December, Starz vice president of SVOD Greg DePrez said there is an "extremely compelling case" for operators to bundle on-demand channels with the premium services from which they are derived.
Over that span, total SVOD usage per month increased from 43 percent to 57 percent of Altrio's base of customers with that capability, DePrez told a Kagan VOD Summit audience earlier this month.
And Starz Super Pak penetration improved 37 percent from the campaign's launch to 52 percent among the attendant Altrio customer base. Starz On Demand customers also doubled their pay-per-view buy rates, DePrez said.
As for Altrio, the operator's digital-subscriber count in the three communities grew by 16 percent from October through December, to 81 percent. Citing corporate policy, the operator did not disclose basic or digital subscriber counts.
"If we had that growth all over the U.S., [Starz Encore CEO] John Sie would retire and I would retire," DePrez said at the VOD Summit. "This proves that SVOD is the training wheel for both VOD and PPV. Altrio positioned us delightfully."
Altrio chief marketing officer and senior vice president Hope Neiman confirmed the fourth-quarter increases, adding that early January and February field reports suggest that the pace of digital-subscriber growth hasn't slowed. But Neiman will not yet advocate the adoption of SVOD/premium packages by other operators.
"There's a lot of special things we do as a system that entice our customers to be likely SVOD users," she said. "We've pushed on-demand services from the start, so customers were used to having a wide selection of VOD product when they were introduced to Starz's option.
"We positioned the campaign so that the two elements tended to feed off each other."
Another key strategy: Directing customer inquiries only to customer service or telemarketing reps who are experienced on-demand users, so they could guide customers through the process and help close sales.