Cox Communications Inc. has started a retail digital-cable marketing pilot program with San Francisco-based consumer electronics retailer The Good Guys Inc.
A Cox Digital Cable starter kit is available in select stores in the Orange County, Calif., and Las Vegas markets. The companies plan to expand the partnership to San Diego within the first quarter of this year.
The Good Guys stores will not sell digital-cable receivers through the pilot program. Instead, consumers can purchase a Cox Digital Cable starter kit for $29.99, which includes installation for up to two televisions, one free month of digital cable service, three tiers of digital programming, a free month of four multiplex premium services and five pay-per-view movie coupons. The MSO said the starter kit is worth $170.
To encourage consumers to visit the retailer, the special incentives included in the kit are available only through the Good Guys retail offer, said Cox director of sales Beth Denning.
"We wanted to be in the retail environment, especially during the holiday season," said Denning of the company's decision to seek partnerships with consumer electronics stores. "We wanted to be right next to [the direct-broadcast satellite competition] when consumers are making their buying decisions."
Good Guys has devoted an end-of-aisle display to the Cox Digital Cable starter boxes and provides a live digital-cable demonstration on one of the store's top-of-the-line television sets, Denning said. Cox has also put together an on-site training program to help Good Guys' sales personnel walk customers through a digital cable demonstration and sale.
A live demonstration allows customers to learn how to manipulate the interactive programming guide, for example.
Cox will retain responsibility for installing the digital-cable receivers. Instructions on how to set up an installation appointment are included in the customer's starter kit.
"We are looking at self-installation options for our customers down the road," Denning added.
Although Cox and Good Guys have worked together to promote digital cable for several months, the companies are still working out the details of their marketing relationship. For example, the MSO and the retailer are discussing whether Good Guys will promote Cox Digital Cable in its advertisements and Cox has not yet devoted cross-channel spots to the retailer.
To help drive traffic to stores, Cox is also in the early stages of planning special in-store events with the help of its programmers, such as Home Box Office, Denning said.
Good Guys and Cox share only a few markets in California and Nevada. The MSO has held preliminary talks with other retailers, but does not expect to announce other partnerships until it has had the chance to evaluate the pilot program over the next three months or so, Denning said.
"This is definitely the start of something we want to continue," Denning said.
Though digital cable boxes themselves are not expected to be available on store shelves any time soon, that hasn't stopped other MSOs from making moves into retail. AT&T Broadband, for example, announced a partnership with Best Buy Co. Inc. in October, and Adelphia Communications Corp. markets its cable products through its own stores in the Great Lakes region.
Cable modems have received wider retail distribution than digital-cable boxes via a mix of computer and consumer electronics stores. Hardware manufacturers have successfully sold cable modems through retail with cable companies promoting their high-speed Internet service at the same time.
But MSOs and digital cable set-top manufacturers have not yet found a cost-effective way to encourage consumers to purchase digital cable boxes through retail, especially as DBS companies deeply discount their competing products.