Cox Goes Retail with New Orleans Store

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Cox Communications Inc. said last week that it opened its
first stand-alone retail showroom in New Orleans last month. The MSO had also previously
tested retail kiosks in some of its markets.

"It was their idea," Cox executive vice president
of operations Maggie Bellville said in explaining why New Orleans was the first of
Cox's systems with a retail showroom. "They're in a competitive
environment, and they wanted to get out in front with something different."

Eight additional Cox systems have expressed interest in
opening retail showrooms of their own "immediately," Bellville said last
Thursday, following a keynote address at the CTAM Digital and PPV Conference in Los
Angeles.

Some of the issues involved in the MSO's plans for
additional retail sites include making sure individual systems find ways of having retail
showrooms pay for themselves, as well as finding and negotiating good retail locations.

"Retail is a tough business," Bellville said. She
added that cable systems could discover that retail strategies pay off if they can drive
more customer sales through the stores and start substituting retail locations for older
walk-in centers.

In her keynote address, Bellville said cable operators
should start using their walk-in centers for more than simply set-top returns and bill
payments by starting to pitch upgrades, such as Home Box Office and other premium-movie
services.

"Either [your customers] are going to take HBO, or
they're going to mail in their bills because they don't want to be sold,"
Bellville predicted. "Either way, you're a winner."

Bellville also recommended that to become more like
traditional retailers, walk-in centers need to be better located. "Cable needs to get
out there," she said. "We've hidden ourselves away too long."

The 1,200-square-foot New Orleans retail showroom is
located in a high-traffic strip mall next to a Borders Group Inc. bookstore.

Cox's corporate offices in Atlanta will help the local
systems to find high-traffic real estate sites and negotiate deals for them. But the
systems themselves will have to determine how to fit retail into their budgets. In some
cases, it will be through kiosks at local malls.

Whatever the location, Cox systems will drive consumer
traffic to the stores through special events and customer-education programs, such as
teaching people how to use the Internet, Bellville said.

Cox partnered with Samsung Telecommunications America Inc.
to equip the New Orleans showroom with large-screen TVs, cable modems and computer
monitors.

The Cox retail showroom will give customers a chance to
interact with new digital products and services in ways that can't be demonstrated
over the phone or in standard advertising. This is especially important for new services
like Cox Digital Cable and Cox@Home, Bellville said. "Certainly everyone knows what a
phone is," she added.

In addition to its own branded stores, Cox plans to
continue to pursue relationships with consumer-electronics retailers including Circuit
City Stores Inc., CompUSA Inc., The Home Depot Inc. and Staples Inc.

Other MSOs are eyeing retail showrooms and kiosks, most
notably AT&T Broadband & Internet Services, which is testing digital-cable sales
through some AT&T Phone Centers.

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