Cox Sets Sale for Retail HDTV Territory - Multichannel

Cox Sets Sale for Retail HDTV Territory

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Cox Communications Inc. has given more definition to retail, adding two new high-definition television markets in which customers can opt to buy their digital boxes off the shelf.

The Atlanta-based MSO rolled out HD service last month in Oklahoma City and Cleveland. In both locales, customers will be able to buy their Scientific-Atlanta Inc. Explorer 3100 HD boxes for $499 at retail stores.

Meanwhile, S-A and Best Buy Inc. forged an agreement to provide the Explorer 3100, co-marketed with Cox service, in Phoenix.

It's all part of an effort to ensure that HD-hungry customers associate Cox with high-definition even as they buy their home-theater gear, according to Lynne Elander, vice president of video product development.

Research from the Consumer Electronics Association indicates that between 20 percent and 25 percent of U.S. households will buy a new TV set in any given year, and increasingly, HD is becoming part of the picture.

"When customers are in that consideration for a set, it's important for us — cable — to be there, particularly these days with the aggressive promotion of digital TV and HDTV sets," Elander said. "So we think that pursuing a sales strategy allows us to develop the kinds of relationships with some of our retailers that will ensure we are there at the point of sale when a customer is considering buying an HDTV set."

Still, the retail model won't be absolute. In some HD markets, Cox will stick with its traditional leasing strategy.

The road taken depends on market conditions, the competition and the retail relationships that the operator can forge in each market, Elander said. It also gives the MSO valuable market information during HD's early stages.

"We're definitely looking at the differences in consumer response in a leased versus a sales market," Elander said.

One such issue is how consumers will react to a $499 HD set-top box. While cable critics have argued that such a price is too high for mainstream consumers, Elander said for now the early adopters have been more than willing to purchase at that price.

"Let's put it this way: We have customers," she said. "We have customers who have bought these $500 set-top boxes and are enjoying their HD programming right now."

In addition to Phoenix, Oklahoma City and Cleveland, Cox has launched HDTV in Omaha, Las Vegas, Northern Virginia and San Diego. It now has HD service available in almost 50 percent of the digital homes it passes.

With the exception of Cox's original HD test bed in Omaha — which launched service three years ago, using a sidecar HD box — all of the MSO's high-definition service rollouts thus far have been in markets that employ S-A conditional-access systems. Given that Cox's markets are roughly split between S-A and Motorola systems, Elander said Cox is "working really hard on the Motorola side of the family. Literally, we are beholding to when the Motorola boxes with the appropriate software are ready."

When contacted, a Motorola spokeswoman said plans call for the DCT-5100 to be ready for a launch in a Cox system within 90 days.

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