Dont Like the Movie? Ask for Money Back

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New York -- As part of its relaunch of Encore as a
first-run premium-movie channel, Encore Media Group LLC said it would offer subscribers a
refund if "The New Encore" doesn't satisfy them with "a great movie
every night -- guaranteed."

Encore is in effect putting a new twist on the cable
industry's service-guarantee campaign of recent years.

The refund offer will be a big part of Encore's $20
million multimedia branding campaign, breaking today (May 24). But Encore executives
didn't see it as a risky move.

Encore chairman and CEO John J. Sie told reporters here
last week that the company was so confident in the strength of its growing movie stockpile
for primetime, "We will give [subscribers] a refund -- a groundbreaking concept in
pay television -- if they don't find a great movie every night."

Sie -- who called Encore "a full-fledged maxi-pay
channel with mini-license fees" -- said the consumer guarantee was supported by a
$2.3 billion investment in movie rights, including $1.7 billion in first-run rights.

Not that Encore -- which is owned by AT&T Corp.'s
Liberty Media Group -- expects to shell out much in refunds. Encore vice president of
marketing Terry Neill said the refund would be limited to $2.50 per subscriber household,
per year. And to get it, customers must call a special 800 number and submit copies of
their cable bills.

Encore's monthly cable bill ranges from $1.95 to
$2.95, depending on packages, Neill said.

Prime Cable director of marketing Pam Burton said that even
though her MSO doesn't carry Encore, "I think it's a great idea. It says a
lot about their standing by their product. We as cable operators always offer guarantees,
so it's nice to see a programmer do the same."

Neill said in March tests at the 250,000-subscriber
AT&T Broadband & Internet Services system in Tulsa, Okla., and the
135,000-subscriber Cox Communications Inc. system in Pensacola, Fla., no subscribers
phoned in to ask for their money back

The promotional campaign will run on about 15 cable
networks and on radio, and Encore will provide affiliates with customized cross-channel
promotions and customer-service-representative training, Encore senior vice president of
marketing Mike Hale said. Among the networks on the schedule: Comedy Central, Discovery
Channel, Fox Family Channel, Lifetime Television, Turner Network Television and USA
Network.

Movie titles plugged in the TV spots included Con Air,
Scream, The English Patient, Cop Land, G.I. Jane, Pulp
Fiction
and Evita.

Sie boasted that Encore, with nearly 14 million
subscribers, recently passed Cinemax as the No. 2 pay service by 2 million homes, based on
subscriber count. He felt that Encore's "great movies" positioning
won't conflict with sister first-run-movie network Starz!, which promotes "new
hit movies."

Later, on CNBC's Power Lunch, Sie said,
"The customer-service reps of our cable and satellite providers love that idea
because they can sell it with confidence."

Bolstering the product lineup, Encore Entertainment Group
announced library deals last week with The Walt Disney Studios, Warner Bros. and 20th
Century Fox for more than 800 films, some of which won't appear on Encore until 2008.

Encore's Thematic Multiplex channels will also benefit
-- for instance, from access to about 150 Westerns. Encore's film vault will grow to
5,000 titles.

Encore also said it signed a long-term output deal with
independent studio The Shooting Gallery, starting with its titles due for theatrical
release in 2000. Two weeks ago, Encore signed deals with Samuel Goldwyn Films LLC and
Destination Films.

In addition, Encore signed a long-term renewal with DirecTV
Inc. for Encore, Starz! and its Thematic Multiplex channels, and it extended its first-run
series, The Directors, 13 additional episodes beyond the initial 26. Upcoming
subjects will include Steven Spielberg, Martin Scorsese and Barbra Streisand.

Sie said Encore's recent talks with MGM are aimed at
securing film-library and first-run movie rights. But he emphasized that Encore would not
get involved in the production end of the movie business.

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