By adding telephony in a quartet of markets, Insight Communications Co. has been able to ring up solid revenue gains among customers both new and old.
"We're big believers in the bundle," said senior vice president of marketing Pamela Euler Halling. "Telephony rounds out our offering."
Insight has enjoyed "great success" with its packages of phone service, video and high-speed Internet access in Louisville and Lexington, Ky.; Columbus, Ohio; and Evansville, Ind., said Euler Halling. And in the process, the MSO has reduced its subscriber-churn rate.
That success in marketing bundled services has earned Insight the Multichannel News
Innovator Award for consumer marketing.
The churn rate for two- and three-product packages has run "about half or less than the single-product rate," said Euler Halling. And the take rate for customers who order two or three services has averaged about 23 percent, she said. Upgrades have been taken at a rate of about 40 percent.
"Churn for multiple products is less than 1 percent a month for bundled customers, which on average is 50 percent of the single-product churn rate," she said.
The team at Insight's Louisville system scored particularly well, said Euler Halling. That's where the MSO first tested its bundling strategy — and where the attendant higher take rates and lower churn ratios inspired the New York-based MSO to take the idea to markets elsewhere.
Overall, Insight touts its discounts as an incentive for prospective customers: $10 for those who take two products, $20 for those who buy three.
Insight's strategy has a lot of moving parts, Euler Halling said. For one thing, all of the operator's employees — from installers to customer-service representatives — must be well acquainted with the bundles and their components.
Once the bundle becomes established in a market, Insight's marketing team goes to work at deploying an array of telemarketing and direct-mail efforts. Billboard ads and cross-channel promotional spots also aim to get the message across.
The MSO also puts signs on trucks and in its office lobbies to plug the bundle.
In-house, the MSO uses the generic terms "double play" and "triple play" to describe the bundle, Euler Halling said. But those baseball terms have not taken the marketing field.
Instead, the MSO's ad copy reads, "Put cable, Internet and local phone together. Save $20 a month."
Similar imagery has been integrated into just about all of Insight's marketing materials. Ads employ three colorful globes emblazoned with the words "cable," "Internet" and "local phone."
That global image extends to coffee mugs and baseball caps — premiums distributed to Insight employees. Adjacent copy reads: "Put them together. Juggle fewer bills"; or, "Put them together. Save money."
Insight's direct-mail pieces have used such language as: "Juggle fewer bills. One simple bill"; or "One simple phone call. Save money every month."
Additional copy notes that Insight Digital offers "over 180 channels," an on-screen program guide, video-on-demand and LocalSource, the MSO's interactive community guide.
And ads that trumpet Insight's cable-modem product speak of Web access that's both faster than digital subscriber line and "always connected [with] no busy signals."
Different messages support Insight's digital telephony service, provided by AT&T Corp.
Ramping up VOD
In the future, Insight will use its muscle to market video-on-demand. Efforts will emphasize "more movies, more kids' content and Mag Rack as added value for digital customers," Halling said.
Insight launched Mag Rack — Rainbow Media Corp.'s 40-hour suite of magazine-like niche on-demand content — to 214,000 VOD-enabled homes in Louisville, Lexington, Columbus, Rockford, Ill., and a half-dozen other markets in late September. Insight was the first MSO aside from Rainbow parent Cablevision Systems Corp. to launch the content, which focuses on interests that range from bird watching to religion.
However, there have been some bumps along Insight's VOD road. In June, Diva Systems Corp. — the MSO's platform vendor — declared Chapter 11 bankruptcy, selling most of its assets to Gemstar-TV Guide International Inc. and shuttering its VOD-content business.
That forced the MSO to look to SeaChange International Inc. for VOD equipment and to TVN Entertainment Corp. for content — a switch that will delay more concentrated marketing support for another month or two.
Insight's first subscription VOD foray will come at the end of 2003, with the launch of Home Box Office's HBO On Demand. Offerings from basic-cable programmers — most notably ESPN, Discovery Networks U.S. and Home & Garden Television — will follow.
By the opening quarter of 2004, these VOD services and high-definition television will be available in all of Insight's markets, except Peoria and Springfield, Ill. And personal video recorders will follow "down the road," Euler Halling said.
Insight will also upgrade its interactive-TV offerings, adding more sophisticated video games. Last March, Insight acquired the 50 percent of SourceSuite LLC that it didn't already own. SourceSuite operates the MSO's interactive digital platform.
ITV services have already benefited from heavy promotion, said Euler Halling. The MSO's marketing means have included cross-channel spots, segmented direct mailings and a "digital bus" that offers demonstrations, she said.
Euler Halling declined to disclose the budget behind Insight's marketing efforts.
The financial success from such services can be considerable. Last year, chief operating officer Kim Kelly predicted that by 2005, Insight's average revenue-per-subscriber could more than double, to $87.25 per month.
As about 93 percent of Insight customers opt for a single bill for cable, phone and Internet access, Kelly projected that the MSO's telephony and high-speed data penetration rates would hit 30 percent over the next five years, while digital-cable penetration would reach 55 percent.