Las Vegas Live Wire

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When you mention the name “Las Vegas,” most people think casinos, gambling, glitz, buffets or conventions. But for an increasing number of families, the city’s name evokes thoughts of home.

The southern Nevada town is the fastest growing community in the country, reporting population increases between 4% and 8.7% each of the last five years. New home permits are up 108% in 2004 alone.

<p>Cox Las Vegas</p><p>As of July 31</p>

Homes Passed:

700,000

Basic Customers:

405,000

Clark County Pop. (2003):

1,600,000

Population Growth (2003):

4%

In all that growth, the local cable operator, Cox Communications Inc., sees potential — but also risk.

According to Fritz Hoehne, vice president of sales and marketing, consumers are most likely to give up cable for direct-broadcast satellite when they move. To counter that possibility, the system focuses on all the ways it can impress consumers before they have a chance to opt for a competitor’s services.

With all the new construction, “You just don’t hear about a new home where you can’t get cable,” Hoehne says. The system’s sales team has developed relationships with all the active builders, so plans for fiber installation are included in a house’s design, he explains.

But since construction can’t keep up with the influx of new residents, the 5,000 to 7,000 people who relocate to the city each month spend, on average, six months in an apartment. But few of the 300 major apartment complexes are committed to Cox through exclusive contracts, Hoehne says. So Cox has an account manager contacting multiple dwelling units to ensure that rental agents and apartment managers are promoting Cox to renters, and urging those residents to stay with the MSO when they move.

Cox declined to give recent subscriber-growth rates.

Cox markets HDTV for $9.95 for the converter rental. Free programming includes PBS, ABC, CBS, NBC, Home Box Office, Cinemax, Starz!, Showtime, ESPN and InDemand 1 and 2. Discovery HD Theater is $5 extra.

“High definition is probably the most effective win-back tool we have, so it’s very high on our list,” Hoehne says.

Las Vegas was the first Cox market to offer HD, launching the service in July 2002. “We like to do as many new things as we can here,” he explains. “We had our hands up.”

The city’s convention business provided impetus for the launch. Many exhibitors for the huge annual Consumer Electronics Show contacted the cable system to check on the availability of HD content they could use to sell their hardware, Hoehne says. The operator has leveraged those vendor contacts as part of its day-to-day strategy for new-product penetration: retail sales.

“When we started to drive our presence into retail stores, we were sort of a red-headed step child,” Hoehne says, noting that DBS services have always relied on retail sales and were already in the consumer electronics stores Cox was then just entering.

Cox, as a company, promotes retail partnerships, and local systems share best practices, Hoehne notes. In Las Vegas, Cox has displays — including self-service electronic kiosks — in 46 retail stores, including Best Buy, Circuit City and RC Willey.

“It definitely helps to have the product in the store,” says Linda Walters, a buyer for the Salt Lake City-based RC Willey chain. Many consumers come from a home where they are viewing an older, analog set. When contemplating the purchase of a TV that costs $2,000 or more, it helps if consumers see exactly what they will get when they get the set home, she notes. Walters stresses that the stores sell both cable and DBS connectivity.

That’s where those pre-existing relationships with vendors come in handy, Hoehne says. Cox has excellent relationships with companies such as Pioneer North America Inc. and Samsung Corp.

“The retail representatives on the floor are not Cox employees, so if you are working with consumer-electronics manufacturers, that helps bypass a weak link,” Hoehne says.

But Cox will be experimenting in August with a “striker” program, placing workers paid by Cox in some of the retailers on the weekend.

The electronic kiosks are not just for HD sign-ups. For instance, 12% of the system’s high-speed data sign-ups come through retail locations, Hoehne notes.

Though the core of the business is residential, that does not mean the glitzy Strip does not contribute to Cox bottom line. Hospitality Network, another Cox company, provides pay-per-view service to 100,000 hotel rooms, as well as PPV broadband access. HD will come to the Strip in two properties under construction: Mandalay Bay’s The Hotel will have HD in its rooms, as will a resort under construction by Steve Wynn.

But the casinos’ greatest assets, for Cox, may be their employees. By experiencing the advanced services at work, Cox is betting it can sell those products in workers’ homes.

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