Marketers Must Balance New with Core

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Chicago -- Today's cable marketers face a dramatic shift in
strategy as they move from a monopolistic market to a competitive market.

And while the industry must promote its "new and
improved" services -- like digital television, cable modems and telephony -- keeping
its focus on core video services is more important than ever.

"Better than 80 percent of revenue streams are still
delivered by core video services," Cable and Telecommunications Association for
Marketing chairman Jim O'Brien said, speaking at a cable-marketing panel at the National
Show last Sunday (June 13).

O'Brien urged operators to use targeted promotional tactics
as part of their core marketing strategies. "Any senior-management team that doesn't
include target marketing in their core strategy isn't going to make it in a competitive
environment," he said.

Operators have "phenomenal data on our customers and
their usage behavior," AT&T Broadband & Internet Services senior vice
president of marketing Doug Seserman said. "All along, we had the [market]
segmentation mode, but we weren't using it."

Seserman recommended that cable marketers make friends with
engineers and billing specialists at their companies in order to be able to tailor their
messages to their customers.

"The bandwidth restraints are not just in the ground
-- they're in your head," Seserman said. "Anyone who says they understand it all
is lying because it's all changing so quickly."

One marketing strategy likely to change quickly over the
next few years is the addition of retail as a primary distribution channel.

"In the cable industry, we are extremely immature in
the development of our distribution channels," MediaOne Group Inc. senior vice
president of video Judi Allen said. "As we move forward in a competitive environment,
we can't afford to be so untargeted where our sales are done."

Allen added that the bulk of direct-broadcast satellite
system sales are done in consumer-electronics stores, and "in most cases, we're not
even there to compete toe-to-toe."

Operators must concentrate both on signing new subscribers
and retaining existing customers in order to generate enough cash flow to fund entry into
newer products and services, panelists said.

"Acquisition marketing is like trying to walk up an
escalator going down," Seserman said. "It's hard, but if you stop trying to walk
up, you go down in a real hurry."