Marketing Digital Requires New Tactics, Ops Say

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Chicago -- Executives at four MSOs -- with digital-cable
experience ranging from the planning stages to one-and-a-half years past market launch --
said marketing digital cable requires new challenges that are not necessarily found with
traditional analog-video services.

While he admitted that it may be an oversimplification,
MediaOne Group Inc. vice president of video-product marketing Steve Bouchard said
competition for analog is broadcast television, while digital is a strategy designed to
keep customers from going to direct-broadcast satellite.

Panelists said operators should promote both quantity, as
in number of channels, and quality -- better picture and sound.

But Bouchard warned against playing up the "digital is
better-quality TV" card because even in a digital-cable environment, two-thirds of a
customer's channels might still be delivered in analog.

Bresnan Communications said more of its customers want new
basic channels than the number who expressed interest in additional premium-multiplex
channels or beefed-up pay-per-view offerings.

According to vice president of marketing Joe Lawson, 75
percent of that MSO's subscribers are basic-only customers. Lawson said customers in
Bresnan's smaller Midwestern markets tend to be more conservative about premium channels
than those in urban markets.

Cablevision Systems Corp. has not yet launched its first
digital-cable markets, but it plans to do so next year.

Senior vice president of consumer products Scott Davis said
the MSO's goal is to ultimately have consistent pricing and packaging for its digital
products across all systems in its New York-area cluster in order to take advantage of
advertising and marketing efficiencies.

Davis added that Cablevision plans to market its
digital-cable service through its consumer-electronics retail chain, The Wiz.

At Cox Communications Inc., which launched its first
digital-cable market in late 1997, "We have moved from positioning digital cable as a
premium to a combined analog and digital package with price points similar to DBS,"
vice president of marketing Virginia Gray said.

Gray added that it's important to keep the packaging
simple. Cox offers two digital tiers in the hopes that customers who are inclined to churn
for cost reasons will downgrade first, rather than disconnecting digital altogether.

Creating simplified packaging makes it easier for
customer-service representatives to sell, and not just for consumers to buy, she said.

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