Nat Geo Net Backs Qwest's Campaign

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Qwest Communications International Inc. recently enlisted Fox Cable Networks Group's help in mounting a fall marketing campaign to introduce National Geographic Channel in Phoenix.

In this latest struggle between David and Goliath, overbuilder Qwest asked Fox Cable for the marketing slingshot it needed to oppose Cox Communications Inc. Incumbent Cox dominates the Phoenix cable landscape — and holds a 25-percent interest in Discovery Networks U.S., parent of Nat Geo's well-entrenched rival, Discovery Channel.

Cox reaches nearly 75 percent of the roughly 855,000 cable homes in the Phoenix DMA. The rest are split among six different cable operators, notably the 40,000-subscriber Qwest video system; News-Press Gazette's system, with 75,000 subscribers; and Cable One Inc.'s 64,000-home operation.

The campaign kicked off on Sept. 17 — just days after the terrorist attacks in New York and Washington — because "it was impossible to delay," said Fox Cable Networks Group executive vice president of affiliate sales and marketing Lindsay Gardner. Outdoor billboards and other media had been bought well in advance, he said.

The overbuilder was among the first to sign up for the fledgling network "as a way to differentiate itself from the competition in the marketplace, namely Cox," said Gardner. "Qwest is overshadowed by Cox 15 to 1, since Qwest reaches just 6 percent of Cox's Phoenix homes."

One factor working in Qwest's favor is the disproportionately high number of National Geographic Society members in Phoenix. It also boasts an older, upscale population likely to be most familiar with National Geographic
magazine — and perhaps likely to be interested in the network's offerings, he said.

Qwest's local push also includes radio and television commercials and direct mail sent to consumers, magazine subscribers, educators and other Phonenix residents on the society's voluminous mailing list.

The campaign — designed to "tap into people's affection for the National Geographic Channel and call attention to its availability as a basic service" — has an overall dollar value somewhere between $500,000 and $1 million, Gardner said. Aside from free use of the society's mailing list, Qwest is funding the effort itself.

A Cox spokeswoman said last week that the operator is aware of the Qwest campaign, but is not responding directly to it. Rather, Cox's own local marketing efforts are focused on calling attention to the exclusive programming it offers subscribers in the DMA — including Phoenix Suns National Basketball Association games and the Arizona News Channel, she said.

Asked if Discovery might work with Cox to mount a counteroffensive in Phoenix, a network spokeswoman said, "Discovery works with all of its operators, but not against other distributors." Qwest also carries Discovery Channel, she said.

Qwest isn't the only operator using Nat Geo carriage to market against competitors. In some cases "[incumbent] operators are using us versus overbuilders that don't carry National Geographic," Gardner said.

"DirecTV Inc. has expressed an interest in targeting cable markets that don't carry Nat Geo," Gardner said. The satellite provider is allocating "several million dollars" to its marketing campaign, Gardner said, noting that "it's up to [DirecTV] to pick the markets."

Adelphia Communications Corp. has already spent more than $1 million to promote the fledgling network in Los Angeles alone, added Gardner. AT&T Broadband has funneled $1 million into Nat Geo promotion nationally.

"Charter Communications is gearing up with several million dollars in various markets," he added.

Although Nat Geo may lack a significant presence in Phoenix at this stage, it's bulking up elsewhere. Fox Cable executives cited Paul Kagan Associates data indicating that Discovery Channel's penetration jumped from 4.2-million U.S. cable or satellite homes in its first year to 27.5 million in its third year and 38 million in its fourth.

As the first major rival to Discovery, Nat Geo has secured carriage in 15 million homes over its first nine months, FCNG said. Officials with the programmer said Nat Geo now has commitments that would add more than 35 million homes over the next five years.

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