Operators Vie for Share of Holiday Spoils

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For years, cable's holiday marketing efforts were synonymous with Toys for Tots campaigns, in which new subscribers were rewarded with installation discounts in exchange for donating a gift to a local child in need.

Such promotions haven't disappeared, but the introduction of retail partnerships and new technologies has led to more aggressive cable promotions during the fourth-quarter holidays.

Cable modems received a big push from operators this past year. According to some cable executives, they saw strong demand from consumers as well.

Val Green, Cablevision Systems Corp.'s vice president of product strategy for Optimum Online, admitted that she was initially a little concerned about holiday sales numbers, given the state of the economy and the general uncertainty about recent events.

By last week, those sales fears were put to rest.

"Our sales and connect rates during the last few weeks of the year were phenomenal," Green said.

Green credited the return of the Optimum Online Gift Box sold through The Wiz, the company's retail chain in metropolitan New York City, with driving sales.

"We call it, affectionately, 'Internet in a box,' " Green said.

For $389.95, shoppers received a cable modem, network interface card, self-installation kit and a gift certificate good toward one year of high-speed Internet access. Cablevision created the promotion a year earlier, and brought it out for Valentine's Day and Father's Day as well.

"We sold 10 times the amount this [holiday] as last year," Green said. "We exceeded our forecast this year by 82 percent. They flew off the sales floor. It's amazing."

In St. Louis, Charter Communications Inc. also reprised a successful fourth-quarter cable-modem promotion. New subscribers could sign up for a full year of Charter Pipeline's Silver package — which offers a higher access speed than the company's Bronze package — for $29.95, or the price of the Bronze service. Charter also waives the monthly modem rental fee for the first year.

"It was a home run," said Charter central region vice president of sales and marketing Mindy Jeffries. "What it tells us is our customers are very savvy. They are savvy enough about speed that we can put an offer out there with a higher speed for a lower price, and they get it."

The discounted Silver package was marketed through several channels, including direct sales, telemarketing, direct mail and via retail demonstrations at three local CompUSA stores. The retail demonstrations provided Charter with feedback that showed some consumers were actually purchasing the cable-modem service as a gift, Jeffries said.

Not all holiday promotions focused solely on cable modems. In many of its markets, Charter tied its December cable-acquisition campaigns to the launch of National Geographic Channel, said Charter vice president of marketing Rick Lang.

Some systems gave the promotion a holiday spin, such as "Here's a new present on channel 35," he added.

In Los Angeles, Time Warner Cable last month broke a campaign that offered "400 reasons to stay home this holiday" — a nod to the stronger 400-channel digital-cable programming lineup.

Cox Communications Inc. sold its "digital cable in a box" packages through dozens of Circuit City Stores Inc. locations throughout the country.

Perhaps encouraged by the number of frenzied shoppers driven to local department stores for special discount days, Comcast Corp.'s Philadelphia region brought back its amusing "Dollar Store" television ads, which promoted a first month of cable for only $1.

Also during the holidays, Comcast pitched its high-speed cable-modem service by offering a check for $100 to qualified new subscribers.

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