Ops Mark Progress in Digital Deployments

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Baltimore -- Cable operators gave themselves a pat on the
back when discussing digital-cable deployment last week, but they acknowledged that new
marketing and programming tactics would need to be implemented to hit long-term
digital-penetration goals.

The marketing executives spoke at East Coast Cable '99
here last Tuesday during an afternoon panel sponsored by the Cable &
Telecommunications Association for Marketing.

In its initial phase of launching digital, Comcast
Corp.'s Comcast Cable Communications created a movie-centric product to help retain
its premium subscribers, vice president of marketing for digital Andy Addis said.

And to keep customers from migrating to direct-broadcast
satellite, the MSO is beefing up its sports- and ethnic-programming lineups in a number of
systems.

In research, Comcast found that about one-half of
subscribers leaving for DBS were doing so for more sports or foreign-language programming,
and those two reasons were split about 50-50, Addis said.

Comcast is running tests in three markets to see whether
digital subscribers will pay an additional fee for a digital-basic tier. Addis said that
in the future, interactive applications such as video-on-demand will also help to drive
digital deployment.

The MSO announced that it hit 100,000 digital-cable
subscribers this past February. Comcast Cable president Stephen Burke said the company
would likely reach 400,000 to 500,000 digital customers by the end of the year.

AT&T Broadband & Internet Services has acquired 1.6
million digital customers to date, senior vice president of marketing Doug Seserman said,
adding that 30 percent of new cable customers sign up for digital.

Digital gave AT&T Broadband "the best year in
premium we've ever had," Seserman said.

Because AT&T Broadband's analog-programming lineup
was not as robust as those of other MSOs on the panel, it stresses more programming in
general -- and not just more movies -- when marketing digital.

"One of the key points in positioning digital is: What
is your frame of reference?" Seserman said. "Is it analog cable, or is it
DBS?"

Insight Communications Co. Inc. senior vice president of
marketing Pam Euler-Halling warned operators that digital deployments take an incredible
amount of work, and that it's important not to overstress the local operation.

"But don't wait" to deploy digital, she
added, "because there are plenty of competitors out there waiting to take your
customers."

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