Ops Market to Moving Targets

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With roughly 20 percent of the U.S. population moving each
year, a certain amount of subscriber turnover is inevitable.

But savvy cable and direct-broadcast satellite marketers
believe successful target marketing includes tracking their customers as they move, which
is when they're most likely to re-examine all of their residential services, including
television, telephone and Internet access.

The days when cable operators could count on being the
first and last stop for every neighborhood newcomer seeking subscription-television
services are gone.

After some false starts, cable operators are looking to
strengthen their local and national move programs, with long-term hopes of creating an
industrywide program designed to keep cable customers out of the clutches of their
competitors.

According to The Yankee Group analyst Bruce Leichtman,
industrywide move programs would help cable for two reasons: They would help to keep cable
competitive, and they would bring new residents to the attention of local cable systems
earlier in the moving process.

"Every day earlier [that you can sign a subscriber] is
another dollar," he added.

DBS companies DirecTV Inc. and EchoStar Communications
Corp. have created move programs of their own in the hopes that once a dish is installed
at a home, that house will remain satellite-ready for each successive resident.

And DirecTV's marketing partnerships with regional
telephone companies help to ensure that movers hear a DBS pitch as soon as they call to
sign up for phone service from their local telecommunications incumbents.

MSOs with strong residential telephone offers will benefit
from the ability to market their complete broadband packages early to new residents in
their service territories.

"People can wait to get television," MediaOne
Group Inc. senior vice president of video Judi Allen said, but they're more likely to want
telephone service as soon as they move in.

In addition to television and telephone services, broadband
companies that sign new customers early also have the first shot at marketing
high-speed-data services, whether it's high-speed cable modems or digital subscriber
lines.

"We want to have an AT&T move program across all
platforms," AT&T Broadband & Internet Services senior vice president of
marketing Doug Seserman said.

When long-distance subscribers call AT&T to transfer
their phone service, the goal is for them to also be able to talk with a customer-service
representative to order cable television, local phone and high-speed Internet services
where available.

Seserman said he supports the idea of an industrywide move
program if it is well executed, although past attempts have met with less-than-desired
results.

A few years back, Tele-Communications Inc., InterMedia
Partners and several other MSOs worked with the U.S. Postal Service to gather
change-of-address information so they could target new residents with
"1-800-CABLE-ME" offers.

"After a couple of years, we dropped it, because the
results weren't that good," InterMedia executive director of marketing Donna Young
said.

Young added that she would like to see a reciprocal program
among MSOs where they could refer subscriber change-of-address information to each other.
"Different billing systems make this harder," she said, explaining why such a
program hadn't been implemented to date.

Allen said it's crucial that any industrywide move program
includes a concrete way of making sure every lead is followed through.

"I'd be in favor of cooperating on a way to forward
addresses between MSOs," she added, "but traditionally, it was just too hard to
get everybody on board. And if everybody isn't on board, you would have holes in the
program."

An industrywide program that offers to transfer a cable
customer's account but then fails to do so could lead would-be cable customers to look
elsewhere. "I don't want to lose any customers," Allen said.

"A solid move program could make a world of difference
in bringing churn down," Comcast Cable Communications executive vice president of
sales and marketing and customer service Dave Watson said.

In highly clustered markets, it's effective for an MSO to
deploy its own local move programs, he said, adding, "It would be terrific if there
are ways of following customers wherever they go."

Marketing executives said they're not yet sure whether
there should be an industrywide clearinghouse for cable customers who wish to transfer
their service to an operator in another location, or whether MSOs should pass that
information on directly to each other.

One challenge is that customer-service databases differ not
only among different MSOs, but often within an MSO, especially in the age of
consolidation.

And customers who move from one town to another will almost
certainly be confronted with different programming packages and pricing, even if they stay
with the same MSO.

That's also true for DBS subscribers who move, because
although EchoStar and DirecTV have national programming packages, the wild card would be
whether customers can subscribe to local- or distant-network-signal packages, depending on
their proximity to broadcast stations.

Both EchoStar and DirecTV offer their customers incentives
to leave their satellite dishes in place when they move so the DBS companies can try to
sign up new residents as they move into those houses.

EchoStar has promoted its "DISHMover" program on
air and on its Web site, asking customers who move to leave their dishes but take their
receivers with them. EchoStar will ship a free dish to the new address, plus install the
dish at a discount or ship a free self-install kit if requested.

DBS subscribers can also sell their equipment outright when
they sell their homes in the event that they won't have a clear line-of-sight to a
satellite after they move.

Cox Communications Inc. is also exploring discounted or
free installation to movers in its new VIP-subscriber loyalty program, according to
director of response and database marketing Margaret Ross. "That adds up to a real
nice savings if you're installing multiple boxes," she said.

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