Marketing Strategy Aids Cox Cable

By Bob Wallace (xchange Magazine)

Cable giant Cox Communications Inc. on Tuesday said its 9-month-old program of marketing to non-video subscribers has boosted customer acquisition by 3 percent and is accelerating growth of customers who only purchase telephone and/or Internet services.

Cox said it has more than 432,000 non-video subscribers; a figure that grew by 21 percent over the same period a year ago. A huge chunk of that growth is attributed to the nascent beyond video marketing plan.

"Our world is changing, and we needed to change our marketing strategies too," said Patrick Esser, president. "Our 'line into every home' strategy maximizes our return on the $16 billion investment we've made in our network since 1996. We're pursuing business out of every home passed, even if that home is only interested in telephone service, or perhaps values their connection to the Internet more highly than a multi-channel video service."

The value of the Cox numbers lies in the eye of the beholder. “A cable company landing voice customers without selling video can be looked at as a coup,” said Teresa Mastrangelo, principal analyst for Broadbandtrends.com “We’re beginning to see a disassociation with phone service and telcos, where customers want quality service and features but don’t care who provides it.”

The Cox marketing program may not necessarily quickly contribute to the provider’s higher stakes bundling business efforts, said Mastrangelo. “I would think the primary goal would be to get folks to buy at least two services.”

Supporting the growth in non-video subscribers was a strong quarter for the company’s high speed internet and digital telephone services.

The company now has more than 3.2 million broadband subscribers, an 18 percent increase over the same period a year ago. With telephone service now ubiquitous in its availability across Cox, the company saw subscriptions rise to 1.9 million, an increase of 24 percent.

Even with the emphasis on new services, Cox says basic video subscriptions grew by 1.6 percent to 5.4 million and digital cable subscriptions grew by 14 percent to 2.7 million. Spurred by features such as high definition, DVR and on demand services, digital-to-basic penetration now exceeds 50 percent.

Cox said the highlight of its quarter was 2.8 percent growth in residential customers to more than 5.8 million. Penetration of total customer relationships to homes passed stands at more than 63 percent.

Cox said it ended the quarter with more than 3.3 million bundled customers, representing 57 percent of total residential customers and 16 percent growth over the same period a year ago.

About 24 percent of customers elect to take all three services from Cox. Bundled sell-in continues to improve, with 18 percent of new customers opting for the triple play of video, voice and data. In Cox's most mature bundled markets, triple play sell-in has exceeded 30 percent of new subscribers.

 

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