While the rest of the industry scrambles to move
subscribers onto more expensive digital and enhanced tiers, Englewood, Colo.-based MSO
Jones Intercable Inc. sees opportunity in lower-tier services.
Last February, Jones rebranded its entire channel lineup
under the name "Jones Impact," and it began offering four different levels of
service, including two targeted toward people who don't have cable:
"Local Impact," which includes
local-broadcast channels, a guide channel and a shopping channel, specifically for
low-income families and the elderly, priced between $10 and $12 per month.
"Real Impact," which includes Local Impact
service, all of the cable-news channels, The History Channel, Knowledge TV, The Learning
Channel and Discovery Channel, for between $18 and $19 per month. Real Impact is targeted
toward homes with families and toward the "elites" -- people who claim that they
aren't television viewers, but who would watch news, weather and educational
stations.
The other Impact service tiers are "Full Impact,"
the company's expanded offering, and "Digital Impact," Jones' digital
tier.
"With all of the homes that we pass that are not cable
homes, 64 percent will come to cable for less, not more," said Cynthia Winning, vice
president of marketing for Jones. "[With Real Impact], we have been able to migrate
the 'nevers' to our business."
Aside from bringing subscribers who have never had cable
into the fold, the lower tiers help to reduce churn for the entire system, and they have
proven to be extremely profitable.
"This is a way to cash-infuse the bottom end of the
business," Winning said. "The margins are wonderful."
Offering the downgraded tiers has had little impact on more
expensive product offerings.
"We have found that 75 percent of the households in
the Real Impact level are in the 45 year-old and up range, and one-half are new to
cable," Winning said. "Our classic cable customers are up in the Full Impact
level, and they are staying there. There is little downward movement."
The Local and Real Impact tiers must be strictly managed,
Winning added. Neither service is outwardly marketed; Jones identifies the appropriate
customers, and they receive direct-mail materials or telemarketing calls.
So far, Local and Real Impact are available to about 45
percent of Jones' customers. However, the company has stopped deploying the services
because of its pending acquisition by Comcast Corp.
"It will be up to Comcast if they want to continue
with it," Winning said.
