CCUR mentioned prominently in article on Cox Communications
Cox turns up heat on US West
By Max Jarman
The Arizona Republic
June 12, 2000
Cox Communications has an arsenal of new products and services in the pipeline for its war with US West for dominance of the Phoenix market.
The new products - video-on-demand, TV on demand and interactive television - also could help stem customers' migration to satellite networks such as Direct TV and Dish Network.
The new products also offer the Atlanta company a wealth of new revenue sources.
With more than 700,000 cable television customers, Phoenix is Cox's largest market. It also may be the most competitive arena and the front line in its crusade to deliver bundled television, telephone and Internet services.
This is one of the few markets nationwide where two major companies are offering all three services, albeit not to everyone. Both companies are scrambling to complete equipment upgrades that will enable them to offer all of the products Valleywide.
Cox plans to begin testing its long-awaited video-on-demand service in Phoenix in August; a broader rollout could come early next year. The service will allow Cox cable subscribers to rent on-demand movies, concert videos, sports programs and other content from a video library being developed by Cox.
Another product, called iTV, is being tested in San Diego. The service eventually will be rolled out in Phoenix and allows customers to access the Internet and send and receive e-mail via their televisions.
A third new product, called TV on demand, is being tested in Las Vegas and also will eventually be available in Phoenix. The product, developed with TiVo Inc., will allow Cox subscribers to access pre-broadcast television programs as well as pause, fast-forward and rewind real-time television programming.
Jim Robbins, Cox's president and chief executive officer, told telecommunications analysts at a recent meeting in San Diego that the company was disturbed by the loss of cable customers to USWest's VDSL cable television service. USWest won't say how many of Cox's video customers it has taken, but it is thought to be 30,000 to 50,000, similar to the number of telephone customers Cox has taken away from USWest.
Robbins said the new products, particularly on-demand video, would give the company a competitive edge in the market.
For video-on-demand, Cox will partner with Concurrent Computer Corp. of Atlanta which is working with Time Warner in Tampa Bay, Fla., Comcast in California and Time Warner Oceanic Cable in Hawaii to launch similar service.
Time Warner launched a video-on-demand service in Orlando in the early 1990s. But the technology was cumbersome and the equipment expensive. Now, with equipment costs coming down, industry observers believe the product can be successful.
Companies like USWest and Cox believe that providing a bundle of telephone, television and Internet services will make customers less likely to change providers.
Once the customer is locked in, Cox's strategy is to increase their average monthly bill with add-on products and services.
Video-on-demand, for example, will bring in an estimated $3.50 per rental, and as much as $9.95 for adult movies and $1.95 for older releases. TV on demand will charge 25 cents to $2 per program and from $5 to $10 per month for the ability to pause, reverse and fast-forward real-time TV programming.
Interactive e-mail would add $3 to the average cable bill; Web browsing an additional $5 to $15. The company also sees opportunities to sell advertising at the beginning of its video-on-demand products and Internet TV screens.
"The opportunity to generate $10 to $25 per month in new revenue is a real possibility," Robbins said.
The video-on-demand trials in Phoenix will start with 50 employees and later expand to 2,000 customers. Early next year, it should be available to all of Cox's approximately 700,000 Phoenix area cable customers, spokesman Alex Horwitz said. The interactive TV product also should be available to Arizona customers early next year.
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Reach the reporter at Max.Jarman@ArizonaRepublic.com or (602) 444-7351.
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