About cable TV replacing dentistry ..... 
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 About cable TV replacing dentistry .....

Comcast is willing to spend $4,000 per subscriber to acquire these accounts
..... Today's paper reveals they are targeting $100 additional per month for
expanded services. Can cable viewers resist? Probably not.


Tuesday, July 10, 2001 Go to:

Turning digital services to gold
Consumers' upgrades to basic cable can add $100 or more a month to bills.
Related Links

Graphic | What Coaxial Can Offer

By Reid Kanaley
Millions of additional subscribers represent the brass ring in Comcast
Corp.'s bid to take over AT&T Corp.'s cable-television business. But
newfangled digital services offered by both companies, and the revenue they
generate, turn the ring to gold.
Video on demand, high-speed Internet access via cable modems,
interactive-television programs, and telephone service - all coming into
homes through the cable company's standard coaxial wire - are among the
offerings that cable providers hope customers will "layer" onto their
subscriptions as they become more widely available.
Each upgrade adds charges to the consumer's bill - charges that can add $100
or more per month and go straight to the cable provider's bottom line.
"It means you can get a lot more revenue per subscriber," said Marc Smith,
spokesman for the National Cable & Telecommunications Association.
The trade group, formerly called the National Cable Television Association,
changed its name in May to reflect the additional services being offered by
cable-TV companies.
For example, the cable-modem service now bought by 1.3 million AT&T
subscribers (Comcast has 542,000 cable-modem subscribers) is generating $58
million a month on top of basic-cable revenue, according to the Yankee Group
market research firm.
AT&T cable systems also have the lion's share of the nation's cable-based
telephone subscribers - 500,000 of a total 1.3 million households that are
getting telephone service through the same wire they use to watch TV.
"The bulk of the revenues come from [basic] multichannel television," Ryan
Jones, media and entertainment analyst at the Yankee Group, said yesterday.
"But the technology that these companies have been trying to layer on . . .
has been digital cable."
Subscribers have been signing up for digital cable in droves, primarily for
the extra 20 or 30 channels that type of service typically makes available,
he said. About 20 percent of Comcast and AT&T subscribers now pay the extra
$10 or so per month for digital cable.
But that is just the first layer of new revenue for the cable company, Jones
"The neat thing about digital cable is that it requires a set-top box, and
once you get that set-top box into your subscriber's household, it allows
you to create a new world of services" to generate additional revenue, he
Video on demand, for example, allows subscribers to rent a movie through the
cable box for about $4. The movie plays over the cable system at any time
desired by the purchaser.
Jones said Comcast had been particularly aggressive in testing and offering
video on demand, which is proving "really, really compelling for consumers
of all types." The Yankee Group projects that video on demand will generate
500 million movie rentals in 2005.
Further down the road is the widespread offering of interactive television -
click-and-buy advertising, play-along game shows, and on-screen Web pages -
offered, again, at a premium to the basic cable rate.
Of equal importance to cable operators is high-speed Internet service, or
so-called broadband access through cable modems. At basic rates of $40 to
$50 per month, the cash-flow potential is tremendous, Jones said.
Some in the industry are now counting not subscribers but
"revenue-generating units," or RGUs, Smith, of the cable association, said.
Having a subscriber who pays for basic cable and adds digital cable,
cable-telephone service and high-speed Net access "is like having four
subscribers in one," Smith said.
"The question then becomes: If an acquisition were to occur, how fast can
Comcast ramp AT&T subscribers onto these new services?" Jones said.
The rewards for Comcast could be huge if it were marketing to the 22 million
cable subscribers across the country that the combined company would have,
said Patti Reali, industry analyst for the Dataquest market research firm.
"Any new, any advanced services going forward, they'll be able to sell more
efficiently over a wider base," Reali said.

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Sat, 27 Dec 2003 18:33:56 GMT
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