Comcast Cable Communications Inc. revamped its digital-cable packaging last week, adding 33 new channels, including its first digital-basic services.
The move is part of the company's strategy to increase digital penetration beyond pay households by attracting customers who prefer more robust basic packages, rather than premium channels.
When Comcast launched its first digital package two years ago, the $9.95-per-month fee gave customers access to additional multiplex and pay-per-view movie feeds, as well as an interactive programming guide and digital-music channels.
"We did a lot of research around this," vice president of digital marketing Andy Addis said. "Customers want more [programming], and they are willing to pay more for it. We're confident that we can upgrade a lot of basics who have to date resisted digital. We now have a package we can present to the 60 percent of our subscribers who are basic-only."
The upgrades are also designed to help retain the digital subscribers Comcast already has.
"As with everybody in the industry, churn on digital has been somewhere between normal churn and pay churn, which is higher than we'd want it to be," Addis said.
When sold as a tier, the new "Comcast Digital Plus" package sells for $14.95 per month and includes such networks as Discovery Science Channel, Discovery Kids, Noggin and MTV 2, as well as East and West Coast feeds of the Flix movie service.
Also new to Comcast's digital-cable lineup are 13 additional Starz Encore Media Group LLC thematic channels, two feeds of Sundance Channel, Weatherscan Local from The Weather Channel, Nickelodeon Games and Sports, Nick Too, VH1 Classic, VH1 Soul, VH1 Country, MTVX (rock), MTVS (Spanish), BBC America, Discovery Wings Channel, Discovery Civilization Channel and Discovery Home & Leisure Channel.
But Comcast plans to sell digital to first-time customers as part of four larger, all-inclusive packages with consistent names across the country: "Comcast Digital Classic," "Digital Silver," "Digital Gold" and "Digital Platinum." A 180-channel package will sell for roughly $49.95 per month, depending on the system.
At the top end, the MSO offers as many as 250 channels, including 45 premium-movie channels and 40 digital-audio channels.
One-pay digital packages will be called Comcast Digital Silver, two-pay called Gold and three-pay Platinum. Over time, the MSO plans to eliminate all analog pay packages. Current analog-pay customers will be grandfathered, Addis said, although at some point Comcast will upgrade those analog pay customers to digital.
Addis said the color-coded package nomenclature was not in response to DirecTV Inc., which had previously marketed "Silver," "Gold" and "Platinum" packages under its "Total Choice" trademark. (Platinum is the only one of the three names that has survived.)
In fact, some at Comcast argued against using the Silver, Gold and Platinum names because its competitor had already used them. But research found that there were no other names that spoke to the "escalating value" of the packages as quickly and simply, according to Addis.
Fellow MSO AT & T Broadband has acknowledged eyeing a similar naming system for its upcoming nationwide digital-branding strategy, internally dubbed "Project One."
A single, cross-MSO branding strategy won't necessarily make digital-cable packages easier to sell, Addis said, because the channel lineups and even the numbers of channels available are likely to vary greatly from one operator to the next.
But a single naming system specific to Comcast would help to bring some consistency to the decentralized MSO, which, in the past, had used a variety of brands to promote digital at the system level.
"There are some marketing efficiencies to be gained," Addis said. "As we leverage the Web and move toward retail, it makes sense to have a consistent naming scheme."
Additional digital tiers that include foreign-language channels may vary from market to market, Addis noted. Roughly 20 percent of the Comcast footprint offers some kind of foreign-language programming, he added.
To help promote the new digital packages, Comcast has started one of its most comprehensive training programs in years, senior director of acquisition marketing Jane Bulman said.
Comcast Cable president Steve Burke held conference calls with each of the systems last month to push the new sales initiative, in which customer-service representatives are urged to "Go for the Digital Gold."
Comcast started testing the digital-basic packages last fall in select areas of central New Jersey, Baltimore and Chesterfield County, Va., Bulman said.
The new digital packages will be launched "everywhere we'll launch digital," Addis said, which will be about 50 percent of Comcast's total subscriber footprint by mid-September and which is expected to reach 60 percent by the end of the year.
"As we look to the future, it's all about digital" and the ability to sell new services on top of that, Bulman said.
While there will always be customers who are content with analog, the move toward digital cable will be "like the move from rotary phones to touch-tone phones," she said.
The MSO will initially use direct mail, outbound telemarketing and cross-channel spots to help sell the new digital packages.
Comcast executives had earlier projected that they would have 1.25 million digital subscribers by the end of the year. Addis predicted that there could be some upside to that number from the new digital-packaging and marketing campaigns.
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