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HBO Boards the Internet Express in Boston

AT&T Broadband's Boston division last week gave the thumbs up to a new Home Box Office program that encourages cable customers to order the premium movie service online.

"Reaction has been phenomenal," AT&T Broadband Northeast regional product manager for pay TV Jeffrey Levy said. "We're finding an incredible acceptance rate to this new sales channel."

When HBO and the AT&T Boston system launched their first Internet-based ordering service in late August, Levy said, the MSO signed on 2,300 new HBO subscribers within the first three weeks.

"A good portion of these 2,300 online customers are incremental sales," he added. "This didn't cannibalize our call-center sales."

AT&T backed the effort with a month of advertising, including cross-channel, print and broadcast buys. One month after the advertising stopped, the operator is still getting 10 to 15 online orders a day for HBO, Levy added.

"We get online orders at all times of the day," Levy said, including at 4 a.m.

AT&T promoted a 30-day free trial to new HBO customers that ordered online, along with a $9 per month price through the end of the year.

"People expect when they purchase something on the Web that they're going to pay less," Levy said, whether it's books, compact discs or cars.

HBO is suggesting that all of its affiliates try some type of exclusive online offer, said HBO vice president of subscriber marketing Shelley Brindle.

Following the Boston trial, HBO also decided to brand the online sales method as HBO Express. The company will launch HBO Express this week in Memphis.

"We were looking for a name that personifies a few of the benefits to the consumer of what this capability does," Brindle said.

"Based on feedback from consumers, those benefits were the ease and speed of getting it online," as well as a perceived "express connection to HBO," even though the online orders actually go directly to the affiliated operator, she said.

Consumers are encouraged to go to the Web site, which links to operators participating in HBO Express once users plug in their ZIP codes.

"There's a brand benefit in terms of driving people to," Brindle said, adding that it's too early to track the likelihood that customers who sign up for the network over the Internet will return to the Web site for chats or information on upcoming programming.

The premium network hopes to roll HBO Express out to operators throughout the U.S. Brindle said HBO had waited for results from Boston before touting online ordering to its affiliates.

Once the network can deploy HBO Express on a widescale basis, it plans to advertise the program nationally and online, rather than via print or broadcast on a market-by-market basis. Brindle predicted that HBO would seek out a high-profile presence online, such as on America Online Inc. or Yahoo!'s welcome screens.

HBO also hopes operators will forward electronic-mail addresses from subscribers who agree to receive e-mailed information from cable companies and their programmers. AT&T in Boston has already sent HBO the e-mail addresses of such "opt-in" customers, Brindle said.

HBO can e-mail customers who placed orders online for its retention communications efforts and use other customers'addresses to drive acquisitions. "In many places, e-mail can replace direct mail," Brindle suggested.

In Boston, AT&T plans to bring back the online provisioning promotions early next year, backed by the HBO Express brand and a consumer offer tied to the next season of
The Sopranos
, which starts in March.

Online sales can offer benefits to operators as well as subscribers. It costs less to facilitate an online order, Levy said, and customer-service representatives can typically handle two or three times as many online orders as phone orders.

To support the online promotions, AT&T devoted four or five CSRs to handling Internet orders. Smaller cable systems may need to arrange regional partnerships to handle that amount of volume, noted Brindle.

"Each market has its own technical and operational issues," Brindle said. Some markets will use electronic billing systems that allow automated activation of the premium service to addressable boxes.

HBO marketing executives were present during the Boston launch to help with operational problems as they occurred, Levy said.

"HBO's people were involved until two in the morning on occasion when operational problems arose," Levy said. Because HBO's name was involved, the programmer wanted to make sure the ordering processes went smoothly for consumers, he added.

AT & T's Northeast region is open to similar online provisioning offers with other programmers, said Levy. The operator went with HBO first because of its unparalleled customer service and strong brand, he added.