Looking to sign new digital subscribers and deter customers from dropping cable for satellite, Mediacom Communications Corp. plans to begin marketing a package of premium-movie channels to subscribers who could buy the programming without first buying expanded-basic or digital-basic packages.
Last week, Mediacom announced an agreement with Starz Encore Group LLC to offer the programmer’s Starz! HD and Starz On Demand services.
In May, Mediacom customers will be able to get 20 Starz! movie channels, Starz On Demand and a digital set-top and remote for one price, which the MSO still hasn’t set.
Mediacom senior vice president of marketing Mike Rahimi said the MSO is also negotiating similar agreements with Home Box Office and Showtime Networks Inc., and will market packages that allow subscribers to buy one or more premium channels and the accompanying subscription video-on-demand programming without having to subscribe to expanded-basic or digital-basic channels.
The strategy should also help Mediacom boost its digital cable penetration, Rahimi said. Homes that opt for the Starz package will be counted as digital-cable homes, even if they don’t buy Mediacom’s digital basic tier.
Starz Encore president of sales and marketing Bob Clasen said the Mediacom arrangement should provide a boost to his premium networks, which have only been available to customers that have a digital set-top.
“We’re not on a level playing field — we’re digital only,” Clasen said. Starz Encore rivals HBO and Showtime are available on analog to cable subscribers in most markets, he noted.
Clasen said he expects the Mediacom offer to appeal to existing cable subscribers who have been considering defecting to satellite services in order to get more movies, as well as to subscribers who’ve never bought premium networks.
“It looks to be a low-cost entry point to people who like movies but haven’t stepped up to premium movie channels before,” Clasen said.
Starz Encore is pitching a similar model to other cable MSOs, Clasen added.
Mediacom is one of the last cable MSOs to offer its subscribers premium SVOD content. Executive vice president of operations John Pascarelli said in a recent interview that Mediacom wanted to wait until it could offer premium networks and SVOD content in a broad package.
“We did hold back because we did not believe the way to expand the category was to ask premium households to pay more” for on-demand functionality, Pascarelli said. “We felt like the best way to deal with this was to make it inclusive, a single purchase.”
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