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Competitive Landscape Report February, 2013
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2 Bar/Restaurant Confidential and Proprietary FEBRUARY LEAD OFFER NATIONAL OFFER PORTFOLIO Available PackagesBest Comparison to CXP Total Channels (HD) ESPNRSNOne Year Cost Contract Lengths Satellite Commercial Xtra Pack (185/88) $79.99 for 12 mos; Free HD + SonicTap for 3 mos (Promo) (video only) 6 options $19.99-259.99 CXP - Free for 5 mos (Promo); $120.99 (Std) 185 (88)623 $1,000.88 0-2 years $50/mo credit with purchase of Starter Core, ESPN add-on, and at least five additional add-ons (Std) (video only) N/A Starter + Entertainment, ESPN, Learning, News, Sports A & B, Variety A, B, & C Add-ons -$126/mo (Promo); $176/mo (Std) 175 (56)50$1,512.001+ years Cable Basic Cable (LA) (55/8) - $56.95 (Std) (video only) ~ 4 options $47.60-87.80 Bars and Restaurants TV - $87.80/mo (Std) 72 (35)81$1,053.601-3 years Sports & Entertainment Deluxe (150+/52) - $109.95/month (Promo) (video only) 5 options $29.95-189.95 Digital Deluxe - $109.95/mo (Std) 150 (52)41$1,518.401-3 years TV Select (DC) (130/42) - $39.99 for 24 months + 50% off installation if ordered online or Free installation with 3-yr contract (Promo) (video only) ~ 3 options $24.50-71.40 Advanced TV - $74.29 (Std)174 (61)43$941.481+ years Optimum Entertainment (232/82) - $59.90 for 12 months (Promo) (video only) 1 option $94.95 Optimum Entertainment - $59.90 for 12 mos (Promo); $94.95 (Std) 232 (82)45$765.751+ years 10% off any package with double or triple play bundle (Promo) (2 or 3 play) 2 options $42-78 Expanded TV - $72.00 for 6 mos as part of 3 play (Promo); $80 (Std) 109-153 (29-56) 22$961.501+ years Business Digital TV (150/54) - 10% off when bundled with voice (Promo) (2 play) 1 option $104.99 Business Digital TV – $94.49 with voice (Promo); $104.99/mo (Std) 150 (54)UNK $1,280.880+ years Fiber Basic TV (25/0) - $5/month off for 24 months with triple play bundle Free Activation (Promo) (3 play) 32 options $19.99-149.99Extreme HD - $74.99/mo (Std)265 (65)810$1,049.860-2 years Service not available for Bar/Rest, Bus/Pri View Only! Service not available for Bar/Rest, Bus/Pri View Only!
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3 The Competitive Landscape: CXP vs. The Most Comparable Currently Advertised AT&T U-Verse service not available for Bar/Rest
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4 2-Year Cost Comparison Costs include all costs associated with a new customer contract with a package comparable to Commercial XTRA Pack (EVO 1-100) Confidential and Proprietary Comcast has a compelling TV offer for 4 outlets or less
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5 2-Year Cost Comparison Confidential and Proprietary No longer qualifies for $109.95 offer
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6 Business/Private Confidential and Proprietary FEBRUARY LEAD OFFER NATIONAL OFFER PORTFOLIO Available Packages Best Comparison to Business Information Total Channels (HD) Included Outlets/ Additional Outlet Fees One Year Cost Contract Lengths Satellite Business Information (45/12) - $29.99 for 12 months; Free HD + SonicTap for 3 mos (Promo) (video only) 8 options $19.99-89.99 Business Information - $29.99 for 12 months (Promo); $42.99 (Std) 45 (12) 4 SD or 2 HD/$6.00 $468.88 0-2 years $30/mo credit with purchase of Starter Core and at least six additional add-ons (Std) (video only) N/A Starter Core Package + News+ Variety B add-ons –$48/mo (Std ) 60 (10)1/UNK$528.001+ years Cable TV Starter (PHX) (50/13) – $10/mo for 12 months with 1-year contract (Promo) (3 play) ~ 3 options $24.50-71.40 TV Select - $39.99 for 24 months + 50% off installation (Promo); $63.29 (Std) 130 (42)1/$10.00$629.391+ years Basic TV (35/0) - $20 off with triple play bundle (Promo) (3 play) 4 options $24.95-89.95 Info & Entertainment - $29.95 for 3 mos with 3 play (Promo); $44.95 (Std) 50 (15)1/$9.25$693.401-3 years Basic Video (55/8) - $39.95 (Std) (Video only) ~ 4 options $39.95-99.70 Basic Video – $39.95 (Std)55 (8)1/$14.00$625.391-3 years 10% off any package with double or triple play bundle (Promo)(2 or 3 play) 2 options $42-78 Basic TV Bus/Pri - $33.29 for 6 mos as part of bundle (Promo); $36.99 (Std) 43 (11) 1/$10.95$520.681+ years Broadcast Basic (35/10) - $29.95 for length of contract (Std) (video only) 2 options $29.95-58.95 Broadcast Basic - $29.95/mo (Std)35 (10)0/$9.95$406.351+ years Business Digital TV (150/54) - 10% off when bundled with voice (Promo) (2 play) 1 option $104.99 Business Digital TV – $94.49 with voice (Promo); $104.99/mo (Std) 150 (54)3/$4.99$1,280.880+ years Fiber BV Basic (36/17) - $20/month (Std); Video service only, must be bundled with Internet (2 play) 3 options $40-85 U-Verse Basic TV - $20/mo (Std)36 (17)1/$12.95$240.000+ years Basic TV (25/0) - $5/month off for 24 months with triple play bundle Free Activation (Promo) (3 play) 4 options $19.99-89.99 Local - $19.99/mo (Std)25 (0)3/$19.99$389.860-2 years
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7 2-Year Cost Comparison Confidential and Proprietary
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8 Quarter Snapshot December, 2012 – February, 2013 Confidential and Proprietary THIS QUARTER IN REVIEW The end of 2012 saw little change on the small business video front, however in January your competitors began to make adjustments to their product offerings. DISH and Charter raised the standard pricing across their video offer portfolio, most likely in response to the raising programming costs viewed in 2012. Comcast, TWC, and Comcast all stayed mostly the same from last quarter, but we did see all three weaken their offers by removing promotions that had been extended previously (Comcast, Cox) or decreasing the promotional values (TWC). AT&T added functionality to their website that allows for customers to view U-Verse TV offers which will provide us with greater access to information moving forward. Also greater access for their customers. At times this quarter, FiOS weakened their triple play offer by reducing the cash back promotional value from $200 to $100. As you continue, this report will show that despite these changes, DIRECTV can still attack these offers to win and retain customers.
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9 DIRECTV February, 2013 Confidential and Proprietary
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10 Source: DTV Sales Guide 2/6/13; Website: 2/19/13 DIRECTV’s Bar & Restaurant Snapshot Confidential and Proprietary Premium DIRECTV Entry Bar/Rest Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels* ESPNRSN Additional Promotion Term Commercial Basic No Promo 30 (2)000 Up to two free SD receivers 24 Months $19.99 Business Information $29.99 for 12 mos w/ ABP 45 (12)900 Free for 3 Months: HD Access and Sonictap 24 Months $42.99 Commercial Choice (EVO 1-50) $44.99for 12 mos w/ ABP 125 (48)2300 Free for 3 Months: HD Access and Sonictap 24 Months $58.99 Commercial Entertainment Pack (EVO 1-100) $59.99 for 12 mos w/ ABP 96 (44)23 ESPN, ESPN2, ESPN3D 0 Free for 3 Months: HD Access and Sonictap 24 Months $84.99 Comercial Mas Ultra $59.99 for 12 mos w/ ABP 129 (38)22 ESPN, ESPN2, ESPN Classic, ESPN Deportes, ESPNews 0 Free for 3 Months: HD Access and Sonictap 24 Months $92.99 Commercial Xtra Pack $79.99 for 12 mos w/ ABP 184 (88)31 ESPN, ESPN2, ESPN3D, ESPN Classic, ESPNews, ESPNU 26 Free for 3 Mos HD and Sonictap 24 Months $120.99 Commercial Choice Plus (EVO 101-150) $189.99 for 12 mos w/ ABP 138 (53)27 ESPN, ESPN2, ESPN3D, ESPN Classic, ESPNews, ESPNU 0 Free for 3 Months: HD Access and Sonictap 24 Months $259.99 DTV Insights: Customers must have a two year contract and sign-up for ABP to get best deals. *A count of the number of most requested channels as defined by DTV customers
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11 DIRECTV’s Business & Private Snapshot Confidential and Proprietary Entry DIRECTV DTV Insights: With no popular channels, Commercial Basic offers little value for both SMB customers and employees. Source: DTV Sales Guide 2/6/13; Website: 2/19/13 Premium Bus/Pri Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPN Included Outlets/ Additional Outlet Fees Additional Promotion Term Commercial Basic No Promo 30 (2)00 1 Up to two free SD receivers 24 Months $19.99$6.00 Office Information $29.99 for 12 mos w/ ABP 47 (11)100 1 Free for 3 Months: HD Access and Sonictap 24 Months $42.99$6.00 Business Information $29.99 for 12 mos w/ ABP 45 (12)90 1 Free for 3 Months: HD Access and Sonictap 24 Months $42.99$6.00 Office Entertainment $44.99 for 12 mos w/ ABP 58 (32)160 1 Free for 3 Months: HD Access and Sonictap 24 Months $66.99$6.00 Business Entertainment $44.99 for 12 mos w/ ABP 56 (30)140 1 Free for 3 Months: HD Access and Sonictap 24 Months $66.99$6.00 Comercial Mas Ultra $49.99 for 12 mos w/ ABP 129 (38)22 ESPN, ESPN2, ESPN Classic, ESPN Deportes, ESPNews 1 Free for 3 Months: HD Access and Sonictap 24 Months $62.99$6.00 Office Choice $54.99 for 12 mos w/ ABP 142 (52)30 ESPN, ESPN2, ESPN Classic, ESPNews, ESPNU 2 Free for 3 Months: HD Access and Sonictap 24 Months $89.99$6.00 Business Choice $54.99 for 12 mos w/ ABP 174 (85)30 ESPN, ESPN2, ESPN3D, ESPN Classic, ESPNews, ESPNU 2 Free for 3 Months: HD Access and Sonictap 24 Months $89.99$6.00
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12 DISH February, 2013 Confidential and Proprietary
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13 Dish’s Bar & Restaurant Snapshot Confidential and Proprietary Premium Source: Provider website. 2/19/13 Entry Bar/Rest Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPNRSN Additional Promotion Term Starter + News Add-On No Promo 54 (4)400NA24 Months $34.00 Starter + Latino Popular and Latino Elite Add-ons (Similar to Comercial Mas Ultra) No Promo 85 (3) Includes 41 Spanish language channels 3 ESPN Deportes 0NA24 Months $48.00 Starter + Entertainment, Learning, News, Sports A & B, Variety A, B, & C Add-ons (Similar to Commercial Choice) $116.00 170 (56)2000NA24 Months $126.00 Starter + Entertainment, ESPN, Learning, News, Sports A & B, Variety A, B, & C Add-ons (Similar to Commercial Choice Plus) $126.00 175 (56)24 ESPN, ESPN2, ESPN Classic, ESPNews, ESPNU 0NA24 Months $176.00 Starter + Learning + News+ Variety B + ESPN + RSN add-ons (Similar to Commercial Xtra Pack) 302.00 140 (49)24 ESPN, ESPN2, ESPN Classic, ESPNews, ESPNU 25NA24 Months $352.00 DISH Insights: Pricing model works best for customers with specific needs. However, there is an additional $10/mo discount for customers who purchase 3+ add-on packages. ESPN channels can be added to any package for $50/mo Customers can receive a $50/mo discount by buying the Starter Pack, ESPN, and any 5 add-on packages. Sports add-ons are comprehensive but expensive. Bar/Rest DISH
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14 Dish’s Business & Private Snapshot Confidential and Proprietary Entry DISH Insights: Dish gets customers in the door with low sticker prices but then will try to up sell customers to more add-ons. Customers can get exactly what they want, without a lot of extras. The cost of additional add-ons add up quickly. Customers can receive a $30/mo discount by buying the Starter Pack and any 6 add-ons. Source: Provider website. 2/19/13 Premium Bus/Pri Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPN Included Outlets/ Additional Outlet Fees Additional Promotion Term Starter + News Add-On No Promo 54 (4)40 1 NA24 Months Unknown $34.00 Starter + Latino Popular and Latino Elite Add- ons No Promo 85 (3) Includes 41 Spanish language channels 3 ESPN Deportes (Included in Latino Elite) 1 NA24 Months $48.00Unknown Starter + News, Variety A, Variety B Add-ons (Similar to Business/Office Information) $50.00 81 (16)80 1 NA24 Months $60.00Unknown Starter + Entertainment, Learning, Lifestyle, and Variety A Add-ons (Similar to Business/Office Entertainment) $64.00 130 (37)100 1 NA24 Months $74.00Unknown Starter + Entertainment, ESPN, Kids, Learning, Lifestyle, News, Sports A, Variety A, B, & C Add-ons (Similar to Business/Office Choice) $130.00 200 (62)30 ESPN, ESPN2, ESPN Classic, ESPNews, ESPNU 1 NA24 Months $160.00Unknown DISH
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15 DISH December, 2012 – February, 2013 Confidential and Proprietary Changes This Quarter Dish increased the rate of their standard core package and the rates on the following video add-ons during January: Learning, Lifestyle, Latino Popular, Sports A, Variety B, Variety C, ESPN, Fox Soccer, and Fox Soccer Plus. Of these packages ESPN ($5/mo) and the sports packages Fox Soccer and Fox Soccer Plus saw the greatest increases. The other packages increased by $2/mo How to Compete In February 2011, Dish CEO Joseph Clayton committed to not raising prices until January 2013. Rates have likely increased now due to higher programming costs, but with most add-ons only increasing by $2/mo, Dish’s strategy of getting customers in with a low price and then up selling them to higher priced services (i.e. more and more expensive add-on packages) The cost of additional add-ons add up. DISH provides a great value to customers looking for just one or two add-ons. After that, customized plans can get expensive, even with discounts up to $30/month for Bus/Pri and $50/month for Bar/Rest. To match CXP in just sports programming, a DISH customer would need to spend over $300/month in add-ons! DISH seems to follow a “bottom-up” approach by encouraging customers to buy only as much add-ons as needed. Their marketing is aimed at the small customers not at the number of channels and sports they offer. However, for customers looking for 3 or more add-ons, in most cases DIRECTV has an offer that has more channels at a better price. In fact, the promotional rates of all of DIRECTV’s Bus/Pri offers (except Choice) are lower than the customized Dish package.
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16 COMCAST February, 2013 Confidential and Proprietary
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17 Comcast’s Bar & Restaurant Snapshot Confidential and Proprietary Premium COMCAST Comcast Insights: Pricing is by flat rate, not by seating occupancy, EVO, or FCO. Comcast really starts to tip the balance in their favor on seating occupancies 200+. Sports and Entertainment Deluxe is Comcast’s ultimate package for large Bar/Rest however promotional pricing is only available to customers with up to 4 outlets. Source: Provider website. 2/19/13 Entry Bar/Rest Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPNRSN Additional Promotion Term Basic No Promo 35 (2)000 40% off every additional outlet over the first 8 12 Months $29.95 Digital Basic Plus No Promo 50 (15)800 40% off every additional outlet over the first 8 12 Months $54.95 Digital Standard No Promo 80 (22)20ESPN, ESPN2Local RSN 40% off every additional outlet over the first 8 12 Months $84.95 Digital Deluxe No Promo 150 (52)28 ESPN, ESPN2, ESPNews, ESPNU Local RSN 40% off every additional outlet over the first 8 12 Months $109.95 Sports and Entertainment Deluxe $109.95 150+ (52)29 ESPN, ESPN2, ESPN Classic, ESPNews, ESPNU Local RSN 40% off every additional outlet over the first 8 24 Months $189.95
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18 Comcast’s Business & Private Snapshot Confidential and Proprietary Entry COMCAST Comcast Insights: Comcast’s Information and Entertainment package provides little value with only 5 Popular channels and a $44.95 price point; compare to Business/Office Information that has twice the popular channels. Comcast incentivizes customers to accept two and three year contracts by providing discounts on installation. Source: Provider website. 2/19/13 Premium Bus/Pri Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPN Included Outlets/ Additional Outlet Fees Additional Promotion Term Basic $4.95 for 3 mos when bundled 35 (0)00 0 40% off every additional outlet over the first 8 12 Months $24.95$9.25 Information and Entertainment $29.95 for 3 mos when bundled 50 (15)50 1 40% off every additional outlet over the first 8 12 Months $44.95$9.25 Standard $59.95 for 3 mos when bundled 80 (22)200 1 40% off every additional outlet over the first 8 12 Months $74.95$9.25 Preferred $74.95 for 3 mos when bundled 150 (52)23 ESPN, ESPN2, ESPNews, ESPN Classic 1 40% off every additional outlet over the first 8 12 Months $89.95$9.25
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19 COMCAST December, 2012 – February, 2013 Confidential and Proprietary Changes This Quarter Comcast has continued to extend their Sports & Entertainment Deluxe for $109.95/mo with 2-year agreement (standard $189.95) promotion to the end of the respective month. Comcast has removed their promotion offering $10/mo off when ordered online. How to Compete By removing their $10/off promotion, the only discount Comcast offers for Bar/Rest is on their most expensive package: $109.95/mo for Sports & Entertainment Deluxe. Comcast’s offer of Sports & Entertainment Deluxe for $109.95/mo is a great deal that beats the standard price of DIRECTV’s Commercial Xtra Pack. Only available to customers with up to 4 outlets, limiting its effectiveness (Bar/Rest) By practically giving away its Basic TV service (just $4.95/mo) when bundled, Comcast hopes that they can convince customers to upgrade to a more expensive service after the 3 month promotional period. DIRECTV’s 12-month promotions provide a better deal than Comcast’s 3-month discounts across the board over a one year period. Comcast’s Digital Standard and Digital Deluxe weakness is their sports programming as CXP and Commercial Choice Plus both offer more ESPN and RSN channels. Customers can upgrade sports offerings for $34.95/mo (a 41% and 32% price increase respectively), but at that rate DIRECTV’s CXP is a better value. (Bar/Rest)
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20 COX COMMUNICATIONS February, 2013 Confidential and Proprietary Unlike most companies in the SMB commercial space that generally keep their pricing and plans consistent across their footprint, Cox operates on a regional structure. Across these regions Cox may offer different plans, pricing, and/or promotions. In the following tables for Cox, the median price across all markets is used, except in cases where a specific market’s price/promotion is called out, and all channel counts are shown as a range across all markets.
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21 Cox’s Bar & Restaurant Snapshot Confidential and Proprietary Premium COX Cox Insights: Advanced TV is the only offer customers can purchase add-on services such as a movie, variety, or sports add-ons. Free HD programming across all markets and offers compared to 3 months Free HD with DTV. Source: Provider website. 2/19/13 Entry Bar/Rest Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPNRSN Additional Promotion Term Starter PHX - $10 for 12 mos when used to complete a triple play 27-70 (0-22)000 Free HD (All), Free installation when bundled with Internet and voice (PHX) 12 Months $24.50 Select DC - $39.99 for 24 mos CLE - $40 for 24 mos 80-143 (0-57)21ESPN, ESPN22 Free HD (All), 50% off Installation when ordered online (DC) 24 Months $60.50 Advanced No Promo 151-201 (56-83)21 ESPN, ESPN2 (ESPNU and ESPN Classic w/Sports and Info Pak) 2Free HD (All)24 Months $74.02
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22 Cox’s Business & Private Snapshot Confidential and Proprietary Entry COX Cox Insights: High channel counts at relatively low prices. Starter is an even worse value than Commercial Basic outside of PHX No offer to compete with Business/Office Information. Source: Provider website. 2/19/13 Premium Bus/Pri Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPN Included Outlets/ Additional Outlet Fees Additional PromotionTerm Starter PHX - $10 for 12 mos when used to complete a triple play 27-70 (0-22)00 1 Free HD (All), Free installation when bundled with Internet and voice (PHX) 12 Months $24.50$10.00 Select DC - $39.99 for 24 mos CLE - $40 for 24 mos 80-143 (0-57)21ESPN, ESPN2 1 Free HD (All) 50% off Installation when ordered online (DC) 24 Months $60.50$10.00 Advanced No Pomo 151-201 (56-83)21 ESPN, ESPN2 (ESPNU and ESPN Classic w/Sports and Info Pak) 1 Free HD (All)24 Months $74.02$10.00
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23 COX COMMUNICATIONS December, 2012 – February, 2013 Confidential and Proprietary Changes This Quarter On 01/01/2013 Cox’s latest promotions expired. As a result the following promotions were either added or extended: Cleveland (Added) – TV Select is available for $40/mo for 24 months w/ 2 year agreement (standard price is $55.95) D.C. (Extended) – Receive 50% off installation when TV Select is ordered online with a two year agreement or free installation with a three year agreement. Phoenix (Extended) – TV Starter is available for $10/mo for 12 months plus free installation when added to Cox Internet and voice (standard price is $25.95/mo). Requires a minimum 1-year contract. D.C. (Extended) – TV Select is available for $39.99/mo plus get one month free with a 2-year contract (standard price is $63.29). The above promotions all show an expiration date of 04/01/2013 D.C. – Cox previously included their Sports & Info Pak ($5.25/mo) with Advanced TV, this has now been removed. How to Compete For the first time since year, Cox is not offering an Advanced TV promotion in at least one of their markets. With the promotion Cox was a clear price leader for that offer level but that advantage is now gone. Cox is showing new interest in their TV Select Plan. At the $40/mo promotional price TV Select is an attractive offer especially for Bus/Pri. DTV’s advantage is in the customers ability to configure their plan through add-ons, Cox only allows this type of configuration with their Advanced TV offer. Cox’s biggest weakness is their below average ESPN, RSN, and alternative sports programming (Speed, Outdoor Channel, league specific channels, etc…) included in their offers. Cox includes free HD access on all their plans, and there is currently no difference between their private and public offers.
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24 TIME WARNER CABLE February, 2013 Confidential and Proprietary Unlike most companies in the SMB commercial space that generally keep their pricing and plans consistent across their footprint, TWC operates on a regional structure. Across these regions TWC may offer different plans, pricing, and/or promotions. In the following tables for TWC, the median price across all markets is used, except in cases where a specific market’s price/promotion is called out, and all channel counts are shown as a range across all markets.
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25 TWC’s Bar & Restaurant Snapshot Confidential and Proprietary TWC Insights: TWC attracts customers by including 8 ESPN channels and with a reasonable price. Low overall channel count based on price 10% and 20% discounts for customers who select 2 or 3-year contracts respectively. Source: Provider website. 2/19/13 Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPNRSN Additional Promotion Term Basic No Promo 55-75 (8-14)Unknown NA36 Months $47.60 Standard No Promo 110-167 (50-60)Unknown NA36 Months 67.60 Digital No Promo 225-314 (65-86)Unknown NA36 Months 85.30 Bars and Restaurants TV No Promo 72 (35)16 ESPN, ESPN2, ESPN Classic, ESPNews, ESPNU, ESPN Deportes, ESPN Goal Line, ESPN Buzzer Beater Local RSN(s)NA36 Months $87.80 TWC
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26 TWC’s Business & Private Snapshot Confidential and Proprietary Entry TWC TWC Insights: TWC has segmented its offers to cater towards specific customers. At least one ESPN channel is included with every package. 10% and 20% discounts for customers who select 2 or 3-year contracts respectively. Source: Provider website. 2/19/13 Premium Bus/Pri Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPN Included Outlets/ Additional Outlet Fees Additional Promotion Term Digital News Tier No Promo 29 (11)8 ESPNews 1 NA36 Months $40.80$14.00 Business Advantage No Promo 34 (16)10 ESPNews 1 NA36 Months $48.30$14.00 Healthcare TV No Promo 68 (32)18 ESPN, ESPN2, ESPNews 1 NA36 Months $73.30$14.00 Prime Cable TV No Promo 86 (43)19 ESPN, ESPN2, ESPNews 1 NA36 Months $73.30$14.00
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27 TIME WARNER CABLE December, 2012 – February, 2013 Confidential and Proprietary Changes This Quarter TWC increased the promotional rate on their running triple and double play promotions: Triple Play Promotion (was $99.99): NY: 7 Mbps Internet, Unlimited Tri-state calling, and Digital News Tier TV for $109.98/mo with 1-yr contract. Double Play Promotion (was $99.95 for both services): Cleveland, Dallas, and LA: 10 Mbps Internet for $99.95/mo + Business Class phone for $29.95/mo when bundled with 3-yr contract. NY (Added Since Last Quarter): $39.99 per service per month for 7 Mbps Internet + Unlimited phone with 1-yr contract. How to Compete With TWC focused on voice and Internet, DIRECTV customers have the opportunity to combine DTV service with TWC double plays for a comparable price and more channels than a traditional TWC triple play (see chart). For businesses with multiple TVs, DIRECTV’s price advantage on outlet fees adds up to big savings for the customer (a savings of $8/outlet/month). E.g. a business with three TVs would be saving ~ $288/year just on outlet fees by switching to DTV. TWC Bars and Restaurants TV offers a very compelling option to bars and restaurants not looking for sports add-ons like NFL Sunday Ticket. However, CXP’s promotional price is still less expensive over the first year. CXP also offers more RSNs and “popular” channels. Comparing DIRECTV to TWC in NY TWC – $109.98 Triple Play DIRECTV – Business Information + TWC Double Play Internet Downstream Speed 7 Mbps PhoneTri-State Calling Total Channels2945 HD Channels1112 Monthly Price$109.98$109.97
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28 CHARTER COMMUNICATIONS February, 2013 Confidential and Proprietary
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29 Charter’s Bar & Restaurant Snapshot Confidential and Proprietary Premium CHARTER Charter Insights: Charter’s offers a 10% discount to customers who bundle. Charter offers a limited sports selection (2 ESPNs, local RSNs) however, sports programming can be increased with Sports View add-on (3 ESPNs). Sports View add-on is available for $89/mo. Source: Provider website 2/19/13 Entry Bar/Rest Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPNRSN Additional Promotion Term Basic $39.60 for 6 mos w/ bundle 37-74 (8-15)000 Save 50% on installation when bundled 12 Months $44.00 Expanded $72.00 for 6 mos w/ bundle 109-153 (29-56)20 ESPN, ESPN2 (ESPN Classic, ESPNews, ESPNU available w/ Sports View add-on) 2 Save 50% on installation when bundled 12 Months $80.00
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30 Charter’s Business & Private Snapshot Confidential and Proprietary Entry CHARTER Charter Insights: Expanded TV offers a large number of “popular” channels at a low monthly charge; however Basic TV offers little value despite relatively high channel counts. Charter is strongly focused on their phone & Internet double play and offer discounts to customers who bundle with TV. Sports View add-on is available for $89/mo. Source: Provider website. 2/19/13 Premium Bus/Pri Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPN Included Outlets/ Additional Outlet Fees Additional Promotion Term Basic $33.29 for 6 mos w/ bundle 37-74 (8-15)00 1 Save 50% on installation when bundled 12 Months $36.99$10.95 Expanded $53.99 for 6 mos w/ bundle 109-153 (29-56)20 ESPN, ESPN2 (ESPN Classic, ESPNews, ESPNU available w/ Sports View add-on) 1 Save 50% on installation when bundled 12 Months $59.99$10.95
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31 CHARTER December, 2012 – February, 2013 Confidential and Proprietary Changes This Quarter Charter has simplified their online shopping cart and have removed the option to select between basic and expanded TV, however both options are confirmed to still be available. Mystery shopping has revealed that Charter has increased all offer pricing by $2/mo as follows: Private – Basic TV: $36.99/mo from $34.99/mo Private – Expanded TV: $59.99/mo from $57.99/mo Public – Basic TV: $44/mo from $42/mo Public – Expanded TV: $78/mo from $80/mo How to Compete Charter’s price increase on its TV packages is most likely due to rising programming costs. With this increase, the one year cost of CXP ($846.93) is now lower than Expanded TV ($866.40) while offering a lot more value. In addition, Business Choice has more “popular” channels for still about the same price (Bus/Pri). Basic TV offers nearly no value; Business Information offers more for about the same price and Commercial Basic offers the same for nearly $30 less per month DIRECTV has a clear advantage on equipment fees. Consider a customer that needs 4 HD receivers. Over the first year, with DIRECTV that customer would pay $198; with Charter, that customer would pay $778.20 just on receivers! Charter still discounts Internet when purchased with just voice (so it can still be taken advantage of if a customer bundles Charter voice and Internet with DTV video).
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32 VERIZON FIOS February, 2013 Confidential and Proprietary
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33 Verizon FiOS’s Bar & Restaurant Snapshot Confidential and Proprietary Premium FiOS FiOS Insights: Offers EVO pricing for Bars and Restaurants. Customers who do not bundle and/or request a no contract option are faced with high activation and installation fees. Extreme HD has high channel counts and market leading ESPN options. Source: Provider website. 2/19/13 Entry Bar/Rest Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPNRSN Additional Promotion Term Local (Not Contingent on EVO) No Promo 25 (0)000 Free FiOS TV activation with any FiOS bundle (a $99.99 value) 24 Months $19.99 Extreme HD (EVO 1-50) No Promo 265 (65)15 ESPN, ESPN2, ESPNU, ESPN Buzzer Beater, ESPN Goal Line, ESPN Classic, ESPN Deportes, ESPNews 10 Free FiOS TV activation with any FiOS bundle (a $99.99 value) 24 Months $149.99
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34 Verizon FiOS’s Business & Private Snapshot Confidential and Proprietary Entry FiOS FiOS Insights: FiOS is currently marketing their Internet and Phone double play with a $200 Visa prepaid card. FiOS has high set-up costs when ordered without a contract; their equipment fees are slightly higher overall than DIRECTV’s. Source: Provider website. 2/19/13 Premium Bus/Pri Video PackagesFeaturesContract Name Promotional Price/ Standard Price Total Channels (HD) # of Most Popular Customer Requested Channels ESPN Additional Promotion Included Outlets/ Additional Outlet Fees Term Local No Promo 25 (0)00 Free FiOS TV activation with any FiOS bundle (a $99.99 value) 3 24 Months $19.99 Prime HD No Promo 170 (42)14 ESPN, ESPN2, ESPNU Free FiOS TV activation with any FiOS bundle (a $99.99 value) 3 24 Months $64.99$19.99 Extreme HD No Promo 265 (65)15 ESPN, ESPN2, ESPNU, ESPN Buzzer Beater, ESPN Goal Line, ESPN Classic, ESPN Deportes, ESPNews Free FiOS TV activation with any FiOS bundle (a $99.99 value) 3 24 Months $74.99$19.99 Ultimate HD No Promo 330 (82)15 ESPN, ESPN2, ESPNU, ESPN Buzzer Beater, ESPN Goal Line, ESPN Classic, ESPN Deportes, ESPNews, ESPN 3D Free FiOS TV activation with any FiOS bundle (a $99.99 value) 3 24 Months $89.99$19.99
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35 VERIZON FiOS December, 2012 – February, 2013 Confidential and Proprietary Changes This Quarter Verizon FiOS weakened their triple play offer during last quarter by reducing the cash back promotional value from $200 to $100. Recently, FiOS increased the cash back amount back to $200, this deal expires on 3/16/2013. How to Compete DTV customers who add CXP to FiOS’s “Solutions Business” Internet and phone bundle come out on top compared to a VZ FiOS triple play with Extreme HD When not bundling, FiOS customers will have to pay high installation and activation fees. VZ charges slightly more for additional outlets and additional HD receivers. For large establishments, these costs can add up fast. For Verizon all additional outlets, public or private, cost $19.99/mo.
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