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SEC Filings

AVALON CABLE OF MICHIGAN INC/ filed this Form S-4 on 04/01/1999
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acquisitions that comprise the New England Cluster, we will be able to
consolidate operations, including office space, personnel and headends. We plan
to institute new channel launches, rate increases and marketing programs, in
conjunction with increased system capacity in the majority of the New England
systems by the end of 1999.
   We have various contracts to obtain basic, satellite and premium programming
for our cable systems from program suppliers, including, in limited
circumstances, some broadcast stations, with compensation generally based on a
fixed fee per customer or a percentage of the gross receipts for the particular
service. Some program suppliers provide volume discount pricing structures
and/or offer marketing support. In addition, we are a member of the National
Cable Television Cooperative, a programming purchasing consortium consisting of
small to mid-sized multiple system cable operations and individual cable
systems serving, in the aggregate, approximately 8.5 million cable basic
subscribers as of December 31, 1998. Programming consortiums such as the
National Cable Television Cooperative help create efficiencies in securing and
administering programming contracts for small and mid-sized cable operators. We
do not have long-term programming contracts for the supply of a substantial
amount of our programming. In cases where we do have these contracts, they are
generally for a fixed period of time ranging from one to five years and are
subject to negotiated renewal. While our management believes that our relations
with our programming suppliers are generally good, the loss of contracts with
certain of our programming suppliers would have a material adverse effect on
our results of operations.
   Our company, like most other cable television systems, offer our customers
various levels, or tiers, of cable service consisting of a combination of local
television stations including network affiliated, independent and public
television stations; a limited number of television signals from
"superstations" originating from distant cities:
  . public, government and educational access channels; and
  . various satellite-delivered, non-broadcast channels.
   Our cable systems generally offer a basic tier of cable service consisting
of broadcast channels and certain satellite delivered programming. For an extra
monthly charge, our cable systems also offer one or more additional tiers of
cable services and per-channel premium satellite-delivered channels generally
providing feature films, live sports events, concerts and other special
entertainment features. The programming offered by our cable systems varies
depending upon each system's channel capacity, viewer interests and, in some
cases, franchise requirements.
   We expect programming costs to increase in the ordinary course of our
business as a result of increases in the number of basic subscribers, increased
costs to purchase cable programming, expansion of the number of channels
provided to customers and contractual rate increases from programming
suppliers. We anticipate that programming costs may increase at rates beyond
historic levels, particularly for sports programming. For additional
information, please refer to the "Risk Factors," "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Regulation--
Copyright" sections of this prospectus.
Marketing, Customer Service and Community Relations
   Our strategy is to promote and market aggressively and to expand cable
television services to increase revenues and revenues per subscriber by adding,
upgrading and retaining customers. In order to implement our strategy, we plan
  . introduce targeted marketing campaigns, including outbound tele-
    marketing, direct mail, advertising and sponsorship of community based
    events such as fairs and sports teams,
  . use price promotions, such as installation specials, to attract new