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marketing efforts and the follow-up analysis provide consumer information down
to the city block or suburban subdivision level, which allows us to create very
targeted marketing programs. We seek to maximize our revenue per customer
through the use of "tiered" packaging strategies to market premium services and
to develop and promote niche programming services. We regularly use targeted
direct mail campaigns to sell these tiers and services to our existing customer
base. We are developing an in-depth profile database that goes beyond existing
and former customers to include all homes passed. This database information is
expected to improve our targeted direct marketing efforts, bringing us closer
toward our objective of increasing total customers as well as sales per customer
for both new and existing customers. For example, using customer profile data
currently available, we are able to identify those customers that have children
under a specified age who do not currently subscribe to The Disney Channel,
which then enables us to target our marketing efforts with respect to The Disney
Channel to specific addresses. In 1997, we were chosen by Claritas Corporation,
sponsor of a national marketing competition across all industries, as the first
place winner for our national segmenting and targeted marketing program.
     Our marketing professionals have also received numerous industry awards
within the last two years, including the Cable and Telecommunication Association
of Marketers' awards for consumer research and best advertising and marketing
     In 1998, the Charter Companies introduced the MVP Package of premium
services. Customers receive a substantial discount on bundled premium services
of HBO, Showtime, Cinemax and The Movie Channel. The Charter Companies were able
to negotiate favorable terms with premium networks, which allowed minimal impact
on margins and provided substantial volume incentives to grow the premium
category. The MPV package has increased premium household penetration, premium
revenue and cash flow. As a result of this package, HBO recognized the Charter
Companies as a top performing customer. We are currently introducing this same
premium strategy in the Marcus Systems.
     We expect to continue to invest significant amounts of time, effort and
financial resources in the marketing and promotion of new and existing services.
To increase customer penetration and increase the level of services used by our
customers, we utilize a coordinated array of marketing techniques, including
door-to-door solicitation, telemarketing, media advertising and direct mail
solicitation. We believe we have one of the cable television industry's highest
success rates in attracting customers who have never before subscribed to cable
television. Historically, "nevers" are the most difficult customer to attract.
Based on data gathered at cable television conferences, we believe our
telemarketing force succeeded in persuading five times as many "nevers" to
become customers to our cable service compared to the industry average in 1997,
and five times as many "nevers" in 1998. Furthermore, we have succeeded in
retaining these "nevers."
     GENERAL.  We believe that offering a wide variety of conveniently scheduled
programming is an important factor influencing a customer's decision to
subscribe to and retain our cable services. We devote considerable resources to
obtaining access to a wide range of programming that we believe will appeal to
both existing and potential customers of basic and premium services. We rely on
extensive market research, customer demographics and local programming
preferences to determine channel offerings in each of our markets. See "-- Sales
and Marketing."