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SEC Filings

S-1
CHARTER COMMUNICATIONS, INC. /MO/ filed this Form S-1 on 07/28/1999
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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 customers who
have children under a specified age and do not currently subscribe to The Disney
Channel. We then target our marketing efforts with respect to The Disney Channel
to those households. In 1998, we were chosen by Claritas Corporation, sponsor of
a national marketing competition across all industries, as the first place
winner in their media division, which includes cable systems operations,
telecommunications and newspapers, 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
programs.
 
     In 1998, we introduced a new package of premium services. Customers receive
a substantial discount on bundled premium services of HBO, Showtime, Cinemax and
The Movie Channel. We 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 MVP package has increased
our premium household penetration, premium revenue and cash flow. As a result of
this package, HBO recognized us as a top performing customer. We are currently
introducing this same premium strategy in the systems we have recently acquired.
 
     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 use 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 and retaining customers who have never before
subscribed to cable television. Historically, these "nevers" are the most
difficult customers to attract and retain.
 
PROGRAMMING SUPPLY
 
     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".
 
     PROGRAMMING SOURCES.  We obtain basic and premium programming from a number
of suppliers, usually pursuant to a written contract. We obtain approximately
50% of our programming through contracts entered into directly with a
programming supplier. We obtain the rest of our programming through TeleSynergy,
Inc., which offers its partners contract benefits in buying programming by
virtue of volume discounts available to a larger buying base. Programming tends
to be made available to us for a flat fee per customer. However, some channels
are available without cost to us. In connection with the launch of a new
channel, we may receive a distribution fee to support the channel launch, a
portion of which is applied to marketing expenses associated with the channel
launch. The amounts we receive in distribution fees are not significant. For
home shopping channels, we may receive a percentage of the amount spent in home
shopping purchases by our customers on channels we carry. In 1998, these
revenues totalled approximately $5 million.
 
     Our programming contracts generally continue for a fixed period of time,
usually from three to ten years. Although longer contract terms are available,
we prefer to limit contracts to three
 
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