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Presentation Outline

Presentation Outline. Executive Summary. Large drop in video subscribers. Root cause: Competition. Need to build stronger customer connection. Executive Summary. Recommendations. Create Customized Retention Program. Rollout in the Greater Los Angeles Area.

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Presentation Outline

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  1. Presentation Outline

  2. Executive Summary • Large drop in video subscribers • Root cause: Competition • Need to build stronger customer connection Executive Summary

  3. Recommendations • Create Customized Retention Program • Rollout in the Greater Los Angeles Area • Customize Content for Providers and Customers • Increased Retention Executive Summary

  4. Why not Economy? Recent drop in per capita disposable income Corresponding drop in coaxial cable subscriptions Similar drop in satellite TV revenues • Economic trends are systematic Situation Analysis

  5. Why not Internet? • 59%+ in each demo cite “home TV system” as the viewing choice for their favorite TV shows Small percentage of total market is cord cutting, only about 1% (1.7M) • Nielsen data demonstrates internet used by consumers to supplement cable content, not replace it Source: Deloitte, “The State of the Media Democracy: Game Changing”, Feb 1, 2011 Experain Simmons “New Media Study”, June 1, 2011 Nielsen, “Nielsen Estimates Number of US Television Homes to be 114.7 Million Situation Analysis

  6. Why Competition? • DirecTV and Dish Network have captured 25% of the cable market Situation Analysis

  7. Key Competitors Situation Analysis

  8. Current Market Coverage Los Angeles County TWC Coverage Area • 38% market share (746K HH) • 41,800 subscribers lost Market Analysis

  9. Segmentation Breakdown 87K (11.7%) 176K (23.6%) Family Households HH Income $150K+ $160/Video Subscriber 483K (64.7%) 4,885 Customers Lost = $781,600 Revenue Market Analysis

  10. Segmentation Breakdown 87K (11.7%) 176K (23.6%) Young Professionals HH Income $75K-$150K $129/Video Subscriber 483K (64.7%) 9,854 Customers Lost = $1,271,166 Revenue Market Analysis

  11. Segmentation Breakdown Non Family Professionals HH Income below $75K $99/Video Subscriber 87K (11.7%) 176K (23.6%) 483K (64.7%) 27,015 Customers Lost = $2,674,485 Revenue $4,744,890 TOTAL REVENUE LOST Market Analysis

  12. Why are they leaving? Market Analysis

  13. Current Retention Programs • Free Membership • Limited Membership One Level Membership Three Level Membership Points on Dollar Amount Points on Dollar Amount • Redemption Options: Gifts, Discount Outlet & Auction Redemption Options: Online Store Purchase Discounts Market Analysis

  14. Past Successful Programs • Rewards Program Launched in 1998 • 11% Drop - Disconnect Rate (Annual) • 10% Reduction - Service Downgrade (Annual) • 20% Increase – Revenue per Household (Annual) Source: http://directmag.com/mag/marketing_tci_turns_around/ Market Analysis

  15. Proposed Program CONNECT! “A program designed to engage the customer with unique rewards through active involvement” Proposed Program

  16. ProposedPrograms Proposed Program

  17. ProposedProgram • Bonus Points on Enrollment Initial Enrollment • Points on Monthly Expenditure Monthly Bill • Provide Promotions on Content • Points on Other Services (VOD) Orders VOD • Promote New products and Assess Potential • Points on Selective Promotions • Seeks Other ways to Earn Points • Retain Customer through engagement • Realize Value in Product • Targeted Marketing Initiatives • Develop Strategic Partnerships Proposed Program

  18. Sample Webpage Sign Out CONNECT! Home Welcome Mr. Tim Warner! Earn Points Redeem Current Points Balance 3000 Reach Out Redeem for Merchandise! (350 points) For Premium Support Call 1.800.000.0000 Today’s Trivia! What is the price of the latest Carl’s Jr. Burger? (200 points) Submit Proposed Program

  19. Sample Customer TimWarner Time Warner Cable Connect! Enrollment Correct Trivia Answer $133 Monthly Spend 1,000 points 200 points 266 points Two (2) Movies On Demand 40 points 1,506 points Proposed Program

  20. Short Term Benefits • Assumptions: • 10% Annual retention increasing at 1% y/y • Revenue/Customer=$113.64 growing at 3% y/y • Program cost =1% of Revenue =$847K • No gains accounted for from service upgrades Payback Period: 17 Months 5-Year Revenue Increase: $6.5 million Benefit & Vision

  21. Rollout Plan Months Website Development Plan On-Screen Homepage Bill Redesign to Include Rewards Points Plan Additional Rollouts in SC Train Call Center Agents Market to Existing Customer (Direct mail, e-mail, bill inserts) Contact Partners for Branded Rewards/Sponsorship Opportunities Benefit & Vision

  22. Risk Analysis Slower than expected adoption of the program • Low initial investment • Los Angeles test market Competition adopts similar practices • Leverage existing relationships with content providers and current customers Perceived narrow focus of program • Increased service upgrades and decreased service downgrades • Improved customer satisfaction Benefit & Vision

  23. Long Term Vision • Tailor Rewards and Content to Individual Customer Preferences • Continue to Develop New Partnership Opportunities Benefit & Vision

  24. THANK YOU!

  25. Appendix DVR Household Trend Cord-Cutting TV Still Preferred Method General TWC Market Profile Family Household Segment Young Professional Segment Aging Population Segment Customer Pyramid Viewing Habits by Demo TV Consumption for Internet Users Live and Playback by Demo TWC Sub Gains/Losses LA Coverage Statistics – 1 LA Coverage Statistics – 2 TWC Revenue Breakdown HH Cable Connection by Income Sub Losses by Segment Gains from Retention Program Sample On-Screen Display Competitor Comparison – 1 Competitor Comparison - 2

  26. DVR Household Trend TV sets per household has increased: Opportunity to take advantage of potential service-adds leading to revenue gains.

  27. Cord-Cutting Small percentage of total market that is cord cutting, only about 1% (1.7M)

  28. TV Still Preferred Method Television still preferred method of watching favorite TV shows across all demos

  29. General TWC MarketProfile • Male: 50% / Female: 50% • Mean Age: 36.51 • Average HH Income: $86,056 • Average HH Size: 2.91 • Key Consumers: A25-64 (55%) • P2-19 make up 33% of consumers

  30. Customer Segments • P25-49 (37% of market) • High income HH • HH has multiple cable set-top-boxes • Majority of P2-19 universe within HH (33% of market) • Heavy DVR and on-demand usage • TV viewing is a shared experience Family Households

  31. Customer Segments • P20-34 (21% of market) • College graduates • No children • Income growth potential • Future family household • Heavy DVR and on-demand usage • High price sensitivity • Most likely to switch/cancel video subscriptions Young Professionals

  32. Customer Segments • P50+ (29% of market) • Stable customers, low churn • Heavy users of traditional services: 40+ hours/week spent watching traditional TV • TV watching is done live • TV viewing is a personal experience Aging Population

  33. Platinum Gold Iron Customer Segmentation FamilyHouseholds: Multiple set-top-boxes, high usage of services, low price sensitivity, access to future consumers, bundle services (3) YoungProfessionals: Use full-range of services, high earning potential, bundle services (2) Non-family Professional: Use full-range of services, less price sensitive, bundle services (2), low growth potential Aging Population: Low usage of broad services, low earning potential, below average revenue per subscriber

  34. Viewing Habits by Demo

  35. TV Consumption for Internet Users • Most consumers, in all age groups, watch TV shows on a TV set to some degree. • Most at risk are P18-34 & P35-44

  36. Live & Playback by Demo

  37. TWC Subscriber Gains/Losses

  38. LA Coverage Statistics

  39. TWC Revenue Breakdown

  40. HH Cable Connection by Income

  41. Sub Losses by Segment

  42. Gains From Retention Program

  43. Sample Rewards Screen CONNECT! (500 points) (500 points) (750 points) (500 points) (1200 points) (1000 points) Select Merchandise (350 points each) In a universe as vast as it is mysterious, a small but powerful force has existed for centuries. Protectors of peace and justice, they are called the Green Lantern Corps. A brotherhood of warriors sworn to keep intergalactic order, each Green Lantern wears a ring that grants him superpowers. Watch Today! (1200 points or $14.95) Points Balance 3000 Today’s Trivia! What is the price of the latest Carl’s Jr. Burger? (200 points) Redeem Now! Submit Benefit & Vision

  44. Competitor Comparison

  45. Competitor Comparison

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