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Cox's VOD target: 40% of homes passed by year-end

Sun, 04/21/2002 - 8:00pm
Jeff Baumgartner, Susan Rush

Following an aggressive foray into cable telephony, Cox Communications Inc. plans to do much of the same with video-on-demand, and leverage the service to obtain and retain digital customers.

On Monday, the MSO said it has launched video-on-demand service, which it dubs "Entertainment on Demand," systemwide to all digital subs in San Diego, Calif., and plans to roll out the service to an additional seven markets before the end of 2002.

"While our San Diego customers are the first to experience this innovative product, we expect Entertainment on Demand to be available to more than 40 percent of our homes passed by the end of the year," said Cox President and CEO Jim Robbins, in a press release.

In San Diego, Cox has tapped InDemand for content, Concurrent Computer Corp. for video servers and back office management software and N2 Broadband for content security.

Cox also plans to offer "FreeZone," offering digital subs on-demand access to advertising-supported content such as short independent films, action sports vignettes and interviews with local celebrities.

Cox also offers VOD in Hampton Roads, Va., and has tested the service in Phoenix, Ariz.

Separately, Cox's first-quarter results offered a mix bag - revenue jumped, but net income fell. Subscriber growth in its high-speed Internet access and digital telephone sectors fueled a revenue increase from $991.4 million in Q1 2001 to $1.18 billion in the just-ended quarter. Net income dropped from $686.6 million or $1.14 per share in the period a year ago to $135.6 million, or 22 cents a share.

Cox Digital Cable added approximately 155,500 customers in the first quarter of 2002, and is now available in 95 percent of the homes in Cox's service areas. High-speed Internet and Cox Digital Telephone customers increased by approximately 117,700 and 62,700, respectively, in the first quarter of 2002, and by approximately 414,000 and 224,000, respectively, as compared to March 31, 2001.

Looking ahead, Cox says it is on track to meet its previous year-end 2002 goals. The company expects to post year-over-year operating growth of between 13 percent and 14 percent. Capital expenditures will be roughly $2 billion.

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