New Cox offer: Cheaper TV for fewer channels

Cox Communications Inc. has added a television service option that cuts the price of its most popular package for fewer of its channels.

The new TV Economy tier offers 60 channels, including all the local affiliates of the broadcast networks and 18 digital channels, for $34.99 per month.

Cox's most popular package, combining its TV Starter tier of basic analog channels and the TV Essential lineup, costs $59.99 per month for 64 channels. That package's cost has climbed 66 percent in 10 years.

Cox has more than 416,000 Hampton Roads subscribers.

TV Economy customers also will get CNN, Discovery Channel, BET, Animal Planet, American Movie Classics, Disney Channel, Nickelodeon, Food Network, The Weather Channel and E! Entertainment TV, among others.

They won't get the ESPN sports network, one of the most expensive for cable operators to carry, or most regional sports channels. The new package also leaves out A&E, VH1, Spike TV, Syfy, TNT and others.

"We really tried to select the channels that were popular with most people," said Hobie Ritzel, Cox's senior video product manager at the company's regional office in Chesapeake. "I think this appeals to a very select group of customers," particularly those less interested in sports programming.

TV Economy offers a lower-priced entry into digital cable. The price covers the monthly rental cost of a digital receiver, which would otherwise add $5.99 per month. The new package includes 18 basic digital channels, such as The Cool TV Network, extra C-SPAN programming and WHRO's expanded public-television offerings.

To add that basic digital lineup to the TV Essential package, customers pay an additional $4 per month, plus the $5.99 set-top box rental fee - a total of $69.98. That package, known as Advanced TV, includes music channels and other digital features.

Cable companies, in general, are seeking ways to hold onto customers who are trying to trim their household budgets during tough economic times and finding more options for watching video content on the Internet. Other large cable system operators, including Time Warner Inc., have made offerings similar to TV Economy, Ritzel said.

A report released in November by cable and satellite TV analysts for investment bank Credit Suisse projected that the pay-TV industry would lose 200,000 subscribers this year. The report cited a recent Credit Suisse survey of more than 2,000 consumers who said the primary reason that they don't choose multichannel TV service is the price. The second- most common reason among those surveyed was their use of alternatives such as the video rental service Netflix and online video provider YouTube.

"Given the results of the Credit Suisse survey, we believe there can be little doubt that the weak economy has played a pivotal role in fewer new households subscribing to pay TV," analyst Stefan Anninger wrote in the report.

Cox, based in Atlanta, is privately held and is not among the companies covered by equity analysts.

The company launched a trial of TV Economy in May in markets outside Hampton Roads, Ritzel said. As part of the trial, Cox representatives offered TV Economy as a "retention option," when consumers didn't express interest in other Cox packages, he said.

Carolyn Shapiro, 757-446-2270, carolyn.shapiro@pilotonline.com