Cogeco 2003 Annual Report Download - page 5

fiscal 2004, we will be making our Personal Video Recorder
(PVR) solution available to customers for the first time, using
DCT-6208 units supplied by Motorola. These units also include
High Definition Television (HDTV) tuning capability, a new service
we also plan to introduce during fiscal 2004. This development
further empowers customers in their search for the ultimate
entertainment experience which we are determined to provide.
Dialogue with our customers has improved tremendously
through heightened research, better communications and tangible
service improvements. In particular, our decision to centralize
the marketing function under one corporate Vice-President, with
one corporate advertising agency, Ogilvy & Mather, has allowed
us to better understand our customers and communicate more
effectively using strategies better aligned with the realities of the
marketplace. This effort has been supported by much improved
service delivery capabilities at all levels of Cogeco Cable, in
particular, in dealing more effectively with customer requests
at our call centers and delivering the service in a fast, reliable
way in the field.
In an effort to better communicate with customers,
simplify their interactions with us and create a friendly transac-
tional environment, we have reconstructed our www.cogeco.com
site effective on August 25, 2003 which is much improved
compared to its earlier version.
From a retention standpoint, our strategies and
efforts have made a difference this year, as progressively
smaller numbers of customers have chosen to leave us for
the competition, either legal or illegal. In 2001-2002, we
had lost 42,398 customers or 4.8% of our base. This fiscal
2002-2003, customer losses have been reduced substantially
to 15,711, or 1.9% of this base. Of course, we will not be satisfied
until basic customer growth resumes, but reducing losses by 63%
this year is a very encouraging change, considering that the black
market continues to exist and that competing satellite services
finally realigned their prices closer to their costs only late in
our fiscal year, during the month of April 2003.
This has afforded us the opportunity to increase our
video service on average by about 5% or $1.75 for all basic
customers in Ontario and $2.20 for digital customers in Québec.
We continue to believe that competitive video services in Canada
are still very reasonably priced and that substantial value
remains untapped. Unlocking that value will, however, require
a continuing resolve by licensed broadcasting distributors to
focus on cost recovery and profitability, and on further progress
in developing a national strategy to deal with the black and
blue markets.
The black market is the larger issue in Canada with
some consumers illegally buying equipment to receive and
decrypt unauthorised US satellite services free of charge. Through
programs such as the Coalition Against Satellite Signal Theft
(CASST) and other collective and individual anti-piracy initiatives,
we hope to see: stricter, well publicized enforcement of the law
by law enforcement officers; recognition by the courts that theft
of satellite signals is indeed theft; tougher penalties through
amendments to Canadian legislation currently under review by
Parliament; and, more effective cooperation between Canadian
and American authorities. These measures will likely converge
to progressively rein in this illicit market segment which is still
currently growing, albeit at a reduced pace. With regards to the
blue market, better controls and enforcement by Bell ExpressVu,
the satellite provider who has acknowledged the need to address
Our dialogue with our customers
has improved tremendously through
heightened research, better
communications and tangible
service improvements.
Cogeco Cable Inc. 2003 3