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November 10, 1995

THREE NORTH AMERICAN-CONTROLLED UK CABLE TELEVISION OPERATORS FORM JOINT MEDIA LABORATORY

By CBR Staff Writer

Bell Cablemedia Plc, Nynex CableComms and TeleWest Communications Plc, the three UK cable television operators in embryonic alliance on multimedia programming, have announced the establishment of a media laboratory. It is the first phase of their May 31 agreement to lead co-ordinated industry development of on-demand multimedia broadband services. The venture’s aim is to create a single national network using inter-operable standards for both customers and content providers. After a short period of evaluation, the project will confirm the following suppliers to work on the trial: Hewlett-Packard Co for for HP MediaStream Server video servers; Northern Telecom Ltd for the network navigation software; Sybase Inc and Macromedia Inc’s Director for authoring and management software; Lockheed Martin Corp’s Lockheed Media for systems integration; and Andersen Consulting for content integration. telemarketing to between 30% to 50% of its customer base. If you just mail a catalogue once a quarter, you will not retain customers. With telemarketing, we try to establish a relationship, Sheahan explained. The day and age of being `bombs away’ with the a catalogue are over as well, you have to be fairly careful about who you send to and what you send. You have to develop a level of sophistication if you’re going to do the volumes we do. Roger Paradis, president and chief executive of software specialist Programmer’s Paradise, added that a 50% plus retention rate is the minimum for ultimate success. Both Sheahan and Paradis remarked on the critical importance of a flexible return policy. There has been lots of change and flexibility shown by the manufacturers in the last two years, Sheahan said, with a cautionary word. He who eats the return loses, so don’t eat the returns. Sheahan believes products are becoming easier to sell over the telephone and through catalogue, making direct mail an increasingly viable alternative for business and consumer markets.

By Marsha Johnston

Frank Kelcz, vice-president of European marketing and sales, Ziff-Davis International Media Group, said, however, that it’s a lot easier to sell software via mail order than hardware. In any case, said Sheahan, Even at the top corporate level, price and availability are top reasons why people buy from who they buy from; that’s why they buy from mail order. He added that the Windows personal computer market is much more difficult than the Mac market. The margins are lower and there is less customer loyalty. In any case, the Mac business is still enjoying between 40% to 70% growth rate, he said. Whatever the segment or country, said Hotopf, Mail order is an outmoded term, since it is mostly done by either fax or telephone. It is a term getting vaguer and vaguer and broader and broader. Some mail order firms are sending sales people to visit large accounts! Outdated as a term or not, participants agreed that mail order certainly does have a future, although the landscape of that future may differ from country to country. Session moderator Max Hotopf, editor of the PC Europa newsletter, described the variation in European mail order markets. He said Germany, for example, has between 15 to 20 players, each doing between $12m and $20m, while there are only two or three major players in each Nordic country and in Italy, each doing between $3m to $5m. He added Mail order companies in Sweden claim between 20% to 25% of the software market, whereas in Denmark, they say it’s only 5% to 6%. Inmac’s Aerts said mail order market share in Europe, including off-the-page and catalogue, is probably between 5% to 6% for personal computers and 6% to 7% for printers, adding that it should be higher in the UK, because there is more off-the-page. Paradis said Mail order market share for software is less than 5% in Europe, but has the potential of reaching between 15% to 20%. Programmer’s Paradise began its European business in Italy, where its first catalogue got a similar response to that in the US, Paradis revealed.

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