Cox Communications Announces Launch of First-Ever Advertising-Focused Video On Demand Channel.

Business Editors

ATLANTA--(BUSINESS WIRE)--Aug. 20, 2002

Cox is the First Cable Operator to Explore

Advertising in the World of VOD

Cox Communications, Inc. (NYSE: COX) today announced the launch of its new FreeZone service in San Diego, California.

FreeZone, channel 997 for digital cable subscribers in San Diego, is a video on demand channel that offers a slate of free entertainment and commercial information made possible by advertising support.

All content can be viewed on-demand with full VCR-like functionality (pause, rewind, fast forward). The new advertising platform also includes permission-based follow-up interaction between viewers and advertisers. Cox digital cable subscribers use the digital remote control and set-top box equipment already installed in their homes to view the programming and respond to advertisers.

"As television and advertising communities are looking for new models for advertising-supported television, Cox is proud to harness its own new technology into a service that is beneficial to subscribers and to advertisers," said Billy Farina, vice president of advertising sales for CableRep Advertising, the advertising arm of Cox Communications. "In our FreeZone, subscribers will find a variety of content that is both entertaining and informative; we are poised to prove that consumers will not only watch commercial-supported information and long format advertising, but also choose to do so with premeditation."

Industry leaders concur that the time is right for a model like the FreeZone. "It is clear that increased and unprecedented control over programming and commercial messaging is the future of television," said Tim Hanlon, vice president/director of emerging contacts, Starcom MediaVest Group, the media agency holding company of B\Com3 Group, Inc.

Cox's FreeZone trial offers initial advertisers the chance to experiment in the new television environment; it enables them to express commercial messages in new formats, unconstrained by traditional 30- or 60-second time limitations. The on-demand content may be long format or alternatively what some call "advertainment," highly entertaining videos featuring products.

The interactive nature of the platform also gives the advertiser the opportunity to elicit requests for direct response, which could be as simple as electing to receive a coupon through the mail or something more involved, like requesting a follow-up phone call to receive a quote. Global Guard/Satellite Security Systems, LLC, a satellite-enabled car protection company, has four different advertising pieces including a corporate backgrounder and another piece developed to dispel myths about one of Global Guard's competitors. Global Guard is offering customers the chance to opt-in for a coupon worth $100 off of their retail prices. "The video on demand network brings us the ability to get a complicated story out to the public in a very efficient manner. We are very excited about this new medium and what it can do for our marketing efforts," said John Phillips, president and chief operating officer, Satellite Security Systems, LLC.

Whatever the offer, Cox has taken great care to safeguard the privacy of its subscribers. The permission-based direct response component involves a double opt-in procedure (see companion technical release for additional details).

Cox customers will find a variety of content in the FreeZone. Below is an initial sampling:

-- The Coca-Cola Company is promoting Diet Coke with "What's Your 20?"

-- Sony Music is promoting artists on its Epic Records label by offering access to videos and other information.

-- Volvo is unveiling its new SUV and is also providing a beautiful and entertaining sailing expedition that allows the company to make a lifestyle connection with potential customers.

-- The San Diego Zoo and the San Diego Wild Animal Park are offering viewers an on-demand tour and an educational piece on conservation.

-- The San Diego Spirit is presenting a soccer tutorial featuring members of the team.

-- Cox is sponsoring on-demand viewing of San Diego Insider, a locally produced television news magazine show.

-- Salomon Sports is offering inline skate videos ranging from aggressive street skating featuring international team athletes to the new movement in inline skating--freeskate.

Enthusiasm for the learning to be gained from FreeZone is high among the initial advertisers. "Building on Kraft's leadership in adopting new media marketing technologies, we look forward to learning more about the role of advertising in VOD by participating in the FreeZone," said Nancy Dennis, senior director of strategic alliances at Kraft.

"Video on Demand fits perfectly with Volvo's philosophy of providing services that cater to customer choice. From Volvo Ocean Race entertainment content to in-depth information on the new Volvo XC90 SUV, our customers and prospects get to see what they want, when they want it," said Phil Bienert, manager, CRM and future product strategy, Volvo Cars of North America, LLC. "It is exciting to see Cox deploy such a robust and engaging advertising platform. We believe that video on demand is a very important technological development in advertising, particularly for the automotive category," said Kirt Gunn, president of Cylo who worked with Volvo on their FreeZone effort.

"We at The Coca-Cola Company are always looking for new ways to enhance the connections between people and our brands, and Cox's VOD initiative is a great platform for innovating how we will entertain and interact with people in the future," said David Raines, vice president integrated communications, Coca-Cola North America.

Universal McCann (UM), the media planning and buying arm of McCann-Erickson Worldgroup, has clients The Coca-Cola Company and Sony Music's Epic Records in the FreeZone. "Our collaborative work with Cox in the FreeZone provides UM and its clients with a living laboratory that will enable us to glean valuable insight into consumer reaction to the evolving on-demand and interactive television universe, while developing and testing new models for advertiser supported home entertainment," said Mitch Oscar, senior vice president-director of UM Futures.

About Cox Communications

Cox Communications (NYSE: COX), a Fortune 500 company, is a multi-service broadband communications company serving approximately 6.3 million customers nationwide. Cox is the nation's fifth-largest cable television provider, and offers both traditional analog video programming under the Cox Cable brand as well as advanced digital video programming under the Cox Digital Cable brand. Cox provides an array of other communications and entertainment services, including local and long distance telephone under the Cox Digital Telephone brand; high-speed Internet access under the brands Cox High Speed Internet and Cox Express; and commercial voice and data services via Cox Business Services. Cox is an investor in programming networks including Discovery Channel. More information about Cox Communications can be accessed on the Internet at www.cox.com.