Press release: 1994-11-30: Sega Channel test a success -- service prepares for national rollout in December

From Sega Retro

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Language: English
Original source: The Free Library

Sega Channel test a success -- service prepares for national rollout in December; Final test results far exceed expectations.

NEW YORK, April 14 /PRNewswire/ -- Sega of America, Inc., Time Warner Entertainment Company, L.P., and Telecommunications Inc. (TCI) today announced plans to form a joint venture to develop and market "The Sega Channel," offering Sega Genesis owners access to a large library of video games via cable television.

ANAHEIM, Calif.--(BUSINESS WIRE)--Nov. 30, 1994--Sega Channel SM/TM announced today that it has successfully completed testing its service and begins rolling out nationwide in early December.

Preliminary results from a comprehensive research study show that a large percentage of Sega Channel subscribers are upgrades from basic cable, and that a significant portion are first-time cable subscribers. The study also shows that the satisfaction level among Sega Channel subscribers is extraordinarily high.

Making the announcement at the Western Cable Show in Anaheim, Stanley B. Thomas Jr., president and CEO of Sega Channel, said that the study found an overwhelming 37 percent of Sega Channel subscribers are upgrades from basic only and that 8% of respondents were first-time cable subscribers. Findings also show an astounding 99 percent of Sega Channel subscribers positively rating the convenience of service and 91 percent agreeing that it is a very good value.

"We're very excited about the test results. Sega Channel has performed even better than our expectations in virtually every area researched -- from subscriber satisfaction to perceived value," said Thomas.

Research was conducted over the past several months in Sega Channel's 12 test markets -- TCI Cablevision of Texas Inc. (Beaumont); TCI of New York Inc. (Buffalo); Capitol Cablevision (Charleston, W.V.); Cablevision of Gastonia (North Carolina); TCI Cablevision of Wyoming Inc. (Cheyenne): TCI Cablevision of Mid-Michigan Inc. (East Lansing); TCI Cablevision of Alabama Inc. (Hoover); Time Warner Cable (Nashua, N.H.); TCI Cablevision of Oregon Inc. (Portland); Warner Cable of Reston (Virginia); American Cablevision (St. Louis, MO); and TCI Cablevision of Walnut Creek (California).

The whole family plays Sega Channel. Results show that two-thirds of Sega Channel households have children, compared to 41 percent for the average cable home. Slightly more than half of the channel's primary players are children under 17, but the channel also attracts older players, with 36 percent between 18 and 35 years old and 10 percent over 36. Even seniors have found value in the service. According to Betty B., 66 years old, of St. Louis, Mo., "It's great entertainment and hours of fun."

Research suggests that subscribers are highly involved with the interactive service. 72 percent report playing Sega Channel several times a week, or even daily, for an average of 1.9 hours a day. Subscribers are so enthusiastic about the service that 8 percent purchased a Sega Genesis (TM) machine expressly to play the Sega Channel.

The study also finds that Sega Channel subscriptions positively impact retail sales. In fact, research demonstrates that purchase activity for Sega Channel subscribers goes up 35 percent between month one and month two of service, and actually goes down 30 percent for non-subscribers for the same time period.

In only three months, several test systems have exceeded 3 percent penetration, and one system even reached a 5 percent penetration rate.

Thomas pointed to a rapid gain in new affiliates and said it demonstrates that cable operators view Sega Channel as a highly profitable unregulated revenue source.

Sega Channel will be available in December in Pittsburgh and State College, Pa.; Houston and Galveston, Texas; Arnold, St. Charles and St. Louis, Mo.; Muskogee and Tulsa, Okla.; Wichita, Ks.; East Lansing, Mich.; Cheyenne, Wyo.; Beaumont/Port Arthur, Texas; Buffalo, N.Y.; St. Louis, Mo.; Portland, Ore.; Walnut Creek, Calif.; Jamestown and Mt. Vernon, N.Y.; and Keene, N.H. Sega Channel will be available in January in such major markets as Chicago, Seattle, Indianapolis, the Bay Area, Hartford, Conn. and South Bend, Ind.

In the first year of service, charter affiliates, which include top MSO's TCI, Time Warner, Prime, Adelphia, Viacom and Sammons, will deliver Sega Channel to approximately 20 million basic cable subscribers.

"We're off to a terrific start. With a list of affiliates that represent over 50 percent of the total U.S. cable households, Sega Channel is making cable TV history," said Thomas.

Sega Channel, developed by Sega of America, Tele-Communications Inc. and Time Warner Entertainment Co. L.P., is the industry's first interactive service, providing Sega Genesis video games on demand, 24 hours a day. Sega Channel subscribers will choose from a wide selection of popular Genesis games such as Earthworm, Jim and Sonic and Knuckles, special version of soon-to-be-released titles, gameplay tips, news, contests and promotions. Sega Channel will be priced in the range of most premium subscription services. The programming will be updated monthly.


Jennifer Moffie, 212/767-4607
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