Digital coupons are selectively transmitted in a communication network to subscriber terminals for promotional purposes. Subscribers automatically receive coupon credits when they meet the preconditions of the digital coupons. Free or reduced price pay-per-view (PPV) programming in particular may be provided when a subscriber purchases a given number of PPV programs at a regular price. The terminals maintain a running balance of available coupon credits and inform the subscriber via a user interface of the available balance. Subscribers can be rewarded for viewing commercial messages by awarding coupons which can be immediately redeemed for PPV programs. With an optional report back capability, terminal usage pattern data can be retrieved and analyzed by program service providers to determine the effectiveness of the promotions and to gather additional demographic and individual data. The integrity of the scheme is assured with encryption techniques.