Cablevision 2011 Annual Report Download - page 30

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Optimum Lightpath also competes with Verizon, AT&T and other competitive local exchange carriers
and long distance companies. We also operate CLECs in each state within the Optimum West service
area (the "Bresnan CLECs"), which compete against ILECs and Century Link. ILECs have significant
advantages over Optimum Lightpath and the Bresnan CLECs, including greater capital resources, an
existing fully operational local network, and long-standing relationships with customers. To the extent
these competitors decide to reduce their prices, future success of our Optimum Lightpath business and our
Bresnan CLECs may be negatively impacted. The trend in business communications has been shifting
from a wired voice medium to a wireless data medium. This trend could also negatively impact the future
growth of Optimum Lightpath if it were to accelerate.
We face significant risks as a result of rapid changes in technology and consumer expectations and
behavior
The Telecommunications services industry has undergone significant technological development over
time and these changes continue to affect our business. Such changes have had, and will continue to
have, a profound impact on consumer expectations and behavior. Our video business faces technological
change risks as a result of the continuing development of new and changing methods for delivery of
programming content such as Internet based delivery of movies, shows and other content which can be
viewed on televisions, wireless devices and other developing mobile devices. A proliferation of delivery
systems for video content can adversely affect our ability to attract and retain subscribers and the demand
for our services and it can also decrease advertising demand on our delivery systems. Our high-speed
data business faces technological challenges from rapidly evolving wireless Internet solutions. Our voice
offerings face technological developments in the proliferation of voice delivery systems including those
based on Internet and wireless delivery. If we do not develop or acquire and successfully implement new
technologies, we will limit our ability to compete effectively for subscribers, content and advertising. In
addition, we may be required to make material capital and other investments to anticipate and to keep up
with technological change. These challenges could adversely affect our business.
Our Newsday business has suffered operating losses historically and such losses are expected to
continue in the future.
Newsday suffered operating losses of $31.7 million for the year ended December 31, 2011 and
$12.6 million for each of the years ended December 31, 2010 and 2009, which included impairments of
indefinite-lived intangible assets, and certain long-lived intangible assets of $11.0 million, $7.8 million,
and $2.0 million in 2011, 2010 and 2009, respectively. Operating losses are expected to continue in the
future. In connection with the formation of a company through which we have an approximate 97.2%
interest in Newsday, its subsidiary, Newsday LLC incurred $650.0 million of indebtedness under a senior
secured loan facility and $630.0 million of the proceeds of these borrowings were paid to Newsday's
former owner, Tribune Company. These borrowings are guaranteed by CSC Holdings. In addition, at
December 31, 2011, Newsday Holdings LLC held $753.7 million aggregate principal amount of senior
notes issued by Cablevision. Newsday LLC has agreed that it will hold Cablevision or CSC Holdings
senior notes or cash balances in excess of the amount of borrowings outstanding under its senior secured
credit facility until it matures.
Demand for advertising, increased competition and declines in circulation affect Newsday.
A majority of the revenues of our Newsday business are from advertising. Expenditures by advertisers
generally reflect economic conditions and declines in national and local economic conditions affect
demand for advertising and the levels of advertising revenue for Newsday.
Newsday operates in a highly competitive market which may adversely affect advertising and circulation
revenues. Newsday faces significant competition for advertising revenue from a variety of media sources.
The most direct source of competition is other newspapers that reach a similar audience in the same
geographic area. Newsday also faces competition from magazines, shopping guides, yellow pages,