Cablevision 2011 Annual Report Download - page 31

(25)
websites, mobile-device platforms, broadcast and cable television, radio and direct marketing; particularly
if those media sources provide advertising services that could substitute for those provided by Newsday
within the same geographic area. Specialized websites for real estate, automobile and help wanted
advertising have become increasingly competitive with our newspapers and websites for classified
advertising and further development of additional targeted websites is likely.
Newsday and the newspaper industry generally have also experienced significant declines in advertising
and circulation revenue as circulation and readership levels continue to be adversely affected by
competition from new media news formats and less reliance on newspapers by some consumers as a
source of news, particularly younger consumers. A prolonged decline in circulation would have a
material adverse effect on the rate and volume of advertising revenues.
A significant amount of our book value consists of intangible assets that may not generate cash in the
event of a voluntary or involuntary sale.
At December 31, 2011, we reported approximately $7.1 billion of consolidated total assets, of which
$2.0 billion were intangible. Intangible assets include franchises from city and county governments to
operate cable television systems and goodwill. While we believe that the carrying values of our
intangible assets are recoverable, you should not assume that we would receive any cash from the
voluntary or involuntary sale of these intangible assets, particularly if we were not continuing as an
operating business. We urge you to read carefully our consolidated financial statements contained herein,
which provide more detailed information about these intangible assets.
Programming costs of our cable television systems are increasing and we may not have the ability to
pass these increases on to our subscribers. Disputes with programmers can adversely affect our
relationship with subscribers and lead to subscriber losses.
Programming costs paid by our cable television systems are one of our largest categories of expenses.
These costs have increased rapidly and are expected to continue to increase, particularly with respect to
costs for sports programming and broadcast networks. We may not be able to pass programming cost
increases on to our subscribers due to the increasingly competitive environment. If we are unable to pass
these increased programming costs on to our subscribers, our operating results would be adversely
affected.
We attempt to control our programming costs and, therefore, the cost of our video services to our
customers by negotiating favorable terms for the renewal of our affiliation agreements with programmers.
On certain occasions in the past, such negotiations have led to disputes with programmers that have
resulted in temporary periods where we were not carrying a particular programming service or services.
Such disputes may inconvenience some of our subscribers and can lead to customer dissatisfaction and, in
certain cases, the loss of customers.
Our business is subject to extensive government regulation and changes in current or future laws or
regulations could restrict our ability to operate our business as we currently do.
Our cable television and other telecommunications businesses are heavily regulated and operate pursuant
to detailed statutory and regulatory requirements at the federal, state and local level. See "Item 1.
Business - Regulation". In certain of our service areas, state or local franchising authorities extensively
regulate the basic rates we may charge our customers for certain of our video services in accordance with
FCC rules. The FCC and state and local governments also regulate us in other ways that affect the daily
conduct of our video delivery and video programming businesses, our voice business and our high-speed
Internet access business. In addition, our businesses are dependent upon governmental authorizations to
carry on their operations. See discussion under "Item 1. Business -Regulation".