Shaw 2011 Annual Report Download - page 12

Shaw Communications Inc.
MANAGEMENT’S DISCUSSION AND ANALYSIS
August 31, 2011
Cable Television
The Company’s initial core business was cable television services, which today provides the
customer base and physical infrastructure for much of the Company’s distribution service
businesses. The Company is one of the largest cable television providers in Canada. As at
August 31, 2011, Shaw served approximately 2.3 million cable television customers in five
provinces (British Columbia, Alberta, Saskatchewan, Manitoba and certain portions of Ontario),
representing approximately 32% of the Canadian cable television market.
The Company’s cable television business is operated through its extensive fibre optic and
co-axial cable distribution network. Shaw’s fibre backbone and interconnect network link its
cable systems and subscribers together. Shaw receives originating television signals at its
head-end sites and re-transmits these signals via its network to customers’ homes in its cable
serving areas. Digital cable customers receive additional services via digital cable terminals
(“DCTs”) which translate encrypted signals delivered to customers’ homes over Shaw’s network.
Digital cable significantly expands the range of services that may be offered to a subscriber and
extends programming capacity. Digital cable, which is delivered by the Company’s network to
DCTs deployed in subscribers’ premises, also enhances picture and sound quality and provides
the platform from which Shaw has launched, and expects to continue to be able to launch, new
revenue-generating video and interactive services. Shaw offers customers a variety of DCTs for
purchase or rent.
To its Digital subscribers, Shaw also offers On Demand viewing options, including impulse
Pay-Per-View (“PPV”) and Video-on-Demand (“VOD”) services. The PPV service allows
customers to select and pay for specific programs which are available on various channels with
different start times. The VOD service enables customers to select programming from a library
of titles through an on-line ordering system or directly through the interactive program guide,
and to view the programming on their television at a time of their choosing, with pause, skip
backward and skip forward functionality. On Demand programming includes movies, sports,
concerts and other special events, with prices dependent on the nature of the programming.
Shaw also offers a wide variety of free On Demand programming including hit TV series, movies,
events, music videos and more. Shaw offers On Demand programming in over 98% of its
footprint.
As at August 31, 2011 the Company had approximately 1,820,000 Digital subscribers,
representing a penetration rate of over 79% of Basic cable subscribers. Of the Digital
customers, over 910,000 have HD capabilities. Shaw continues to launch HD channels which
offer superior picture detail and sound quality in a format that fully utilizes the capabilities of
wide screen, HD ready televisions. In support of HD, Shaw offers for purchase or rent DCTs
which support the decoding and processing of HD content, as well as DCTs which incorporate
HD and Personal Video Recorder (“PVR”) features.
Internet
Leveraging its cable television infrastructure, Shaw provides high-speed Internet access services
to residential and small business subscribers in almost all of its operating areas. The Company
currently offers a wide variety of residential Internet service levels to match the speed, usage
and budget requirements of its subscribers. Similar to its residential Internet service, Shaw also
offers a variety of Internet services for small and medium business customers. As at
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