Time Warner Cable 2006 Annual Report Download - page 10

Products and Services
TWC offers a variety of services over its broadband cable systems, including video, high-speed data and voice
services. TWC markets its services separately and as “bundled” packages of multiple services and features.
Increasingly, TWC’s customers subscribe to more than one of its services for a single price reflected on a single
consolidated monthly bill.
Video Services
TWC offers a full range of analog and digital video service levels, including premium services such as HBO
and Showtime, as well as advanced services such as VOD, HDTV, and set-top boxes equipped with digital video
recorders (“DVRs”). The following table presents selected statistical data regarding TWC’s video services:
2004 2005 2006
As of December 31,
(in thousands, except
percentages)
Homes passed
(1)
......................................... 15,977 16,338 26,062
Basic subscribers
(2)
....................................... 9,336 9,384 13,402
Basic penetration
(3)
....................................... 58.4% 57.4% 51.4%
Digital subscribers ....................................... 4,067 4,595 7,270
Digital penetration
(4)
...................................... 43.6% 49.0% 54.2%
(1)
Homes passed represent the estimated number of service-ready single residence homes, apartment and condominium units and
commercial establishments passed by TWC’s cable systems without further extending TWC’s transmission lines.
(2)
Basic subscriber amounts reflect billable subscribers who receive basic video service.
(3)
Basic penetration represents basic subscribers as a percentage of homes passed.
(4)
Digital penetration represents digital subscribers as a percentage of basic video subscribers.
Analog services. Analog video service is available in all of TWC’s operating areas. TWC typically offers two
levels or “tiers” of service — Basic and Standard — which together offer, on average, approximately 70 channels
for viewing on “cable-ready” television sets without the need for a separate set-top box.
• Basic Tier — generally, broadcast television signals, satellite delivered broadcast networks and super-
stations, local origination channels, and public access, educational and government channels; and
• Standard Tier — generally includes national, regional and local cable news, entertainment and other
specialty networks, such as CNN, A&E, ESPN, CNBC and MTV.
TWC offers its Basic and Standard tiers for a fixed monthly fee. The rates TWC can charge for its “Basic” tier
and certain video equipment are subject to regulation under federal law. See “— Regulatory Matters.”
In certain areas, TWC’s Basic and Standard tiers also include proprietary local programming devoted to the
communities TWC serves. For example, TWC provides 24-hour local news channels in the following areas: NY1
News and NY1 Noticias in New York, NY; News 14 Carolina in Charlotte, Greensboro and Raleigh, NC; R News in
Rochester, NY; Capital News 9 in Albany, NY; News 8 Austin in Austin, TX; and News 10 Now in Syracuse, NY. In
most of these areas, these news channels are available exclusively on TWC’s cable systems.
As of December 31, 2006, 51.4% of TWC’s homes passed, or 13.4 million subscribers, subscribed to its basic
services and, in the Legacy Systems, 56.7% of TWC’s homes passed, or 9.5 million subscribers, subscribed to its
basic services. Although basic video subscriber penetration levels have generally been lower in the Acquired
Systems, TWC believes it has an opportunity to increase the number of basic video subscribers in the Acquired
Systems.
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