Time Warner Cable 2006 Annual Report Download - page 12

• Start Over — uses TWC’s VOD technology to allow digital video customers to conveniently and instantly
restart select programs then being aired by participating programming services. Users cannot fast forward
through commercials while using Start Over, so traditional advertising economics are preserved for
participating programming vendors. Introduced in TWC’s Columbia, South Carolina, division in 2005,
TWC deployed this service in several areas during 2006 and expects to introduce it more broadly in 2007.
TWC charges for most of the movies that are made available in its Movies-on-Demand service on a per-use
basis, but its subscription video-on-demand (“SVOD”) services are generally included in premium packages or are
made available as part of a separate package of SVOD services.
DVRs. Set-top boxes equipped with digital video recorders are available for a fixed monthly fee. These set-
top boxes enable customers to:
• pause and/or rewind “live” television programs;
• record programs on a hard drive built into the set-top box by selecting the program’s title from the interactive
program guide rather than by start and stop times;
• pause, rewind and fast-forward recorded programs;
• automatically record each episode or only selected episodes of a particular series without the need to
reprogram the DVR;
• watch one show while recording another;
• record two shows at the same time; and
• set parental controls on what can be recorded.
Initially introduced in 2002, TWC currently offers its DVR product to its digital video subscribers in all of the
Legacy Systems. As of December 31, 2006, 34.0%, or approximately 2.5 million, of TWC’s digital video
subscribers also received a DVR set-top box. Although penetration levels for DVRs have been lower in the
Acquired Systems, TWC believes it has an opportunity to increase the number of DVR subscribers in the Acquired
Systems. TWC charges an additional monthly fee for DVR set-top boxes over and above the normal set-top box
charge. The monthly fee for DVR set-top boxes is subject to regulation. See “— Regulatory Matters” below.
High definition services. TWC generally offers approximately 15 channels of high definition television, or
HDTV, in each of its systems, mainly consisting of broadcast signals and standard and premium cable networks, as
well as HDTV Movies-on-Demand in most of the Legacy Systems. HDTV provides a significantly clearer picture
and improved audio quality. In most instances, customers who already subscribe to the standard-definition versions
of these services, including in the case of broadcast stations those customers who receive only Basic service, are not
charged for the high definition version of the channels. TWC also offers a package of HDTV channels for an
additional monthly fee. Due to a number of factors, during the first quarter of 2007, TWC has experienced, and may
continue to experience during the near term, difficulty in obtaining sufficient quantities of HDTV-capable set-top
boxes to satisfy all consumer requests for such boxes. For more information, see Item 1A, “Risk Factors — Risks
Related to Dependence on Third Parties — TWC may not be able to obtain necessary hardware, software and
operational support.”
Interactive services. TWC’s two-way digital cable infrastructure enables TWC to provide innovative
interactive features and services. Examples of interactive services that TWC offers or is in the process of trialing
or rolling out include:
• Quick Clips — permits TWC’s digital subscribers to view on their televisions a variety of news, weather and
sports content developed for web sites;
• Instant News & More — allows TWC’s customers to gain access to information about the weather, sports,
stocks, traffic, and other relevant data on TV;
• Interactive voting and polling — allows live, on-screen voting to determine the outcome of a television show
such as Bravo’s Top Chef and NBC’s Last Comic Standing, or to simply participate in a poll;
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