Time Warner Cable 2007 Annual Report Download - page 10

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(e.g., HBO) subscribers receiving services via a TWC-provided digital set-top box generally have access to the
premium service’s On-Demand content without additional fees.
Enhanced TV services. TWC is expanding the use of VOD technology to introduce additional enhancements
to the video experience. For instance, TWC has launched Start Over
TM
, which allows digital video subscribers using
a TWC-provided set-top box to restart select “in progress” programs airing on participating cable networks and
broadcast stations directly from the relevant channel, without the ability to fast-forward through commercials. TWC
received an Emmy
TM
award in 2007 for its Start Over service. Start Over was available to over one million digital
video subscribers as of December 31, 2007, and TWC expects to continue to roll out Start Over in 2008. TWC has
begun rolling out other Enhanced TV features such as Look Back
TM
, which utilizes the Start Over technology to
allow viewing of previously aired programs, and Quick Clips
TM
, which allows customers to view short-form content
tied to the cable network or broadcast station then being watched. TWC is also working to make available Catch Up,
which will allow customers to view previously aired programs they have missed.
DVRs. Set-top boxes equipped with digital video recorders (“DVRs”), among other things, enable customers
to pause and/or rewind “live” television programs and record programs on the hard drive built into the set-top box.
Subscribers pay an additional monthly fee for TWC’s DVR service. As of December 31, 2007, 42%, or
approximately 3.4 million, of TWC’s digital video subscribers also subscribed to its DVR service.
HD television. In its more advanced divisions, TWC offers between 30 and 40 channels of high-definition
(“HD”) television, or HDTV, and expects to add additional HD programming during 2008. In most divisions, HD
simulcasts (i.e., HD channels that are the same as their standard definition counterparts but for picture quality) are
provided at no additional charge, and additional charges apply only for HD channels that do not have standard
definition counterparts. In addition to its linear HD channels, TWC also offers VOD programming in HD.
High-speed Data Services
TWC offers residential high-speed data services to nearly all of its homes passed as of December 31, 2007.
TWC’s high-speed data services provide customers with a fast, always-on connection to the Internet. High-speed
data subscribers connect to TWC’s cable systems using a cable modem, which TWC provides at no charge or which
subscribers can purchase on their own. Subscribers pay a flat monthly fee based on the level of service received.
The following table presents selected statistical data regarding TWC’s residential high-speed data subscribers:
2007 2006 2005
December 31,
(in thousands, except percentages)
Homes passed
(1)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,248 25,691 16,227
Residential high-speed data subscribers
(2)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,620 6,644 4,141
Residential high-speed data penetration
(3)
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29.0% 25.9% 25.5%
(1)
Homes passed represent the estimated number of high-speed data service-ready single residence homes, apartment and condominium
units and commercial establishments passed by TWC’s cable systems without further extending the transmission lines.
(2)
Residential high-speed data subscriber numbers reflect billable subscribers who receive TWC’s Road Runner
TM
high-speed data service or
any other residential high-speed data service offered by TWC.
(3)
Residential high-speed data penetration represents residential high-speed data subscribers as a percentage of homes passed.
Road Runner. TWC offers four tiers of its Road Runner high-speed data service in virtually all of its systems:
Turbo
TM
, Standard, Basic and Lite. The tiers offer different speeds at different monthly fees. Turbo offers
subscribers speeds of up to 15 mbps downstream.
TWC’s Road Runner service provides communication tools and personalized services, including e-mail, PC
security, parental controls, news groups and online radio, without any additional charge. The Road Runner portal
provides access to content and media from local, national and international providers and topic-specific channels,
including games, news, sports, autos, kids, music, movie listings and shopping sites.
High-speed data services are delivered through TWC’s hybrid fiber coax (“HFC”) network, regional fiber
networks that are either owned or leased from third parties and through backbone networks that provide
connectivity to the Internet and are operated by third parties. TWC pays fees for leased circuits based on the
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