Time Warner Cable 2008 Annual Report Download - page 16

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Services
TWC offers residential and commercial video, high-speed data and voice services over its broadband cable systems.
Residential Services
Video Services
Programming tiers. TWC offers three main levels or “tiers” of video programming—Basic Service Tier
(“BST”), Expanded Basic Service Tier (or Cable Programming Service Tier) (“CPST”) and Digital Basic Service
Tier (“DBT”). BST generally includes broadcast television signals, satellite-delivered broadcast networks and
superstations, local origination channels, a few specialty networks, such as C-SPAN and QVC, and public access,
educational and government channels. CPST enables BST subscribers to add to their service national, regional and
local cable news, entertainment and other specialty networks, such as CNN, A&E, ESPN, CNBC and Discovery. In
certain areas, BST and CPST also include proprietary local programming devoted to the communities TWC serves,
including 24-hour local news channels in a number of cities. Together, BST and CPST provide customers with
approximately 70 channels. DBT enables digital video subscribers to add to their CPST service up to approximately
50 additional cable networks, including spin-off and successor networks to national cable services, news networks
and niche programming services, such as History International and Biography. Generally, subscribers to CPST and
DBT can purchase thematically-linked programming tiers, including movies, sports and Spanish language tiers, and
subscribers to any tier of video programming can purchase premium services, such as HBO and Showtime.
TWC’s video subscribers pay a fixed monthly fee based on the video programming tier they receive.
Subscribers to specialized tiers and premium services are charged an additional monthly fee, with discounts
generally available for the purchase of packages of more than one such service. The rates TWC can charge for its
BST service in areas not subject to “effective competition” and certain video equipment, including set-top boxes,
are subject to regulation under federal law. See “—Regulatory Matters” below.
Transmission technology. TWC’s video subscribers may receive service through analog transmissions, a
combination of digital and analog transmissions or, in systems where TWC has fully deployed digital technology,
digital transmissions only. Customers who receive any level of video service at their dwelling or commercial
establishment via digital transmissions over TWC’s systems are referred to as “digital video subscribers.” As of
December 31, 2008, 66% of TWC’s basic video subscribers were digital video subscribers.
Digital video subscribers using a TWC-provided set-top box generally have access to an interactive program
guide, Video on Demand (“VOD”), which is discussed below, music channels and seasonal sports packages. Digital
video subscribers who receive premium services generally also receive “multiplex” versions of these services.
Digital video subscribers will also have access to these services using a television enabled with tru2way
TM
technology, which TWC expects will be made available by third-parties in mid-2009. See “—Technology—Cable
Systems—Set-top Boxes” below.
The following table presents selected statistical data regarding TWC’s video subscribers:
2008 2007 2006
December 31,
(in thousands, except percentages)
Homes passed
(a)
............................................... 26,766 26,526 26,062
Basic video subscribers
(b)
........................................ 13,069 13,251 13,402
Basic video penetration
(c)
........................................ 48.8% 50.0% 51.4%
Digital video subscribers
(d)
....................................... 8,627 8,022 7,270
Digital video penetration
(e)
....................................... 66.0% 60.5% 54.2%
(a)
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 the transmission lines.
(b)
Basic video subscriber numbers reflect billable subscribers who receive at least basic video service.
(c)
Basic video penetration represents basic video subscribers as a percentage of homes passed.
(d)
Digital video subscriber numbers reflect billable subscribers who receive any level of video service at their dwelling or commercial
establishment via digital transmissions.
(e)
Digital video penetration represents digital video subscribers as a percentage of basic video subscribers.
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