Time Warner Cable 2008 Annual Report Download - page 20

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The following table presents selected statistical data regarding TWC’s customer relationships and double play
and triple play subscribers:
2008 2007 2006
December 31,
(in thousands, except percentages)
Customer relationships
(a)
........................................ 14,582 14,626 14,565
Double play
(b)
................................................ 4,794 4,703 4,647
Double play penetration
(c)
....................................... 32.9% 32.2% 31.9%
Triple play
(d)
................................................. 3,099 2,363 1,523
Triple play penetration
(e)
........................................ 21.3% 16.2% 10.5%
(a)
Customer relationships represent the number of subscribers who receive at least one level of service, encompassing video, high-speed data
and voice services, without regard to the number of services purchased. For example, a subscriber who purchases only high-speed data
service and no video service will count as one customer relationship, and a subscriber who purchases both video and high-speed data services
will also count as only one customer relationship.
(b)
Double play subscriber numbers reflect TWC customers who subscribe to two of TWC’s primary services (video, high-speed data and
voice).
(c)
Double play penetration represents double play subscribers as a percentage of customer relationships.
(d)
Triple play subscriber numbers reflect TWC customers who subscribe to all three of TWC’s primary services (video, high-speed data and
voice).
(e)
Triple play penetration represents triple play subscribers as a percentage of customer relationships.
Cross-platform Features
In support of its bundled services strategy, TWC continues to introduce features that operate across two or
more of its services. For example, TWC provides nearly two-thirds of its digital video subscribers who also
subscribe to its Digital Phone service a Caller ID on TV feature that displays incoming call information on the
customer’s television set, at no extra charge. TWC has also introduced a feature called “PhotoShowTV” in the
majority of its operating areas that gives digital video subscribers who use both a TWC-provided set-top box and
subscribe to TWC’s Road Runner high-speed data service the ability to create and share their personal photo shows
and videos with other TWC digital video subscribers using its VOD technology. In addition, TWC has launched a
website, www.twondemand.com, and an iPhone application, which provide subscribers with access to the entire
catalog of available VOD titles and the ability to conduct various searches, including searching for VOD titles that
are most popular in the subscriber’s local area. In 2009, TWC expects to launch remote DVR management, which
will allow customers who subscribe to TWC’s DVR service to use the Internet to program their DVRs, and a
residential phone web portal, which will allow Digital Phone subscribers to use the Internet to modify Digital Phone
features, make payments and listen to voicemail.
Advertising
TWC earns revenues by selling advertising to national, regional and local customers. As part of the agreements
under which it acquires video programming, TWC typically receives an allocation of scheduled advertising time in
such programming, generally two or three minutes per hour, into which its systems can insert commercials, subject,
in some instances, to certain subject matter limitations. The clustering of TWC’s systems expands the share of
viewers that TWC reaches within a local designated market area, which helps its local advertising sales business to
compete more effectively with broadcast and other media. In addition, TWC has a strong presence in the country’s
two largest advertising market areas, New York, NY, and Los Angeles, CA.
In many locations, TWC has formed advertising “interconnects” or entered into representation agreements
with contiguous cable system operators to deliver locally inserted commercials across wider geographic areas,
replicating the reach of the local broadcast stations as much as possible. TWC also sells the advertising inventory of
certain regional sports programming networks. In addition, TWC’s local cable news channels and VOD offerings
provide it with opportunities to generate advertising revenue.
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