Time Warner Cable 2009 Annual Report Download - page 14

to changes in economic, business, competitive, technological, strategic and/or regulatory factors and other factors affecting the operation
of TWC’s business. For more detailed information about these factors, and risk factors with respect to the Company’s operations, see
Item 1A, “Risk Factors,” below and “Caution Concerning Forward-Looking Statements” in “Management’s Discussion and Analysis of
Results of Operations and Financial Condition” in the financial section of this report. TWC is under no obligation to, and expressly
disclaims any obligation to, update or alter its forward-looking statements, whether as a result of such changes, new information,
subsequent events or otherwise.
Available Information and Website
Although TWC and its predecessors have been in the cable business for over 40 years in various legal forms, Time Warner Cable Inc.
was incorporated as a Delaware corporation on March 21, 2003. TWC’s annual report on Form 10-K, quarterly reports on Form 10-Q,
current reports on Form 8-K and any amendments to such reports filed with or furnished to the Securities and Exchange Commission
(“SEC”) pursuant to Section 13(a) or 15(d) of the Securities Exchange Act are available free of charge on the Company’s website at
www.timewarnercable.com as soon as reasonably practicable after such reports are electronically filed with the SEC.
Services
TWC offers video, high-speed data and voice services over its broadband cable systems to residential and commercial customers.
Residential Services
Video Services
TWC offers a broad range of residential video services, including advanced services such as On-Demand, high-definition (“HD”)
and digital video recorder (“DVR”) services. As of December 31, 2009, TWC had approximately 12.7 million residential video
subscribers.
Programming tiers. TWC currently 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 networks, such as CNN, USA and ESPN. 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. DBT enables subscribers who receive digital video signals (“digital video subscribers”) to receive
additional cable networks. Generally, subscribers to any tier of video programming can purchase genre-based programming tiers, such as
movies, sports and Spanish language tiers, and 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. HD simulcasts (i.e., HD channels that are the same as their standard-definition counterparts but for picture quality)
are generally provided at no additional charge, and additional charges generally apply only for HD channels that do not have
standard-definition counterparts. The rates TWC can charge for its BST service and certain video equipment, including set-top boxes, in
areas not subject to “effective competition” are subject to regulation under federal law. See “—Regulatory Matters” below.
On-Demand services. On-Demand services are generally available to digital video subscribers. Available On-Demand services
include a wide selection of featured movies and special events, for which separate per-use fees are generally charged, and free access to
selected movies, programming from broadcast stations and cable networks, music videos, local programming and other content. In
addition, premium service (e.g., HBO) subscribers generally have access to the premium service’s On-Demand content without
additional fees.
DVR service. Set-top boxes equipped with DVRs enable customers, among other things, 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, 2009, 50%, or approximately 4.4 million, of TWC’s digital video subscribers also subscribed to its DVR
service. In 2010, TWC expects to introduce remote DVR management, which will allow customers to program their DVRs via a website
or mobile handset, and a multi-room DVR service, which will allow a program recorded on a DVR to be watched on any television with a
TWC-provided set-top box in a customer’s home.
Network DVR services. TWC is expanding the use of Video On-Demand (“VOD”) technology to introduce additional
enhancements to the video experience. For instance, as of December 31, 2009, Start Over
TM
, TWC’s Emmy-award winning
technology, was available to 79%, or approximately 7.0 million, of TWC’s digital video subscribers. Start Over allows digital
video subscribers using a TWC-provided set-top box to restart select “in progress” programs directly from the relevant channel, without
the ability to fast-forward through commercials. TWC has begun rolling out other Network DVR services such as Look Back
TM
, which
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