Washington Post 2005 Annual Report Download - page 35

network began to make certain of their television programming available on a fee-per-episode basis for downloading over
the Internet to video-enabled iPod players. In January 2006 Google announced that it would soon launch a similar fee-
based service that would distribute certain programming from the CBS television network, the National Basketball
Association and other sources for viewing on personal computers as well as portable video players. If these types of
services become popular, they could become a competitive factor for both the Company's television stations and, with
respect to the conventional delivery of television programming, the Company's cable television systems. Such services
could also present additional revenue opportunities for the Company's television stations from the possible distribution on
such services of the stations' news and other local programming.
Cable television systems operate in a highly and increasingly competitive environment. In addition to competing with the
direct reception of television broadcast signals by the viewer's own antenna, such systems (like existing television stations)
are subject to competition from various other forms of video program delivery. In particular, DBS services (which are
discussed in more detail in the preceding paragraph) have been growing rapidly and are now a significant competitive
factor. The ability of DBS operators to provide local-into-local service (as described above) has increased competition
between cable and DBS operators in markets where local-into-local service is provided. DBS operators are not required to
provide local-into-local service, and some smaller markets may not receive this service for several years. However, local-
into-local service is currently being offered by both DirecTV and EchoStar in most markets in which the Company provides
cable television service. In December 2003 News Corporation (""News Corp.''), a global media company that in the
United States owns the Fox Television Network, 35 broadcast television stations, a group of regional sports networks and
a number of nationally distributed cable networks (including the Fox News Channel, FX, the Fox Movie Channel, the Speed
Channel and Fox Sports Net), acquired a controlling interest in DirecTV. This acquisition was approved by the FCC in an
order that, among other things, requires News Corp. to offer carriage of its broadcast television stations and access to its
cable programming services to cable television systems and other multichannel video programming distributors on
nonexclusive and nondiscriminatory terms and conditions. Notwithstanding the requirements imposed by the FCC, this
acquisition has the potential not only to enhance DirecTV's effectiveness as a competitor, but also to limit the access of
cable television systems to desirable programming and to increase the costs of such programming. Certain of the
Company's cable television systems have also been partially or substantially overbuilt using conventional cable-system
technology by various small to mid-sized independent telephone companies, which typically offer cable modem and
telephone service as well as basic cable service. At the end of 2005, such overbuilt systems accounted for approximately
4% of the Company's total number of basic video subscribers at that date. The Company anticipates that some
overbuilding of its cable systems will continue, although it cannot predict the rate at which overbuilding will occur or
whether any major telephone companies like Verizon, Quest or AT&T will decide to overbuild any of its cable systems.
Even without constructing their own cable plant, local telephone companies can also compete with cable television systems
in the delivery of high-speed Internet access by providing DSL service. In addition, some telephone companies have
entered into strategic partnerships with DBS operators that permit the telephone company to package the video
programming services of the DBS operator with the telephone company's own DSL service, thereby competing directly with
the video programming and cable modem services being offered by existing cable television systems. Finally, DBS
operators, telephone companies and others may also be able to compete with cable television systems in providing high-
speed Internet access by using a relatively new wireless technology known as WiMAX.
According to figures compiled by Publishers' Information Bureau, Inc., of the 244 magazines reported on by the Bureau,
Newsweek ranked sixth in total advertising revenues in 2005, when it received approximately 2.1% of all advertising
revenues of the magazines included in the report. The magazine industry is highly competitive, both within itself and with
other advertising media that compete for audience and advertising revenue.
PostNewsweek Tech Media's publications and trade shows compete with many other advertising vehicles and sources of
similar information.
Kaplan competes in each of its test preparation product lines with a variety of regional and national test preparation
businesses, as well as with individual tutors and in-school preparation for standardized tests. Kaplan's Score Education
subsidiary competes with other regional and national learning centers, individual tutors and other educational businesses
that target parents and students. Kaplan's Professional Division competes with other companies that provide alternative or
similar professional training, test preparation and consulting services. Kaplan's Higher Education Division competes with
both facilities-based and other distance learning providers of similar educational services, including not-for-profit colleges
and universities and for-profit businesses. Overseas, each of Kaplan's businesses competes with other for-profit companies
and, in certain instances, with governmentally supported schools and institutions that provide similar training and
educational programs.
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