Charter 2003 Annual Report Download - page 23

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‚Digital Video. We oÅer digital video to our customers in several diÅerent service combination
packages. All of our digital packages include a digital set-top terminal, an interactive electronic
programming guide, up to 45 channels of digital music, an expanded menu of pay-per-view channels
and the option to also receive digital packages which range from 4 to 30 additional video channels. We
also oÅer our customers certain digital packages with one or more premium channels of their choice
with ""multiplexes.'' Multiplexes give customers access to several diÅerent versions of the same
premium channel, which are varied as to time of airing (such as east and west coast time slots) or
programming content theme (such as westerns or romance). Some digital tier packages focus on the
interests of a particular customer demographic and emphasize, for example, sports, movies, family or
ethnic programming. In addition to video programming, digital video service enables customers to
receive our advanced services such as VOD and high deÑnition television. Other digital packages
bundle digital television with our advanced services, such as high-speed data services.
High-Speed Data Services
We oÅer high-speed data services to our residential and commercial customers primarily via cable
modems attached to personal computers. We generally oÅer our high-speed data services as Charter High-
Speed Internet
TM
, although in certain markets we oÅer this service in conjunction with a third-party provider.
For our Charter High-Speed Internet service customers, we have a custom start page that is co-branded with
Microsoft Corporation's network of websites, known as MSN», with content modules that we provide,
including, among other things, movie trailers, previews of movies on pay-per-view and VOD, and television
listings. We also oÅer traditional dial-up Internet access in a very limited number of our markets.
In the fall of 2003, we re-priced our high-speed data service, oÅering faster speed and additional features
both as part of a service bundle and as an ""fia la carte'' oÅering. We ended 2003 with 15% penetration of high-
speed data homes passed, up from the 12% penetration of high-speed data homes passed at year-end 2002.
This gave us an annual percentage increase in high-speed data customers of 38% and an increase in high-speed
data revenues of 65% in 2003 compared to year-end 2002. As of September 30, 2003, in most of our systems,
we migrated high-speed data customers to the fastest residential speed available at no additional charge to our
existing high-speed data customers. These customers will remain at that speed without additional charge
through March 2004. At that time, we expect to begin migrating customers to our two-tier oÅerings with new
pricing and new choices of connection speed.
Advanced Broadband Services
We continue to test, evaluate and deploy new advanced services that we believe will provide new revenue
streams to oÅset overall increasing programming costs or enhance our appeal to consumers to counter
competition. These advanced services include:
‚Video On Demand and Subscription Video on Demand. We oÅer VOD service, which allows
customers to access hundreds of movies and other programming at any time with digital picture
quality. In some systems we also oÅer SVOD for a single monthly fee. As of December 31, 2003, we
oÅered VOD in systems serving approximately 850,000 digital video customers. During 2004, we
expect to deploy VOD service in additional systems increasing VOD availability to approximately
1 million digital video customers, or 40% of our digital video customers at year-end 2003. SVOD
service was available in systems serving 680,200 digital video customers at year-end 2003 and we
expect to make it available in systems serving an additional 421,200 digital video customers in the Ñrst
half of 2004.
‚High DeÑnition Television. High deÑnition television oÅers our digital video customers video
programming at a higher resolution than the standard analog or digital video image. As of Decem-
ber 31, 2003, we oÅered high deÑnition television in systems serving approximately 1.3 million digital
video customers. We anticipate increasing high deÑnition service availability during 2004 to systems
serving nearly 2 million digital video customers, or approximately 75% of our digital video customers at
year-end 2003. Our objective for 2004 is to provide at least 8-10 broadcast and cable network high
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