Charter 2012 Annual Report Download - page 17

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(f) Included within commercial video customers are those in commercial structures, which are calculated on an equivalent
bulk unit (“EBU”) basis. We calculate EBUs by dividing the bulk price charged to accounts in an area by the published
rate charged to non-bulk residential customers in that market for the comparable tier of service. This EBU method of
estimating basic video customers is consistent with the methodology used in determining costs paid to programmers and
is consistent with the methodology used by other multiple system operators (“MSOs”). As we increase our published
video rates to residential customers without a corresponding increase in the prices charged to commercial service
customers, our EBU count will decline even if there is no real loss in commercial service customers.
(g) "Average Monthly Revenue Per Customer" or "ARPU" represents annual revenue for the service indicated, divided by
twelve, divided by the average number of customers for the service indicated during the year.
Video Services
In 2012, residential video services represented approximately 48% of our total revenues. Our video service offerings include the
following:
• Video. All of our video customers receive a package of basic programming which generally consists of local broadcast
television, local community programming, including governmental and public access, and limited satellite-delivered or
non-broadcast channels, such as weather, shopping and religious programming. Our digital video services include a
digital set-top box, an interactive electronic programming guide with parental controls, an expanded menu of digital tiers,
premium and pay-per-view channels, including OnDemand (available nearly everywhere), digital quality music channels
and the option to also receive a cable card. In addition to video programming, digital video service enables customers to
receive our advanced video services such as DVRs and HD television. Premium channels provide original programming,
commercial-free movies, sports, and other special event entertainment programming. Although we offer subscriptions
to premium channels on an individual basis, we offer an increasing number of digital video and premium channel packages,
and we offer premium channels combined with our advanced video services. Customers who purchase premium channels
also have access to that programming OnDemand and increasingly over the Internet.
• OnDemand, Subscription OnDemand and Pay-Per-View. In most areas, we offer OnDemand service which allows
customers to select from 10,000 titles at any time. OnDemand includes HD and three dimensional ("3D") content.
OnDemand programming options may be accessed for a fee on a transactional basis or, in some cases, for no additional
charge. OnDemand services may also be offered on a subscription basis included in a digital tier premium channel
subscription or for a monthly fee. Pay-per-view channels allow customers to pay on a per event basis to view a single
showing of a recently released movie, a one-time special sporting event, music concert, or similar event on a commercial-
free basis.
• High Definition Television. HD television offers our digital customers certain video programming at a higher resolution
to improve picture and audio quality versus standard basic or digital video images. We have invested in switched digital
video (“SDV”) technology and simulcast to increase the number of HD channels offered to more than 100 in substantially
all of our markets.
• Digital Video Recorder. DVR service enables customers to digitally record programming and to pause and rewind live
programming. Charter customers may lease multiple DVR set-top boxes to maximize recording capacity on multiple
televisions in the home. Charter customers also have the ability to program their DVR's remotely via a website.
• Online. Online video offers our customers the ability to watch traditional TV content over the Internet from any Internet
connection in the United States once they are authenticated as a Charter customer. Charter's online offerings include
many of our largest and most popular networks and Charter intends to expand its online capabilities and to continue to
add content in 2013. We also offer a free search and discovery tool which organizes video content already available
online through Charter.net such as HBO Go and EPIX with online content from sites such as Netflix, Amazon and Hulu
into a single online directory which, we believe, makes it easier for customers to find what they want regardless of the
source.
Internet Services
In 2012, residential Internet services represented approximately 25% of our total revenues. Approximately 94% of our estimated
passings have DOCSIS 3.0 wideband technology, allowing us to offer multiple tiers of Internet services with speeds up to 100
Mbps download to our residential customers. Our Internet services also include our Internet portal, Charter.net, which provides
multiple e-mail addresses, as well as variety of content and media from local, national and international providers including