Charter 2015 Annual Report Download - page 25

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Approximately 98% of our estimated passings are served by systems that have bandwidth of 550 megahertz or greater and 99%
are two-way activated as of December 31, 2015. This bandwidth capacity enables us to offer digital television, Internet services,
voice services and other advanced video services.
In 2014, we completed our transition from analog to digital transmission of the channels we distribute which allows us to recapture
bandwidth. The all-digital platform enables us to offer a larger selection of HD channels, faster Internet speeds and better picture
quality while providing greater plant security and lower transaction costs.
For set-top boxes, we are implementing a video conditional access strategy utilizing our downloadable security on a set-top box
specified by us which can be manufactured by many different manufacturers. As we roll out downloadable security, we will
utilize the Worldbox, and are introducing Spectrum Guide® in parallel to virtually all box types. Worldbox, by utilizing
downloadable security along with the introduction of Spectrum Guide®, has reduced our incremental set-top box costs and allows
for a consistent service for all of our customers and on all of their televisions with a service that is rich in HD, has modern search
and discovery features and is capable of improved implementation of future enhancements.
Management, Customer Care and Marketing
Our operations are centralized with our corporate office responsible for coordinating and overseeing operations including
establishing company-wide strategies, policies and procedures. Sales and marketing, network operations, field operations, customer
care, engineering, advertising sales, human resources, legal, government relations, information technology and finance are all
directed at the corporate level. Regional and local field operations are responsible for servicing customers and maintenance and
construction of outside plant.
Charter continues to focus on improving the customer experience through enhanced product offerings, reliability of services, and
quality of customer care. We have in-house domestic call centers that handle over 85% of our calls. The centers are managed
centrally to ensure a consistent and satisfying customer experience. We also provide customers with the opportunity to interact
with us through a variety of forums in addition to traditional telephonic communications, including on-line and chat. We utilize
our web portals to enable customers to order and upgrade services, manage their accounts, and leverage tools for self-care. Our
services include a new and improved Internet portal, Charter.net, making it easier for customers to manage their account, seek
self-help and watch TV online.
Our marketing strategy emphasizes our bundled services through targeted direct response marketing programs to existing and
potential customers and increases awareness and value of the Charter brand. In 2014, Charter rolled out Charter Spectrum®, our
new, national brand platform. Charter Spectrum® represents our combined video, Internet and voice offering for residential
customers. This new brand reflects our comprehensive approach to industry-leading products, driven by speed, performance and
innovation. Our marketing organization creates and executes marketing programs intended to increase customers, retain existing
customers and cross-sell additional products to current customers. We monitor the effectiveness of our marketing efforts, customer
perception, competition, pricing, and service preferences, among other factors, to increase our responsiveness to our customers.
Our marketing organization also manages and directs several sales channels including direct sales, on-line, outbound telemarketing
and Charter stores.
Programming
General
We believe that offering a wide variety of programming influences a customer’s decision to subscribe to and retain our cable video
services. We rely on our experience in programming cable systems, which includes market research, customer demographics and
local programming preferences to determine channel offerings in each of our markets. We obtain basic and premium programming
from a number of suppliers, usually pursuant to written contracts. Our programming contracts generally continue for a fixed
period of time, usually from three to eight years, and are subject to negotiated renewal. Some programming suppliers offer financial
incentives to support the launch of a channel and/or ongoing marketing support. We also negotiate volume discount pricing
structures. We have more recently negotiated for additional content rights allowing us to provide programming on-line to our
authenticated customers.
Costs
Programming is usually made available to us for a license fee, which is generally paid based on the number of customers to whom
we make such programming available. Programming costs are usually payable each month based on calculations performed by
us and are generally subject to annual cost escalations and may be subject to audits by the programmers. Programming license