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TWC 'Starts Over' in HD

Jeff Baumgartner
2/7/2008
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Hoping to up the high-definition television (HDTV) ante this year, Time Warner Cable Inc. (NYSE: TWC) has launched a hi-def version of “Start Over,” a popular service that lets customers restart shows already in progress.

The MSO has launched Start Over HD in its South Carolina division. "Satellite simply can't offer this,” said Time Warner Cable COO Landel Hobbs yesterday during a call covering the operator’s fourth quarter financial results. (See Time Warner Cable Survives Q4.)

By the end of 2007, Time Warner had introduced Start Over in seven of its 23 divisions, with plans to have it deployed in all systems by the end of 2008. Hobbs did not elaborate on how quickly the MSO expects to deploy the HD version of the Start Over service.

“HD has become a key component of some of our competitors’ marketing, but we are not prepared to [give up] any ground in the HD battle,” Hobbs said, mostly in reference to the hi-def programming efforts of satellite foes such as DirecTV Group Inc. (NYSE: DTV) and Dish Network LLC (Nasdaq: DISH)

Much of Time Warner Cable’s strategy will start in the home, as all set-tops the MSO orders from this point on will be HD-capable, Hobbs said. That strategy, however, could contribute to an HD set-top shortage that reportedly has already affected Verizon Communications Inc. (NYSE: VZ) and Cox Communications Inc.

Time Warner Cable has deals in place to carry 53 HD channels, with agreements pending for another 20. The operator plans to complement those linear offerings with HD-VOD. Today, the operator offers about 50 pay-per-view movies via HD-VOD, with another 80 titles offered for free via its “HD Showcase.” Although it didn’t break down usage between HD and standard-def, Time Warner Cable recorded 1.3 billion VOD views in 2007, an average of 14 views per digital sub per month.

To free up the necessary headroom for all that new HD, Time Warner Cable will continue to lean heavily on switched digital video (SDV), a bandwidth-saving technique that delivers channels in a “switched tier” only when customers in a given user group select them for viewing.

The MSO has SDV launched in nine of its divisions and is “wiring and installing” it in nine more, Hobbs said. “By the end of this year, we plan to have [SDV] launched... in every division that needs it to remain competitive.”

Using SDV, TWC markets such as Albany, N.Y., and San Antonio offer more than 40 hi-def channels, with roughly half of them delivered via switching. Its primary SDV vendor partner is BigBand Networks Inc. (Nasdaq: BBND).

“Switching works, and it will allow us to launch relevant HD content as it comes available,” Hobbs said.

Time Warner Cable is also going all-digital in markets where digital service penetration makes it relatively easy to polish off the transition. TWC president and CEO Glenn Britt noted that its Staten Island system is already there, and he expects the rest of Time Warner Cable's New York systems to finish the migration in the next 18 months or so.

As for other “enhanced TV” features, the MSO would say only that it is testing a “Look Back” service that would expand the availability window that it uses now for Start Over.

All quiet on the wireless front
The MSO didn’t have much new to say about its wireless strategy, which is not a big surprise considering there’s an expansion freeze on the “Pivot” joint venture with Sprint Corp. (NYSE: S). (See Sprint Halts 'Pivot' Expansion.)

“To date, we’ve seen less than incredible demand for that,” Britt said, chalking it up as a “defensive capability.”

“We don’t see it [the Pivot service] as a big thing that we need right now," he added. "Our relationship with Sprint continues to be very good, despite their issues."

— Jeff Baumgartner, Site Editor, Cable Digital News

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