Time Warner Accelerates DVR Rollout, Finds Hearty Consumer Appetite

Time Warner Cable rolled out digital video recorders to 338,000 subscribers since last year in a program so successful that the company hasn't needed to market DVR service in Manhattan.

The DVR figures were disclosed Tuesday afternoon by Time Warner Cable Chairman/Chief Executive Officer Glenn Britt, who spoke on the second day of a four-day conference sponsored by investment bank Credit Suisse First Boston in New York City. The 338,000 DVRs in the field at the end of November compares to 251,000 on Sept. 30, the end of Time Warner Cable's third quarter. In September, DVR penetration was 6 percent of Time Warner's subscriber base.

Subscription video on demand (SVOD) grew from 750,000 customers on Sept. 30 to 892,000 at the end of November. High definition television rose from 157,000 to 185,000. Digital cable penetration was 38.6 percent - in 4.21 million homes - compared to 10.9 million basic video subscribers. Time Warner Cable is second only to Comcast among MSOs.

Emerging technology - including SVODs, DVRs, and HDTV - figure in to Time Warner Cable's plans to build revenue in the traditional but mature cable video market. Between added video services and its moves in high-speed data and an agreement announced Thursday with MCI and Sprint regarding Voice over Internet Protocol (VoIP), Time Warner Cable hopes to fend off all comers, including other broadband providers and satellite operators.

The DVR is becoming popular, with excitement building in New York City. Britt told of a store on 23rd Street in New York City where on a recent Saturday, there were two-hour lines to get the DVR box and a self-install kit. And that's without an advertising program. As Britt noted, it's all word of mouth.

"As soon as we get these [DVR] boxes, they're out the door," Britt said.

DVRs have been rolled out in all but one of Time Warner Cable's markets. Already they're planning enhanced DVRs, including a high-definition unit scheduled for sale early next year and a type of networked DVR that is being developed by Scientific Atlantic. It debuted at the recent Western Show.

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