Cablevision Sets Dec. Digital-TV Trial

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Cablevision Systems Corp. will test digital cable in Long Island, N.Y., next month, with a full-scale rollout expected by the second quarter.

Company president James Dolan said the MSO plans to deploy "several thousand" Sony Corp. advanced digital set-top boxes in December and January.

"What we're deploying is not what is being deployed by other cable operators at this time," Dolan told analysts on a conference call after reporting financial results. "This is a significant technological leap over what we have been seeing so far."

Cablevision's digital product would include real-time video-on-demand capabilities, electronic mail and interactive-advertising functions, Dolan added. It will allow customers to view their cable bill and selected online content from Cablevision's New York-centric programming properties via the TV.

For the quarter, Cablevision's revenue rose 14 percent, to $954.4 million, and adjusted operating cash flow rose 7 percent, to $236 million. At the cable operations, revenue was up 7 percent, to $448.2 million, and adjusted operating cash flow rose 10 percent, to $205 million.

Basic subscriber growth was a relatively strong 2.1 percent, to 2.8 million customers.

Dolan stressed those gains were made without a digital product, unlike most of Cablevision's peers.

He added the company's Optimum TV advanced-analog product still sells well: about 584,480 customers have signed on, up from 566,475 in the previous quarter. With digital coming next year, Dolan said he thought the subscriber numbers will get better.

"We anticipate we will be able to take back market share," Dolan said.

Cablevision also had big gains in high-speed data sales. Optimum Online added 46,000 customers in the quarter, to finish with 139,688. Cablevision has one of the highest penetration rates in the industry for high-speed data, with 9.5 percent, Dolan said.

The company has been aggressively marketing a self-install program for high-speed data. So far, about 90 percent of customers are willing to self-install, with more than 80 percent being successful.

Cablevision New York Metropolitan area president Joseph Azznara said about half of modem sales are through Cablevision's own The Wiz retail electronics stores, with about 48 percent coming from direct marketing, via direct mail or phone calls.

Azznara said the company also added an online ordering function in the summer, accounting for about 2 percent of modem sales, and said he has high hopes for stronger online sales in the future.

At Rainbow Media Holdings Inc., cash flow for cable networks American Movie Classics, Bravo and the Independent Film Channel was up 15 percent, to $33 million, and revenue rose 11 percent, to $78.6 million.

Cablevision said separately that a Nov. 10 meeting of shareholders regarding the creation of a Rainbow Media tracking stock would be adjourned for 30 days, until Dec. 8.

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