N.Y. Ops Eye an Interactive Future

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New York-The majority of cable subscribers in the No. 1 U.S. market will have digital boxes in their homes within the next few years, according to executives at Cablevision Systems Corp. and Time Warner Cable.

Speaking before the New York chapter of the Cable & Telecommunications Association for Marketing here last week, Cablevision New York metro area president Joe Azznara predicted that at least 65 percent of his subscriber base would have digital boxes within the next three years. That number represents about 3 million homes, he added.

Cablevision plans to switch out all its advanced-analog boxes during that time frame. The company plans a small digital pilot program late this year, followed by a rollout next year.

"DirecTV and all the [direct-broadcast satellite] services present very formidable competition to us," Azznara said. "Their content and picture quality is good. That's why it's important for us not to just match what they're doing, but to get far ahead of them."

Using the two-way broadband platform to provide services that DBS can't offer, such as video-on-demand, will help distinguish digital cable in the marketplace, Azznara added.

Time Warner has already rolled out VOD in three of its markets, president Glenn Britt said. It plans to add an additional 10 to 15 VOD cities next year.

Britt expects digital penetration to hit 15 percent in most Time Warner markets by the end of this year.

Deploying VOD and personal video recorders "is really empowering people's lives and making them more convenient," said E! Entertainment Television president Mindy Herman.

Aside from movies, programmers have "tremendously compelling content" that could work well in an on-demand environment, Herman said. But E!'s goal will be to keep its focus on its 24-hour cable channels, she added.

"You have to be careful not to diminish the power of the brand by putting older programming" for sale in a VOD or SVOD environment, Herman said. "We need to make sure [that] what we put on the new medium speaks to the promise of our brand."

As a programmer, E! is also examining its role in the emerging world of television commerce. Herman believes that E!'s newer Style network can help sell fashion, which may be immune to the kind of price-centered shopping found on the Internet with compact discs and books.

For its part, Cablevision said it wants to be as good as it can be at many elements of t-commerce.

"That's one of the reasons we bought [consumer-electronics retailer] The Wiz," Azznara said. "We want to learn about retail and product fulfillment. We really believe in e-commerce and t-commerce."

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