The Race to be the Triple Play Provider. Chuck Ellis CMO

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1 The Race to be the Triple Play Provider Chuck Ellis CMO

2 Time Warner Cable Today 2 nd largest cable operator in U.S. 19 million homes passed 11 million basic video customers

3 Time Warner Cable Today $7.7 billion in sales 30,000 employees

4 Time Warner Cable Today Fully upgraded fiber backbone 42% digital penetration Highly clustered footprint

5 An Evolving Competitive Landscape

6 The U.S. telecommunications industry was once siloed CABLE INTERNET PHONE 22m subs $18 billion 32m subs $6 billion 140m subs $68 billion 11m subs $7.7 billion 8m subs $540 million 55m subs $41 billion 6m subs $6 billion 5m subs $1 billion 22m subs $23 billion

7 And then there was satellite

8 But even then Video was just video.

9 Internet was just internet.

10 And phone was just phone.

11 Today cable isn t just video anymore TRIPLE PLAY PROVIDERS VIDEO INTERNET PHONE + with

12 Competitive Video

13 The Power of the Bundle

14 Why is bundling the right strategy? Competition and the marketplace demand it Bundling has significant benefits for TWC Consumers see value in it

15 Bundling motivates customers to switch providers Source: JD Power

16 Reduce churn, build value 6.0% The Cox Reality 5.0% 5.0% 4.0% 3.2% 3.0% 2.0% 2.6% 2.3% 2.2% 1.9% 1.4% 1.0% 0.0% Digital Cable Only (Kagan) Telephony (Kagan) HSD (Kagan) Video + HSD (Cox) Video + Telephony (Cox) HSD + Telephony (Cox) Video + HSD + Telephony (Cox)

17 Source: Leichtman Research Group, February And cable is the provider of choice Which would you choose for Broadband service? (Among Time Warner households interested in Broadband ) Don t Know 23% Don t Know 23% Cable Cable 32% 32% Wireless Wireless 3% 3% Satellite Satellite 6% 6% Phone Phone 16% 16% Current Current ISP ISP 13% 13%

18 We listened to our customers It would be great for Time Warner Cable to provide all three services. Then you don t have to worry about all three separately. Keep it simple, clear and plain. One company to deal with on one bill means less hassle.

19 Our customers were really looking for Convenience Simplicity Value

20 Digital Cable Delivering the Products That Put Customers in Control

21 Note: Digital Penetration is to Basic Subscribers; Represents managed subscribers Digital Cable Digital subscriber growth Subscribers in Millions Basic Subs Digital Subs Penetration % % % % % % Q % 80% 60% 40% 20% 0%

22 Video On Demand VOD Roll-out December 2001: 5 divisions launched January 2003: Every Division capable of delivering VOD 31 Divisions 3,900,000 HH 5 Divisions 927,000 HH December 2001 January 2003 VOD Enabled Divisions

23 Video On Demand Movies On Demand Favorites On Demand Premiums On Demand Digital Video Recorder

24 VOD/MOD Roll-out In Q2 04, VOD revenue increased 40% from 03 Approximately 50% of digital customers bought an MOD in Q2 04, up 48% from prior year MOD users in Raleigh have increased over 75%

25 Movies On Demand Video

26 Digital Video Recorder DVR subscriber growth Subscribers in Thousands DVR Subs Penetration 13% 10% 8% 0% 1% 36 2% 91 4% 155 6% Q302 Q402 Q103 Q203 Q303 Q403 Q104 Q204 Note: DVR penetration is to Basic subscribers; Represents managed subscribers Source: Various company and external research

27 Digital Video Recorder Video

28 High Definition Television HDTV subscriber growth Subscribers in Thousands HDTV Subs Penetration 7% 6% 328 5% 277 1% 34 2% 64 3% 100 3% 124 4% Q302 Q402 Q103 Q203 Q303 Q403 Q104 Q204 Note: HDTV penetration is to Basic Subscribers; Represents managed subscribers

29 Answers On Demand icontrol Simple on-screen guide of help topics Getting Started Interactive video tutorials Learn how to use Answers On Demand. Press the PLAY button on your remote control now to start. Pause, fast forward and rewind Getting Started Remote Control Program Guide Parent

30 AonD Video

31 High Speed Online

32 High Speed Online HSO subscriber growth Dollars in Millions HSD Revenue Penetration of Eligible Homes Passed 17% 14% $1,422 10% $1,009 6% $536 $ Note: Revenue represents consolidated subscribers; Penetration represents managed subscribers

33 Road Runner

34 HSO Tiering RoadRunner Premium Service Speed: Up to 6Mbps down/512kbps up Price: $64.95 to $84.95 depending on bundle RoadRunner Flagship Service Speed: Up to 3Mbps down/384kbps up Price: $44.95 a la carte, $39.95 bundle and current acquisition offer is 6 $29.95 HSD Lite Service Speed: Up to 384kbps down/128kbps up Price: $22.95 to $29.95 Currently used as retention tool only

35 Digital Phone Telephone made simple

36 Simple offer, simple message All-in monthly pricing Unlimited calling Competitive rates Standard features

37 Key consumer considerations Easy to buy No catches

38 Phone Features Privacy & Security Premium Premium/ Enhanced Messaging Portal Feature Provisioning Portal Subscriber Provisioning Call Return *69 Speed Dial Anonymous Call Reject LD Dialing Customer Originated Trace (*57) Anonymous Call Control Selective call accept and reject Priority call ringing Distinctive ring Message Waiting on TV Voice Dial Busy Redial Choice of area code Wireless incoming intercept to home Three way calling notification receipt of voice mail Web based parental controls of features, mailboxes and other option selecting Polyphonic tone integration Call Screening Ring Back Tones Celebrity greetings Family mailboxes Add, Change Remove Features and settings Review features and settings Review of voice mail features, options and messages Customer can sign up for initial services or add and change services to existing account.

39 Rapid growth passing other VoIP offerings Every Division active by January 2005 Rapid growth in penetration Adding 1200 new customers per day High customer satisfaction 87% satisfaction in launch market

40 Who Will Win The Race

41 TWC is best positioned to win the race Consumers give TWC permission to offer video, high speed online and phone Migrating customers to a broader relationship with the company increases loyalty Convenience, simplicity, value

42 How TWC use to identify itself Identification of TWC Website Design Products and Services The strength of the TWC brand was diluted by inconsistent presentation of our brand Current naming practices were far too complex Our products and services lacked strong ties to the Time Warner Cable brand

43 Our Brand Architecture A framework for communicating with the market Answers key questions about our company, brand, and product portfolio Guidelines for future brand management

44 Our Visual Identity System communicates convenience, simplicity and value Keep it simple, clear and plain and don t get too technical. In this day and age we re bombarded by too many logos.

45 Visual Identity System in action

46 Visual Identity System in action

47 TWC has sustainable competitive advantage DBS s inability to offer on demand service DBS/Telcos -- cobbled together bundling Unique products and services across video, internet and phone

48 TWC is best positioned to win the race Reducing mental static is a benefit that can increase the value of a service

49 TWC is best positioned to win the race Reducing mental static is a benefit that can increase the value of a service

50 Ready & Waiting Video

51 What the future holds

52 Digital Navigator TWC Guide Main Menu (Access) Network Express (Shortcuts) Impulse Upsell Find Shows Keyboard Search Caller ID and Call List Impulse Upgrade Whole House MOD 1 buy/all TVs Multi-Room DVR 1 DVR/all TVs

53 Digital Navigator Video

54 News On Demand CNN QuickCast 1-2 minute On Demand clips Spotlight local and regional news Content is regularly updated Compliments broadband distribution via Road Runner portal Provides viewers the ability to get quick updates on the news and content that interests them most.

55 Promotions On Demand New Shows Networks can promote new seasons and shows New Movies New release theatrical trailers can be watched On Demand New Services Time Warner can market their new capabilities for cable, broadband and HD Advertising Networks and advertisers can present long-form promotions On Demand Networks have the option of including promotions to be presented On Demand.

56 On Demand Portals Entertainment Kids Sports Lifestyle New & Info Cable Favorites Music Cutting Edge International Easy access to On Demand Leverages traffic to effectively promote new TWC Video On Demand offerings and special events. Creates simple destinations for viewers to find topical entertainment.

57 DVDs On Demand Buy the Harry Potter DVD and watch it now! This service gives customers the ability to order and immediately watch a movie using On Demand, the same day it is released on DVD then receive a DVD of that film in the mail a few days later. DVD Categories: - Movies - TV Shows - Kids/Family - Sports & Fitness - Music - Special Interests Watch it and own it.

58 Start Over Restart The Wire This feature can only be accessed while the show is airing and offers the viewer one play until expiration. Limited Time-Shift Control No Ad Skip No Fast Forward TWC records schedule daily and all content is deleted overnight. Allows viewers to restart their shows during the broadcast window.

59 Mobile Phone Mobile Phone is Coming TWC has an active strategy for digital mobile phone service The product is in development The industry will move toward the quadruple play by adding mobile phone service

60 Cross Platform Products VOIP Home Networking Photo Sharing Interactive Video Games Music Customer Care VOD, SVOD DVR Digital PPV Photo Sharing Games HDTV

61 How we expect to deliver on the promise Innovation, not price Smart marketing Great customer care

62 Who will win the race? It s the company who makes it all about the customer. THANK YOU.

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