With a vision of the next generation of cable service, Time Warner Inc. is looking to provide a number of new features for viewers beyond the home.For example, businesses in the Orlando, Fla., area will be provided video-conferencing capability. Moreover, subscribers will have the capacity to install video phones. Orlando is the first stop in a multibillion-dollar national rollout of TW’s Full Service Network — the company’s fully digital two-way interactive cable system, with upwards of 500 channels to the home. “As you create an electronic network, your customer base grows,” said Geoff Holmes, senior VP of technology at Time Warner. “The way cable was priced, historically, was premier and basic channels. Now, there’ll be entirely new businesses.” During a presentation at Digital World — the weeklong confab at the Beverly Hilton Hotel — the exec outlined the far-reaching significance of the FSN. He also elaborated on the typical interactive home shopping channel, noting that cable viewers will be able to purchase merchandise from the Warner Bros. catalog, including calling up full-motion-videos of some goods. To spur creation of these, and other programs for TV and CD-ROM, Holmes said a conference for software development is being planned, though he gave no specifics. Clearly, the 500,000 Warner Cable subscribers in Orlando will be seeing a number of new features by late 1994. Holmes said it will take 30 months to re-wire the city with a new fiber optic network, or “backbone,” to carry two-way interactive video, telephone and text. The entire Time Warner system of 7 million subscribers nationwide will be completed in five years. There’s a good reason to make the investment. According to Holmes, 40% of the company’s cash flow comes from cable, while the balance is from content, or copyrighted material. “If Time Warner gives higher quality content, customers spend more money,” reasoned Holmes. But it is the ability to tap into the $ 28 billion local access business for phone service that is making Orlando and other cities unique. The recent partnership in the cable operations with U S West, a regional Bell company, is permitting Time Warner to dramatically increase its revenue stream.
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