Cablevision Systems Corp. NY Group Reports Operating Results (10-Q)

Our high-speed data services business, which accounted for 20% of our consolidated earnings, net of inter-segment eliminations, for the six months ended June 30, 2011, faces intense competition from other providers of high-speed Internet access, including Verizon and AT&T in our New York metropolitan service area and CenturyLink, Inc. in our Bresnan Broadband Holdings, LLC service area. Our growth rate in high-speed data clients and earnings in our New York metropolitan service area has slowed from the growth rates we have experienced in the past due to our high penetration in this service area and from the impact of intense competition. Consequently, our ability to maintain or increase our existing clients and revenue hereafter may continue to be negatively impacted. Should the contingency arise, the regulatory framework for high-speed data service may affect our competitive position.

Our VoIP (Voice over Internet Protocol) offering, which accounted for 13% of our consolidated earnings, net of inter-segment eliminations, for the six months ended June 30, 2011, faces intense competition from other providers of voice services, including carriers just as Verizon and AT&T in the New York metropolitan service area and CenturyLink in our Bresnan Cable service area. We compete primarily on the basis of pricing, where unlimited United States and Canada long distance, regional and local calling, at the same time with certain features for which the incumbent providers charge extra, are offered at one low price. Our growth rate in VoIP (Voice over Internet Protocol) clients and earnings has slowed from the growth rates we have experienced in the past due to our increasing penetration in the New York metropolitan service area and from the impact of intense competition. Consequently, our ability to maintain or increase our existing clients and revenue henceforth may continue to be negatively impacted. Should the contingency arise, the regulatory framework for voice services may affect our competitive position.

The sale of advertising

Newsday's revenue is derived primarily from the sale of advertising and the sale of newspapers. For the six months ended June 30, 2011, advertising earnings accounted for 71% and circulation earnings accounted for roughly 28% of the total earnings of Newsday. Newsday's circulation revenue is derived primarily from home delivery subscriptions of the Newsday daily newspaper, and single copy sales of Newsday at the newsstand or through local retail outlets.

Local economic conditions affect the levels of retail and classified newspaper advertising revenue. General economic conditions, changes in consumer spending, auto sales, housing sales, unemployment rates, job creation, readership and circulation levels and rates all impact demand for advertising. For the three and six months ended June 30, 2011, Newsday experienced a $3,787 and $10,179, respectively, decline in advertising earnings as compared to the comparable period in 2010.

On April 15, 2011, Newsday filed its most recent Publishers statement with the Audit Bureau of Circulation which indicated total circulation for the six months ended March 27, 2011 of roughly 299,000 on weekdays, roughly 283,000 on Saturdays and roughly 362,000 on Sundays. Newsday's total circulation for weekdays, Saturdays and Sundays declined 10.4%, 7.2% and 8.0%, respectively, as compared to the same period in the prior year. Circulation revenue for the three and six months ended June 30, 2011 increased $476 and $1,508, respectively, over the same period in the prior year due primarily to the impact of home delivery subscription price increases, nevertheless the aforementioned decline in total circulation.