3. Dear Shareholders
BY YEAR-END 2003, CABLEVISION HAD CHARTED A COURSE
for the company’s future. After years of dedicated development, we complet-
ed the rebuild of our extensive broadband network, creating one of the best
and most advanced telecommunications systems in the world. This accom-
plishment makes Cablevision one of the only companies able to offer all its
innovative services to every customer in its footprint.
The completion of our rebuild also brings to an end an era of significant cap-
ital investment. Now, we are able to turn our full attention and resources to
producing steady returns by making incremental investments in revenue-
generating services. Today, Cablevision’s customer bundle includes the
company’s new Optimum Voice digital voice-over-cable service, as well as
our iO: Interactive Optimum digital video and Optimum Online high-speed
Internet services, both of which grew at impressive rates in 2003.
Solidifying Cablevision’s role as a leading provider of high-definition (HD)
programming this past year was Rainbow DBS’s launch of VOOM, a televi-
sion satellite service to meet the demands of today’s rapidly growing, but
underserved, HDTV audience.
We also began laying the groundwork for new investment opportunities for
our shareholders. In late October, we unveiled a plan to create two distinct
companies, each with defined business plans and clear investment charac-
teristics. Remaining with Cablevision will be the telecommunications and
Lightpath businesses, as well as our New York assets, including Madison
Square Garden. Comprising the new entity will be: Rainbow DBS; three of
Rainbow Media’s national entertainment services – AMC, IFC (The
Independent Film Channel) and WE: Women’s Entertainment; and certain
other Rainbow businesses. With the spin-off expected to be completed later
this year, we look forward to offering two compelling investment choices that
reflect the sound strategic position of Cablevision and this newest combina-
tion of Rainbow assets.
Cablevision is committed to delivering value to consumers and shareholders
alike as we continue to shape the industry and secure our future with digital
offerings, while capitalizing on the many opportunities that lay ahead.
3
4. There’s only one New York, and helped to make Cablevision’s national programming options,
Cablevision is serving it better than iO: Interactive Optimum digital such as iO en Español, the indus-
ever. Now, 4.4 million homes in the video offering the fastest-growing try's most comprehensive slate of
New York metropolitan area have service in the company’s history. Spanish-language networks.
complete access to Cablevision’s Ending 2003 with 905,000 cus-
portfolio of services over our new tomers, four times as many as at Another Cablevision success story,
40,000-mile fiber-rich network. the end of 2002, iO now offers our Optimum Online (OOL) high-
These advanced, integrated offer- customers access to a wide array speed Internet offering continues to
Consumer Services
ings simplify life for busy New of networks and powerful new be one of the fastest and most reli-
Yorkers as they communicate in technologies, including: 700 titles able broadband services in the
the nation’s most demanding and of video-on-demand (VOD) con- nation. OOL ended 2003 with 1.1
attractive business and entertain- tent available at all times; 14 HD million customers, up 37 percent
ment marketplace. programming services, featuring from year-end 2002. The service also
the industry’s first and only HD saw its industry-leading penetration
In 2003, our telecommunications VOD offering; groundbreaking rate of homes-passed increase to 24
services division, which includes interactive applications; and inter- percent by year-end 2003.
the company’s analog and digital
video, high-speed data, voice and Three out of four people in Cablevision’s footprint
Lightpath commercial telecommu- who subscribe to a high-speed data service are
nications businesses, capitalized Optimum Online customers.
on the success of our superior
LITCHFIELD
network, recording a 12 per- DUTCHESS
ULSTER
cent increase in net revenue.
CONNECTICUT
NEW YORK
Meanwhile, the total combined PUTNAM NEW HAVEN
ORANGE
number of video, data and voice FAIRFIELD
WESTCHESTER
customers, or revenue-generating ROCKLAND
SUSSEX
PASSAIC
units (RGUs), was 4.9 million, up BERGEN
WARREN MORRIS
SUFFOLK
BRONX
25 percent from 2002. ESSEX NY
QUEENS
HUDSON
NEW JERSEY NASSAU
BROOKLYN
UNION
STATEN
ISLAND
Today, more than 30 percent of SOMERSET
Cablevision Service Areas
MIDDLESEX
our cable customers receive digi- MERCER
MONMOUTH
tal services, compared with only 7 OCEAN
percent a year ago. This has
4
5. The Academy of
Television Arts & Sciences
awarded iO a 2003
technical Emmy® for
Outstanding Achievement
in Interactive Television.
became the first cable operator
to offer a competitive VoIP serv-
ice throughout our footprint.
Given Optimum Voice’s ease of
use and low cost, we expect cus-
tomer numbers to climb signifi-
cantly in 2004 with the introduc-
tion of new calling features.
Business Products
Lightpath’s network
Also holding strong, especially in
demonstrated incredible
the face of lingering softness in
resilience on August 14, By year-end 2004,
the telecommunications sector,
maintaining full system Cablevision's nationally
was Lightpath, which reported a
availability for all customers recognized educational
13 percent increase in net revenue
for the duration of the East initiative, Power to
in 2003. Cablevision’s business
Coast blackout. Learn, will bring the
telephony and data division also Internet to more than
recorded a 10 percent rise in the 2,100 schools and
Completing the bundle – and cap-
number of buildings on net this libraries in the company’s
italizing on the strong consumer
past year. service area while
demand for a competitive and
strengthening the home-
reliable voice service – is
school connection with
Cablevision’s newest product,
powertolearn.com, which
Optimum Voice. Introduced in the
provides educational
fall and now available across our
content and tools to
entire service area, Optimum
teachers, students and
Voice attracted 29,000 cus-
parents throughout the
tomers by year-end 2003 as we
New York area.
Now available to more than 4 million homes-passed in the
New York metropolitan area, Optimum Voice offers unlimited
calling across the United States and Canada, and five popular
calling features for the low, flat monthly rate of $34.95.
5
6. Madison Square Garden
remained the world’s pre-
mier entertainment venue in
2003, hosting hundreds of
memorable events, including
The Simon & Garfunkel
Reunion and Chris Rock’s
“Black Ambition Tour.”
Continuing to play an important Also at the Garden, and
role in New Yorkers’ lives are leading the NBA in ticket
Cablevision’s entertainment ven- revenue for the 12th straight
ues, sports teams, and local and year, the “new” New York
regional programming networks. Knicks welcomed two-time
all-star Stephon Marbury, live theatrical stage production
Billboard’s 2003 quot;Venue of the basketball luminary Isiah featuring the crooner’s image,
Year,quot; Madison Square Garden, Thomas and the NBA’s all- voice and work. Meanwhile, the
Entertainment & Sports
attracted more than 4 million visi- time winningest coach Radio City Christmas Spectacular
tors to hundreds of events this past Lenny Wilkens, while the and world-famous Rockettes con-
year, including the 45th annual Rangers added top scorer Jaromir tinued to attract audiences across
Grammy Awards, the Jagr for the 2003-2004 season. the country, and A Christmas Carol
Rolling Stones’ HBO con- Meanwhile, the Liberty remained celebrated a successful 10th and
cert special and The No. 1 in ticket revenue, with atten- final season.
Z-100 Jingle Ball. In dance among the top in the WNBA.
August 2004, “The Also making news in 2003 was
World’s Most Famous Radio City Music Hall also had a Fuse. Formerly muchmusic usa,
Arena” will host the first banner 2003, as more than 1.4 mil- the successfully re-branded Fuse
Republican National lion visitors passed through its turn- grabbed national attention this
Convention ever stiles to attend an array of shows, past year for its meteoric rise to
held in New including the 20th Anniversary of become the nation’s fastest-grow-
York City. the MTV Video Music Awards, the ing cable network in the coveted
Tony Awards and a run of sold-out 12- to 24-year-old demographic,
performances of Sinatra: His Voice. with more than 29 million viewing
His World. His Way, the first official subscribers.
VJs Marianela Pereyra and
Dennis Da Menace with
Outkast’s Andre 3000 and Big
Boi at Fuse’s new street-front
studio in midtown Manhattan.
6
7. MetroChannels’
Full Frontal Fashion
At the same time, Clearview
Cinemas provided added
convenience for New Yorkers
in 2003 with a multi-year,
multimillion-dollar deal with
significant strides, debuting
remote ticketing provider
two new, original series, while
AOL MovieFone.
welcoming back 52 days of Full
Frontal Fashion to MetroStories.
Complementing its New York prop-
Metro Traffic & Weather also
erties this past year was
celebrated a successful year,
Cablevision’s local and regional
launching an all-new traffic map-
programming. The company’s five-
ping system to remain New York’s
channel News 12 Networks received
most reliable source of local traffic
a host of accolades in 2003, includ-
Regional Programming
information, with a cumulative
ing 10 New York Emmys and 13
average of 750,000 homes tuning
National Telly Awards, while provid-
in each day.
ing even more local news and con-
tinuous updates at a faster pace to
In 2003, MSG Networks cablecast
meet the needs of its busy viewers.
hundreds of live events in HD and
garnered five Emmys. And the
With more than 7 million viewing
company’s Rainbow Sports
subscribers, the company’s
Networks extended carriage of the
MetroChannels also marked a
NHL’s San Jose Sharks and
memorable 2003. Awarded six
Columbus Blue Jackets, the NBA’s
New York Emmys, MetroTV made
Cleveland Cavaliers and MLB’s
Beyonce and Jay-Z perform Oakland A’s. These networks
at Radio City Music Hall. include five regional sports
channels reaching 19 million
viewing subscribers in San
Francisco, New England,
Florida, Ohio and Chicago,
and a 50 percent interest
in the national Fox
Sports Net.
7
8. New 2003 Mag Rack
titles include
Personal Trainer,
which offers home
workouts in aerobics,
kickboxing, Pilates,
belly dancing and more
for all fitness levels,
24/7.
Mix It Up, a Courteney Cox-David
Rainbow Media Holdings LLC broke industry veterans Peter Guber and
new ground in 2003, expanding its Peter Bart, launched in October Arquette creation. In addition, the
content offerings as it continued to 2003 to rave reviews. Also notewor- network published a book with
develop its popular programming. thy for AMC were American Simon & Schuster based on WE’s
celebrated series When I Was a Girl,
Cinematheque Tributes honoring
Spurred by increases in both adver- Denzel Washington and Nicole
tising revenue and subscriber num- Kidman.
bers, Rainbow’s core networks
National Programming
recorded revenue growth of 24 per- In 2003, IFC (The Independent Film
cent to $609 million. Channel) marked another success-
ful year of its signature series
Dinner for Five, announcing a third
Currently in 74 million viewing Sean quot;P. Diddyquot; Combs,
homes, AMC’s prime-time house- season for 2004. In addition, the Vincent Pastore, John
hold ratings were up 13 percent this network, which now has 30 million Leguizamo (back to camera),
past year. Meanwhile, the network’s viewing subscribers – up from 26 Jon Favreau and Juliette Lewis
new weekly series, Sunday Morning million in 2002 – launched IFC on IFC’s Dinner for Five.
ShootOut, hosted by entertainment Films On Demand and Uncensored
On Demand, two popular, new sub- which features
Sparks fly on AMC’s Sunday scription VOD services. IFC also accomplished
Morning ShootOut as hosts unveiled its most ambitious original women relating
Peter Bart and Peter Guber programming slate ever for 2004 personal child-
debate the week’s biggest with eight original productions, hood stories.
stories in the world of movies while its documentary release on
and entertainment. 1970s American cinema, A Decade Rainbow also expanded
Under the Influence, opened to its leadership in the on-demand
critical acclaim. arena in 2003. Mag Rack, the com-
pany’s suite of on-demand video
Reaching nearly 47 million U.S. magazines, extended distribution to
households in 2003, WE: Women’s 2.1 million homes and launched
exciting new titles such as Personal
Entertainment premiered its first
original film, Between Strangers Trainer. In addition, the company
introduced World Picks On
starring Sophia Loren, and
Demand, an SVOD service offering
launched a new home-design show,
8
9. On July 17, Rainbow DBS launched
Rainbow 1, a state-of-the-art satel- ®
lite that led to the introduction of
VOOM, a television service deliver-
ing more HD programming than any
other satellite or cable service in
the nation.
dented amount of HD programming
is made possible by Rainbow 1.
Hindi, Latino, Mandarin and Russian With its ahead-of-the-curve tech-
programming, and sportskool, the nology, this single satellite provides
nation’s first VOD cable network unparalleled capacity that will dou-
dedicated to expert sports and fit- ble with the arrival of MPEG-4.
ness instruction. Rainbow DBS is in a unique
position to take advantage
Perhaps the most significant new of this compression technol-
endeavor by Rainbow this past year ogy to maximize the deliv-
was the creation of an integrated ery of its advanced program-
Satellite Television
suite of 21 brand-new HD channels.
Mia Hamm, sportskool
Leveraging Rainbow’s national and
niche programming expertise, this ming across the continen-
content package represents the tal United States. This
largest single source of programming ability to deliver con-
Ten film channels that
created exclusively for HDTV. tent to consumers on offer the largest selection of HD movies
available anywhere
a much wider scale
Scary movies taken to the next
This suite of 21 channels forms the than ever before is due level by the power of HDTV
A cinematic celebration of the silver
core of Cablevision’s new HD-cen- to the power of
screen, featuring timeless films
tric programming satellite service, Rainbow 1 and is remi- Sports action from around the
globe, including exclusive HD
VOOM. Introduced in October 2003, niscent of the incredi-
coverage of Spanish Premier League soccer
this service, managed through ble opportunities cable Heart-pounding, in-your-face,
extreme sports like skydiving, snowboarding,
Cablevision’s Rainbow DBS satellite provided in 1973 when
surfing and skateboarding
division, delivers more HD program- Cablevision began dis- All music, all the time, with unri-
valed resolution and audio clarity
ming than any other satellite or cable tributing its content to
A new destination for the latest
service in the nation. In addition to outlying neighborhoods in fashion, beauty and style
The amazing world of collectibles,
more than 30 HD channels, VOOM across the nation’s first
collectors and auctions
features the latest in HD technology. suburban cable sys- An exploration of the world’s great-
est museums, art galleries and architecture
In 2004, this will include a ground- tem. As we move for-
Long- and short-form animation, from
breaking digital video recorder capa- ward, we see a promis- award-winning festivals to cartoon classics
Headlines, weather, sports,
ble of recording and playing back HD ing future, with VOOM
feature stories and video essays, all in HD
programming. as the centerpiece of a A stunning, continuous flow of
images set to music, creating a new artistic
new company entering
medium uniquely suited to HD
VOOM’s ability to deliver an unprece- an exciting new era. 9
10. CONSUMERS DEPEND ON CABLEVISION’S DIGITAL SERVICES
and technologies to improve their daily lives.
Today, Cablevision stands alone in delivering these integral products
across the world’s most advanced network to millions of loyal cus-
tomers in the nation’s most attractive market.
Going forward, as we focus on our core assets and strengthened
financial position, we will continue to provide cutting-edge services
and extend the boundaries of communications. We will also unveil a
new company that honors Cablevision’s 30-year heritage as a con-
tent leader, setting the stage for new opportunities.
Thank you
Thank you to our co-workers, customers, financial partners and
shareholders. It is because of you that consumers will look to
Cablevision for decades to come as we deliver products and servic-
es that continue to entertain, excite and enable.
Respectfully submitted,
April 2004
Charles F. Dolan James L. Dolan
Chairman President and Chief Executive Officer
James L. Dolan and Charles F. Dolan pictured at the company's
fully digital programming origination center.
10
11. Board of Directors Corporate Management Group
Charles F. Dolan Charles F. Dolan
Chairman Chairman
James L. Dolan James L. Dolan
President and Chief Executive Officer President and Chief Executive Officer
Chairman, Madison Square Garden
William J. Bell
Vice Chairman William J. Bell
Vice Chairman
Patrick F. Dolan
President, News 12 Networks Hank J. Ratner
Vice Chairman
Thomas C. Dolan
Vice Chairman, Madison Square
Executive Vice President
Garden
Charles D. Ferris
Michael S. Alpert
Partner, Mintz, Levin, Cohn, Ferris,
Corporate Executives
Senior Executive Vice President and
Glovsky and Popeo, P.C.
Chief Operating Officer, Rainbow DBS
Richard H. Hochman
Patrick F. Dolan
Chairman, Regent Capital
President, News 12 Networks
Management Corp.
Thomas C. Dolan
Sheila A. Mahony
Executive Vice President
Former Executive Vice President
and Chief Information Officer
Victor Oristano
Wilt Hildenbrand
Chairman, Alda Limited Partners
Executive Vice President, Engineering
Steve N. Rattner and Technology
Managing Principal, Quadrangle
Joseph J. Lhota
Group LLC
Executive Vice President, Corporate
Thomas V. Reifenheiser Administration, and President,
Retired Managing Director, Lightpath
JPMorgan Chase
Steve Mills
John R. Ryan President and Chief Operating Officer,
Retired Vice Admiral, U.S. Navy Madison Square Garden Sports
President, SUNY Maritime College
Andrew B. Rosengard
John L. Tatta Executive Vice President, Finance
Retired President, Cablevision
Thomas M. Rutledge
Systems Corp.
President, Cable and
Vincent Tese Communications
Director, The Bear Stearns
Joshua W. Sapan
Companies
President and Chief Executive Officer,
Rainbow Media Holdings LLC
Jonathan D. Schwartz
Executive Vice President
and General Counsel
11