Aug. 13 (Bloomberg) -- Time Warner Cable Inc., the second- largest U.S. cable company, plans to expand a service that lets viewers watch shows when they want as long as they sit through the commercials.

``Start Over'' gives subscribers the ability to go back to the beginning of a show if they tune in late and blocks viewers from skipping past ads. Introduced in South Carolina two years ago, the feature will be in almost half of Time Warner Cable's 23 markets by year-end, said Peter Stern, executive vice president.

The free service represents a trade-off between Time Warner Cable, which is striving to offer more on-demand shows to its 14.7 million customers, and broadcast networks that count on advertisers and don't want viewers to fast-forward. Cable is the fastest-growing business at New York-based Time Warner Inc., which owns 84 percent of the publicly traded unit.

``One of the things there's a great deal of controversy about is the impact of DVR on advertising,'' Stern said in an interview. ``The features we're talking about are the antidote.''

Time Warner, larger competitor Comcast Corp. and other cable operators are counting on services such as ``Start Over'' to lure viewers. New customers at Time Warner Cable contributed to a 59 percent sales gain at the unit in the second quarter, and Jeffrey Bewkes, president of Time Warner Inc., is urging networks to make all of their shows available on-demand.

Attract Subscribers

``The challenge of Time Warner is giving customers what they want and satisfying the needs of advertisers,'' said Sanford C. Bernstein & Co.'s Craig Moffett, ranked the top cable analyst by Institutional Investor magazine. Disabling fast- forward ``respects the needs of programmers to get paid.''

Such services differ from those offered by TiVo Inc. and other digital video recorders in that they are free and viewers don't have to program cable boxes in advance to record shows.

To make video-on-demand more attractive to advertiser- supported networks such as General Electric Co.'s NBC or Walt Disney Co.'s ABC, Time Warner can measure what's being viewed and allow broadcasters to insert new commercials, Stern said.

``It's a new way to monetize content,'' said David Joyce, an analyst at Miller Tabak & Co. in New York, who rates Time Warner and the cable unit ``buy'' and doesn't own either stock.

Shares of Time Warner Cable rose 75 cents, or 2.2 percent, to $35.35 at 4 p.m. in New York Stock Exchange composite trading. They have declined 14 percent since they began trading in January. Parent Time Warner Inc. rose 18 cents to $18.80 and had fallen similarly this year.

Look Back, Catch Up

Time Warner Cable offers ``Start Over'' with more than 100 networks. The company plans to introduce the feature this year in Syracuse, New York; Portland, Maine; San Diego and Waco and Corpus Christi in Texas. It is already available in parts of Hawaii, New York, Texas, North Carolina and South Carolina.

In the next few months, the company also plans to start a trial of ``Look Back,'' which provides same-day viewing of a show that has already aired, Stern said. The division has signed up one network and is seeking more, Stern said.

Time Warner Cable also is planning to introduce ``Catch Up,'' which lets viewers watch recent episodes of shows for days or weeks after they have aired, Stern said. When ``Look Back'' and ``Catch Up'' are introduced nationally depends on getting copyright approval from programmers.

``It's part of a big trend, moving to an on-demand world,'' said Marc Graboff, co-chairman of NBC Entertainment and the NBC Universal Television Studio. ``The trick is, for us, to make sure we're compensated for it.''

To contact the reporter on this story: Gillian Wee in New York at gwee3@bloomberg.net.

Last Updated: August 13, 2007 16:19 EDT