The light tells you it's connected for digital audio transmission for home theater, Dolby(R) Digital and DTS(R)

Make a positive connection every time with the Velocity illuminated tip TOSLINK cable. The illuminated ring ahead of the connector body indicates when the cable is properly connected properly with a present signal. The unique round universal plug connects to a TOSLINK jack regardless of the connector's orientation.A 6mm diameter, soft-flexible PVC jacket protects the delicate fiber core. This cable's design eliminates EMI/RFI interference common to standard audio/video cables.Connector 1: TOSLINK MaleConnector 2: TOSLINK Male