Britt: Time Warner Cable will drop underperforming networks when contracts expire

Time Warner Cable (NYSE: TWC) plans to drop underperforming cable networks that aren't worth their monthly carriage fees, CEO Glenn Britt said Monday.

Glenn Britt, Time Warner Cable

Britt (Image source: TWC)

"As our programming contracts come up for renewal, we're going to take a hard look at each service. Those services that cost too much relative to the viewership or value of those services, we're going to drop them, or we may put them on a different tier," Britt said at the UBS Global Media and Communications Conference in New York.

Britt criticized major programming companies who he said feel "it's a birthright" once they grow to 70 or 80 million subscribers to demand rate increases, even if their ratings decline. "Over the years we've accumulated networks that hardly anybody watches, and a number of them are trying to reach the same audiences as other ones that are more successful," Britt said.

The Time Warner Cable chief said the MSO hasn't seen a significant number of subscribers cut the cord on cable to rely on the Internet for home entertainment, and he said the impact from young "cord never" subscribers who chose to forego pay TV subscriptions has also been minor. But he said the industry must offer more flexible pricing and packaging options in order to sustain the subscription video business.

"This stuff is just starting to cost too much. If we as a broader industry want to keep this going, we need to figure out some way to have packages and prices that are lower for people that can't afford it," Britt added.

Time Warner Cable's subscriber count has been impacted by reduced housing construction, and the number of multigenerational families that are sharing homes and cable subscriptions because of the economy. "What we need is for people to form households. That means multigenerational families that are living together because of economic circumstances--we would need them to go back to a more traditional manner of forming new households. That has started a little bit, but it's not terribly strong at the moment," he added.

Also worth noting from Britt's appearance at the UBS conference:

  • Britt ripped Google's (Nasdaq: GOOG) strategy of offering a free broadband option to Google Fiber TV subscribers in Kansas City. "It's hard to compete with free, but it's hard to make money with free also," he said.
  • Time Warner Cable is feeling increased competition from Verizon's (NYSE: VZ) FiOS TV in New York, where the telco is attempting to expand into new apartment buildings. "This is building by building combat," Britt said. Time Warner Cable recently increased the pricing of its triple-play package in the city from $89 to $99, he added.
  • Britt said Time Warner Cable will operate 10,000 WiFi hotspots in the Los Angeles market by the end of December, and that the MSO plans to step up its WiFi construction next in New York. "We think that adding this WiFi capability enhances our broadband product, and it appears to reduce churn," he added.
  • Britt said Time Warner Cable will expand the number of connected TVs and other consumer electronics devices subscribers can use to watch live streaming video from cable networks within their homes similar to its Apple iPad app. The MSO will also soon add video-on-demand programming to apps it has built for the iPad and other devices, he added.

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