Take away the requisite spin that times are tough and some subscribers can't afford to pay for full cable TV packages and you might determine that Time Warner Cable (NYSE: TWC-WI) has thrown down the gauntlet for those hundreds of thousands of subscribers who keep drifting off every quarter. The MSO's TV Essentials package, a stripped down, video-only deal, "isn't for everyone," as President-CEO Glenn Britt says; it's for those folks who complain they just can't afford to pay for cable.
The industry has been leaking subscribers at rates that frighten the financial markets. TV Essentials, with a one-month introductory cost of $29.99 to $39.99 is TWC's answer.
Britt hinted that the service, which includes local channels, 12 of the top 20 Nielsen-rated cable channels and some other programming, was on its way via comments he made during the company's third quarter earnings call. "We've heard loud and clear that customers would like more flexibility in video packaging, particularly in availablility of smaller packages," Britt said at the time. "We think it's important for this broader industry, the programmers and distributors, to be responsive to that."
For Time Warner, the deal is a no-risk play. If it succeeds, TWC retains a niche of customers that it might have lost. If it fails, it emphasizes that subscribers aren't cutting the cord because they don't want to pay so much for cable; they're cutting the cord because they don't way to pay anything if they can get the content free from the Internet. And that, in turn, will allow the "broader industry" to focus in yet another direction.
- see this news release
Size matters: Time Warner Cable plots 'low-end packages'
Time Warner Cable starts high-speed chase in North Carolina