Size matters: Time Warner Cable plots 'low-end packages'

Time Warner Cable (NYSE: TWC-WI) hopes it has an answer for the hundreds of thousands of basic video subscribers who are fleeing cable: a low-end programming package targeted at "more value- and budget-oriented segments," Glenn Britt, the MSO's CEO said during a third quarter earnings call.

TWC, he said, is seeking "flexibility" from programmers and other content providers who prefer to package their products to more affluent audiences, so "if they're facing smaller audiences or smaller subscriptions, that's a big problem for them," Britt said. "It's natural for those companies to resist."

Natural and likely a serious roadblock, said Cablevision Systems (NYSE: CVC) COO Tom Rutledge when asked his opinion during his own MSO's third quarter earnings call. Rutledge pointed out that such a programming tier might even go against existing law that requires over-the-air television to be included in basic service. This "historic artifact of cable regulation ... gives broadcasting a more powerful regulatory position than any other kind of programming," he said.

Britt, though, was optimistic about TWC's plans. "There's a balance in this and I would just leave it to say we have negotiated some flexibility beyond what we had a few years ago that will allow us to begin to offer some smaller packages at lower prices," he said.

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