TWC bundles improved broadband speeds with year of free TV

Time Warner Cable (NYSE: TWC) is offering a year of free TV as an incentive for subscribers who jack up their broadband speeds to--believe it or not--improve their Netflix (Nasdaq: NFLX) performance.

The offer is included in a mailer being sent to Internet-only customers who, it seems likely, are also Netflix customers, according to a story in GigaOM.

TWC has been among the industry's front companies in pushing broadband as a service while simultaneously conceding that not every subscriber wants every TV channel. The MSO has developed limited programming packages--and conversely loaded content packages--to appeal to a wider range of subscribers, so the apparent concession that Netflix can be better accessed at higher broadband speeds is not a total surprise.

What is somewhat surprising is the year of free TV, which seems to say that TWC is still in the fight to bring these video subscribers back into their TV fold and also indicates that the MSO hasn't yet given up on what has traditionally been a cable industry cash cow.

The GigaOM story gave TWC credit for acknowledging the base of cord cutters among its own subscribers and trying to do something about them.

"For these cord cutters, an ad like this may actually be a smart thing: Instead of making them feel like they're subscribing to an expensive TV bundle, Time Warner Cable is putting the emphasis squarely on Netflix, a service Internet-only users likely already enjoy," the article noted.

Of course, there is a limit to how far any MSO will go, and Time Warner Cable's limit apparently is reached when it comes to including Netflix in the subscription package. Whether that changes or not--and the chances of that change still seem very remote--depends on whether the two sides can get together and make nice.

The GigaOM story cited a Reuters report in March that said Netflix could perhaps become another pay TV service like HBO--and even more importantly, that this service would be welcomed by cable operators.

"It's not in the short term, but it's in the natural direction for us in the long term," Netflix CEO Reed Hastings said at the time. "Many (cable service providers) would like to have a competitor to HBO, and they would bid us off of HBO."

Since then, of course, HBO and Netflix have ratcheted up their own competition a notch in Europe, where HBO launched an online service ahead of Netflix's market entry.

That, though, still appears to be in the long term. Short term, Time Warner Cable is taking its first steps to acknowledge that some subscribers might not want a TV package--then taking a step in the direction of convincing them otherwise.

For more:
GigaOm has this story
- and Reuters reported on this in March

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