Time Warner Cable Causing A Feeding Frenzy

It seems when you smell a wounded prey that the scroungers come to attack.  Once it became clear that Time Warner Cable could be picked apart, Comcast followed after Charter Cable and now here comes Cox Communications.  "The frenzy of deal interest comes as cable companies are trying to get bigger to deal with the industry's challenges, which include the rising costs of TV programming supplied by cable and broadcast networks." 

So who gets what pieces? Comcast would be happiest getting the New York demo and perhaps the Maine system, adding to its ownership of the Eastern corridor.  Charter would love to take California and some midwest systems.  And Cox might just love to own the Carolinas, Texas and Arizona.  Would Charter be open to taking a portion or perhaps they are ready to gobble up all of Time Warner Cable.  With Tom Rutledge , CEO of Charter at the helm, and a former Time Warner Cable executive, he has a pretty good idea what those systems offer and whether he is willing to share or not.  Either way, it continues to look like Time Warner Cable will be a footnote in cable history in a few short years. 

Apple Looking To Kinect

It seems that Apple likes the idea of motion sensor technology that they decided to buy it.  Watching the success of Microsoft's Xbox Kinect, Apple  "paid about $350 million to acquire PrimeSense, an Israeli start-up that developed the motion-sensing technology in Microsoft's Xbox video game console."  Not so much given they can use the money they won from Samsung's patent dispute to help pay for it.  And with so much cash on hand, they don't even need that.

So the question is when or where will Apple incorporate this newly acquired technology?  Will it go into the Apple TV, future iMacs, or all laptops, iPads and iPhones?  For that, we will just have to wait for the next Apple announcement.

Cable All About The Pipe To The Home

The future of cable is all about the infrastructure and the wires that connect homes to headends.  While first built to provide cable service, it now enables broadband, telephone and cable signals to function in two-way mode.  And it has become increasingly clear that the future of cable is the broadband pipeline.  "The cable companies — at least in the U.S. — have the fastest pipes into majority of homes. They are faster than phone companies and have a deeper footprint."  Despite the threat of cable cord cutting, consumers still rely on cable's wire to access their OTT subscriptions and videos.

So control of the US landscape is essential for efficiencies and economies of scale.  It also allows for WIFI expansion and new revenue streams.  Many talk about broadband moving from an all-you-can-eat model to a utility model based on usage; but, it opens up other revenue streams for security, cloud functionality, and more.  And it is why cable operators are circling Time Warner Cable with a possible feeding frenzy over their coverage area.  "So the cable industry, if it can consolidate, gets access to the most important pipe coming into people’s homes (after power and water) and the fewer cable companies there are, the more unified the rate structure might appear." Ultimately, a more monopolistic industry with fewer competitors to upend the egg cart. 

But will the FCC put any resistance to this level of consolidation.  It seems less with Charter, a smaller cable company swallowing up Time Warner Cable; but it raises red flags with the largest cable operator, Comcast, entering the picture.  It screams anti-competitive although it is part of the natural industry life cycle till other disruptive opportunities come along.  The FCC might just resist such merger talk but I think their best course of action is to encourage new companies to offer broadband access.  Open up new spectrum for broadband/cellular and encourage companies to enter the fray.  The electric companies already string this country with wires; can't they be encouraged to build out a broadband business.  LightSquared unsuccessfully tried to compete; offer them spectrum that works with their model.  It seems the best course of action is to encourage competition in a landscape that requires more and faster broadband access, at a reasonable cost.  Monopolies set and control pricing; competition lets the market choose. 

Time Warner Cable May Have Charter and Comcast As Buyers

It seems that merger and acquisition news in the cable industry has suddenly turned more active with Charter gathering financing and Time Warner Cable reaching out to Comcast about a bid as well.  A Charter deal is seen as improving the cost efficiencies of running a cable distribution platform while a Time Warner Cable and Comcast deal is more about gaining a more national footprint.  The latter move also comes with a ton of anti-competition issues; "Comcast/TWC would control 60% of the cable homes in the country, 30% of all pay television households and 36% of all broadband connections in the U.S., which could pose a very high regulatory hurdle." As Comcast already gets some of the cheapest content license fee deals, being the largest provider, a larger size would have to find cost efficiencies from a more streamlined operational platform.

The Time Warner Cable deal with Charter might be even more exciting for the Charter CEO, Tom Rutledge.  It would be full circle for him as he not only demonstrated his leadership skills in running Cablevision but actually came from Time Warner Cable.  And running a combined TWC/Charter operation might help him get the next prize, Cablevision, and its Long Island operations.  I don't see Comcast making an offer and dealing with regulatory approval; they have their hands full as the largest MSO.  But I do think a Charter/Time Warner Cable merger as much more likely.

Netflix, Hulu On Cable Just Might Make Sense

Sometimes our enemies make the strangest bedfellows.  It has happened many times before and it can happen again.  When IFC and Sundance Channel were fighting each other for share of the indie film audience, who would have ever imagined that one day both would be owned by the same company.  When cable and the phone companies would fight for share, who would have expected partnerships in certain markets.  And now we wonder would cable ever partner with an OTT programmer.

Well it just might make sense.  The reality is that the programming that subscription services like Netflix and Hulu Plus provide actually augment the choices available to consumers.  And especially as these OTT providers increase their stake in original programming.  The cable operators' concern is that Netflix and others will drive further cord cutting; but what if adding them to the line-up only makes the cable subscription service that much more attractive.  For consumer that seek more, they are likely willing to buy or keep their Netflix or Hulu Plus subscription AND keep their cable subscription.  In fact, they just might continue to buy premium networks like HBO and Showtime too.  Consumers essentially have an unquenched appetite for more video content.  And if cable operators can make its access to these OTT programmers easy, they just might remain loyal cable subscribers, too.

I am confident that cable operators have been doing their research.  I wouldn't be surprised to learn that a large percentage of cable households also have a Netflix subscription.  The key to the success of carrying them along with their other choices would be the utilization of the set top box and its search capabilities.  Making finding content easier and adding recommendation to the equation could make the cable operator the premier aggregator of video content to the home.  And doesn't that drive more revenue opportunities. 

Streaming Content Access Across OTT Platforms

Certainly not meant to be a complete list, here is a rundown of what streaming video access you might find across some OTT and gaming devices as you consider your holiday shopping:

PS4 - Amazon Instant, Crackle, Crunchroll, EPIX, Hulu Plus, NBA Game Time, Netflix, NHL GameCenter Live, Redbox Instant, VUDU, Yupp TV

Xbox One - Amazon Instant, Crackle, CW, ESPN on Xbox One, FOX NOW, FXNOW, Hulu Plus, Internet Explorer on Xbox One, Machinima, MUZU.TV, Netflix, Redbox Instant, Target Ticket, TED, Twitch, Unvision Deportes, Verizon Fios TV, VUDU, Xbox Video

Apple TV - iTunes, Crunchyroll, Disney, Disney Junior, Disney XD, flicker, HBO Go, Hulu Plus, MLB.TV, MLS, NBA League Pass, NHL Game Center, Netflix, PBS, Qello, Sky News, Smithsonian Channel, Watch ESPN, Weather Channel, WSJ Live, Yahoo! Screen, You Tube, Vevo, Vimeo

Chromecast - Google Play, HBO Go, Hulu Plus, Netflix, Pandora, You Tube

Roku - Amazon Instant, AOL On, AP, BBC, Blockbuster on demand, Crackle, dishworld, EPIX, Flixster, Fox News Channel, HBO Go, Hulu Plus, MLB.TV, MLS, NBA League Pass, NHL Game Center, NBC News, Netflix, Pop Flix, Sky News, Snag Films, Target Ticket, Vevo, VUDU, Warner Archive.

So depending which video content apps you prefer, your decision on buying a box for access depends on what they carry and distribute.  Of course, with the two gaming systems, you primary purchase decision might not even include streaming video.  And as for Apple TV, Chromecast, and Roku, you just might be able to access your video content from your blu-ray player or smart TV directly. 

Slingbox Standalone vs Slingbox Cable

Given the number of boxes aiming to connect with the television set, it makes sense to partner with the leader in the field, the cable set top box.  It is a strategy that TiVo has recognized and been following in order to gain a deeper household penetration.  But working with cable operators comes with a price, and that issue is working under the content licensing agreements as well.

Slingbox, as a standalone box, simply needs a wire between cable set top and the Slingbox, and then a wire to the TV set.  It may be a number of wires between the devices but it allows the Slingbox to talk to the cable box.  It then enables all mobile devices to access that cable box, through the Slingbox,  although the big downside is that only one user can watch a show at a time from this set-up.  TiVo offers an option for a CableCard to make it a cable set top box, although depending on the operator, it may not access the on demand features.

Under the standalone feature, a user has a complete TV Everywhere experience at his disposal.  Still, Sling the company, recognizes to gain more households, it may be necessary to follow the TiVo model and put their technology INSIDE the cable set top box.  But that ultimately limits the true value of the Slingbox.  By working with the cable operator, Sling would be subject to their licensing deals that for many networks limits access to streaming of their channels.  "TV Everywhere is a nightmare for consumers because of these unresolved issues," whether cable operators work with Sling technology or not. 

Sling may want to get closer to the cable operator but networks are already developing their own streaming apps for each of their channels.  It does give networks more control over their content but it becomes much more confusing for the customer trying to find which app to use to get to the content they want to watch.  An aggregated app, like the one a standalone Slingbox offers, seems the easiest to manage for users.  That is until someone comes up with an app that provides a complete line-up of content choices, linear and on demand and links to the app to best serve it to the consumer.  An extra step, but perhaps a likely next step as a go around of the cable operator.  Given the cost and difficulty of getting a TV Everywhere experience, it is why users have found alternatives with OTT and ditching the cable box completely.  And that is something Sling, TiVo and the cable operators really have to worry about. 

Roku Wants Market Share From Apple TV

The Holiday Season is upon us and Roku wants to be the OTT box for the home.  And they believe that they can take share of market away from Apple TV.   "Roku, which makes set-top boxes that stream video and subscription services to TV sets via the Internet, has stepped up the rivalry with an in-theater ad push touting its content advantage over Apple TV and other streaming players."  So while Roku is promoting its content strength, Apple has done nothing to upgrade its Apple TV product in 2013.  So is it going to be a fair fight?

Truth is, Apple TV and Roku have to worry more about the new gaming platforms coming from Sony and Microsoft.  The PS4 and Xbox One are meant to deliver a similar video streaming experience as well as be the gaming platform in the home.  And with 1 million PS4 sold in less than a week, will consumers buy more than one streaming media box. 

In the head to head, Roku has the better price and a rich variety of content partners.  "Roku sells several models at prices between $49 and $99, while Apple TV retails for $99. Some reports suggest that certain retailers will drop Apple’s price to $75 on Black Friday."  But Apple offers something Roku doesn't, and that is its iTunes library.  For those married to it, the Apple TV uniquely enables your HDTV to watch itune content; Roku and others do not.  But customers may not want to buy a discounted Apple TV box if they suspect that a new box is set to be released in 2014.  Roku may be striking while the iron is hot and that might just be the right call.  With Google's Chromecast competing as well, Apple TV may just be the box left behind. 

Streaming Media Could Add Another Competitor

The streaming media platform for renting and/or buying video content has quickly become a crowded space.  Of course, you have the big players, Apple, Amazon, Google, Hulu Plus, and Netflix.  Retailers like Walmart have Vudu and Target with "Target Ticket" want you to be both their brick and mortar and online source for video consumption.  And of course tons of free streaming video sites as well.  So access to online movies and TV shows for rental and purchase is abundant.  Yet, there is talk of a new entrant.

Cable operator Comcast wants to extend its on demand library of content to streaming and offer its own streaming service for rental and purchase with "plans to start selling movies for download and streaming through the cable operator's set-top boxes and its Xfinity TV website, according to people with knowledge of the plan...The initial offering will include a range of titles from several Hollywood studios that include new releases, older movies and some TV shows, one of the sources said."  Its one advantage, you already have a set top box in the home so no need to buy an Apple TV, blu-ray player, Roku box, TiVo, gaming system, tablet, laptop or other to watch their videos.  Unfortunately for cable operators, most households have more than one of these other boxes.

The article states that this new entrant would "offer a new path for Hollywood studios to generate revenue", but I wonder if cable operators are too late to the game.  Comcast may be considering it, but the other cable operators most likely haven't discussed.  With multiple boxes fighting for the TV shelf and already offering streaming media to compete with cable's on demand services, that window is already wide open.  Certainly adding a new bidder to the streaming rental and download space creates more competition and likely higher bidding for exclusive content, it does not, as the author contends, open a new distribution window.  Still, it is a space that cable operators must enter if they plan to compete with OTT platforms.  

I can see the potential of cable operators offering free download movies to triple play customers, high rental customers, and other incentives to encourage consumers to remain loyal to their cable operator.  A cable streaming service offers great marketing potential when competition is only getting fiercer.  So Comcast Cable and others, what are you waiting for?

Xbox One or PS4

We have a major decision going on in my family.  What gaming system do we get.  As neither is backwards compatible with its predecessor, there is no legacy allegiance to worry about.  And trust me, we have played with them all, Wii, Playstation, Xbox 360.  But with PS4 release today and the Xbox One next week, the urge to buy has been plaguing my son. 

Both are expensive systems, neither are perfect, but he wrestles nightly with which platform to get.  For me, the decision seems an easier one and that is to wait.  Why?  Like any release of a new system, software bugs exist and best to not be the guinea pig.  Also, both platforms have limited content choice for games as neither can use older games.  In fact, I might give an extra push and lean more toward the company that recognizes the ownership of games in their prior system and offers free downloadable versions or discounts for online game upgrades.  And lastly, while my son may want to lead the pack, the social elements of each platform rely on friends also on the platform.  I think he is best to learn which platforms his friends are leaning as well before purchasing a new system. 

There has already been a run on pre-orders of both systems.  Game Stop, Best Buy and others are opening at midnight for an early jump on sales.  And with the holidays peaking around the corner, a new gaming platform and its games make for great gifts.   But what is the rush.  The old platforms are still here and many will stay want to play those old PS3 and Xbox 360 games.  And who knows what discounts might await him in January.  But I can only suggest.  For gamers, young and old, the appeal of new platform, the both in many years for Sony and Microsoft, brings more power and storage, as well as better graphics.  The force may be too great for them to ignore or avoid. 

Netflix For The TV Screen

Certainly millions of subscribers are getting great satisfaction from streaming videos directly to their personal devices, from laptops to tablets and smartphones.  But sometimes we don't want to watch alone and the shared viewing experience that a TV screen provides enables a shared experience and future conversation about the show.  Recognizing that different platforms require different interfaces means understanding how consumers are interacting with their content and Netflix seems to embrace that wisdom.  "Netflix has unleashed an overhaul to its interface for televisions that extends more uniform, feature rich capabilities to apps running on a many TV-linked devices, including select Roku boxes, smart TVs, Blu-ray players, and Playstation consoles and the Xbox 360."  Netflix consumers enjoy watching on the bigger screens and assuring that the user gets the best experience in searching and streaming content is what makes for satisfied subscribers.  The more ergonomically suited the user experience becomes, the more likely subscribers remain engaged and happy with their Netflix subscription. 

Consumers Dropping Cable TV Service

It may be just a drip, drip, drip, but the high cost of cable TV, coupled with the rise of video content streaming on the web, may finally be turning consumers off cable TV completely.  Yes DirecTv and Dish both saw quarterly subscriber growth, likely due to the Time Warner Cable fiasco with CBS as well as to their cheaper offerings.  But a total number of subscribers have fled cable TV completely. 

"Veteran Wall Street media analysts Craig Moffett and Michael Nathanson calculated that the pay-TV industry — which includes cable, satellite and phone companies offering video service -- lost 113,000 subscribers during the third quarter."  Call it cord cutting but the reasoning behind this loss cuts much deeper.  It is the younger demo that no longer values cable and prefers to spend more time with web, social media, and gaming.  Should Q4 numbers show an increase in total customer drops, this cor cutting trend will hit hard.  Already cable operators are testing usage based broadband subscription packages.  Their intention, to recoup their revenues from high usage households dependent on streaming media platforms like Netflix, Amazon, and others.  And that usage, measured by recent reports, have been increasing rapidly.  Video streaming is dominating the broadband spectrum.  And so households that stick with cable operators for their broadband will see those fees rise faster and faster to make up for the loss in cable television revenues.

Consumers have little choice for broadband today.  Lower cost DSL service may find some relief and telco/wireless companies can provide packages of service that might just prove a better value.  But there is a need for more competition in this space.  When Time Warner Cable lost Q3 cable subs, they also lost Q3 broadband subscribers, a rare shift and one that portends more disaster for the cable operator. 

Broadband today continues to demand cheaper access and faster connection speeds.  Pipelines are easily clogged as high usage of heavy data video streams are requiring faster capital improvements.  But consumers will fight back if broadband usage fees rise dramatically.  Consumers are leaving cable for broadband and that trend will only quicken. 

The Future Of TV Sales

With the rise of tablets and smartphones, smaller screens are outselling bigger ones.  And we seem more likely to replace our iPhones and our iPads far more rapidly than our big screen HDTVs.  On the business side, sales of big screen TVs are slowing down.  "Overall, global flat-panel TV shipments were down 7 percent in August, the third straight month of decline compared to their levels during the same time a year ago in 2012."  The holidays are coming and expectations are that sales will rise, but manufacturers are concerned and will be aggressively lowering their prices to capture market share.

So why should Apple even consider this business.  Consumers have gotten comfortable with the box behind the TV set and seem less likely to upgrade their TV sets, even for an Apple television.  With gaming consoles like XBox and Playstation driving streaming and OTT, consumers care more about the content then an all-in-one TV set.  And that is why Apple should place more emphasis on their Apple TV product and focus on more ways to make it both cloud and hard drive ready.  Focus on content deals and pursue a rental business to complement its iTunes sale business.  Let the Apple TV box work behind any TV set and let others sweat over the big screen set.  And if you want to sell a big screen monitor; great.  Just let it work with all your devices. 

Superheroes Invading OTT Platforms

If sports doesn't become the content that propels OTT platforms forward, then maybe it will be the job of superheroes.  With The Awesomes on Hulu, the time has come for the next tier of heroes to emerge and Marvel/ABC is providing them with their recent deal with Netflix.  "Disney and Netflix announced a deal Thursday for four 13-episode series featuring Marvel Comics heroes Daredevil, Jessica Jones, Iron Fist and Luke Cage that will air on the video-streaming service over multiple years and will lead to a mini-event called The Defenders."These shows are scheduled for release in the next year.

Aimed directly at the teen audience, the key demographic by the way for video streaming, Marvel Studios and ABC are recognizing the power of superheroes in the disruptive world of streaming video.  And building synergy with its theatrical and linear properties will only continue to increase the value of their content across all platforms.  It is a brilliant strategic move for ABC to stay relevant in a changing environment.  And for Netflix, further push value of its streaming service and subscriber growth.  Exclusive content, with the Marvel name recognition, further demonstrates that content is king.

Why Did Dish Network Buy Blockbuster?

When Dish bought the Blockbuster chain a few years ago, the question most people asked was what was their to gain from buying a brick and mortar establishment that was already seeing loss of market share in the DVD rental business.  Netflix was struggling to convert from mail to streaming and Dish was still stuck with a brick and mortar business competing with a subscription mail business.  Clearly they were a step behind and a dollar short.  But Dish came in and bought the company, presumably for its content business.  And since then, nothing.  So what was Dish thinking and why did they spend their money on a losing investment that had continued to bleed dollars?

Stores were closed along the way and finally, this week, the announcement that the rest of the stores and mail order business was closing down.  From the official release, "'This is not an easy decision, yet consumer demand is clearly moving to digital distribution of video entertainment,' said Joseph P. Clayton, DISH president and chief executive officer. 'Despite our closing of the physical distribution elements of the business, we continue to see value in the Blockbuster brand, and we expect to leverage that brand as we continue to expand our digital offerings.'"  But if the intention was to push the digital offerings, what has Dish been doing since they purchased the Blockbuster brand to compete in this space. 

While Amazon, Netflix, and Hulu have been investing in original content and building out their online brand, Blockbuster has been eerily quiet.  The brand name once synonymous with video content rentals has lost its leadership brand and its legacy stature.  It is a shell of its former self.  Dish has done little if anything to promote or differentiate itself in the online, digital space.  And with the loss of their stores, their awareness could even drop below Redbox, who continues to operate its vending business as it too finds a digital footprint.  So Dish has a big decision to make, do they put a ton of investment back into the Blockbuster brand to compete more effectively against Netflix and others, or is its best move to simply take the full loss and write off.  I am suspecting the latter is the better move.

My Son Wants An XBox One

As a teenager, my son has become addicted to the gaming platform.  Casual games are nice, but he truly loves the immersive experience and the big screen to play his games.  We started with Wii and Playstation and graduated to XBox 360 just as he became a teenager.  And with the release of new gaming systems from Sony and Microsoft, he has been vacillating between buying the next generation Playstation and XBox One.  It has not been an easy decision. 

So in our latest conversation, the XBox One is currently in the lead and he is disappointed that he is past the window pre-ordering at Game Stop and worriend that they will be out of stock for weeks after its launch.  But his choice for gaming system never took into consideration the added non-gaming features.  "The Xbox One is designed to support a TV content ecosystem that will generate ongoing revenue for Microsoft in parallel with the video game ecosystem at the core of the Xbox franchise."  He could care less.  For my son, the choice is all about the next generation of games and which box his friends might get in order to have a shared social experience in the game. 

And so I wonder, is a box capable of handling more than just its core function of gaming, of value to the consumer or not.  Will they appreciate that their same box can access videos as well as exclusive content from a Microsoft library or do they just want a box for gaming?  Can this all-in-one box give Microsoft new entry into a competitive product to Apple, Amazon, and Google, as well as synergy to its Surface tablet, or will consumers find limited interest outside the gaming platform?  Once in the home, I am interested to see how my son embraces these added features.  Certainly, it is the direction that Microsoft needs to take and I wish them well in driving this strategic plan to a successful end. 

Netflix Should Consider Adding a Transactional Movie Service

With an Emmy under their belt and an eye on a possible Oscar documentary, Netflix continues to emerge as a leader in the OTT streaming space.  With a monthly subscription service and a growing library of video content, Netflix continues to attract a larger paying audience.  The cost to acquire content will only increase as more competition emerges to challenge them in this space.  So what else is on Netflix's plate?

"First-run films would add a dimension to Netflix’s formula of offering viewers a mix of original series, with a library of movies and reruns."  But is there intention to offer these films as part of their subscription or to perhaps consider adding a transactional business to let consumers rent first run films, on-demand, at a per movie fee.  It would certainly shake-up cable's on demand presence and attract studio attention, especially if it included a more lucrative split to gain an exclusive window.  Cable operators are already feeling the heat of the battle from cord cutters choosing OTT over cable; this business model would be the next logical step in disrupting the status quo of on demand movies.  Consumers have already shown a strong interest in on demand through their cable service; a Netflix on demand model on top of their subscription service might just be happily received for access to first run content. 

Is It Time For Just 2 Time Zones?

I just read this article and thought it was worth sharing.  Given the rise of digital technology, communication and immediacy has become more and more important.  "Frequent and uncoordinated time changes cause confusion, undermining economic efficiency. There’s evidence that regularly changing sleep cycles, associated with daylight saving, lowers productivity and increases heart attacks."  How nice would it be to schedule calls between the two coasts and not worry about a 3 hour time difference.  

And how easy would the coordination of broadcast with east coast and west coast feeds to be able to have one feed for the entire country.  Live events at 8 pm on the east coast would be at 7 pm on the west coast.  The recently completed World Series games could actually start an hour earlier and still be prime time on both coasts. 

Ultimately, as the author points out, "The purpose of uniform time measures is coordination. How we measure time has always evolved with the needs of commerce."  It seems it might just be in our economic interests to consider such a plan.

Time Warner Cable Needs A Partner in Charter

Hit em when they are down.  The loss of both cable and broadband subscribers for Time Warner Cable has opened up the box once again for a potential merger with Charter Cable.  That TWC's losses were attributed to blacking out CBS and its sister channels for a month does not spell good news for any cable operator.  Each and everyone faces similar battles when license fee negotiations come up for renewal.

A friend from Los Angeles recently shared his story with me.  His family was a Time Warner Cable subscriber till CBS was dropped.  It was for them the last straw.  And being in a major DMA, they were fortunate enough to have alternatives.  TWC was limited in their response.  They offered a measly free movie to try and appease them.  Instead my friend switched to DirecTv for cable and AT&T for broadband and phone and discovered two immediate benefits, more channels and a total lower monthly cost.  Of course, I asked what he would do when or if CBS or another broadcaster was forced off their line-up as well.  He responded, with a wait and see attitude.  And what did TWC do to save the account.  Nothing when they notified them of their switch and nothing when they delivered their set top boxes back to TWC.  What irked them more, was a call placed by TWC to their home at 8am on a Saturday morning to try and win them back.  It was met with a firm hang up and a reminder that they had in fact made a good decision.

Consumers annoyed with current tactics and dropped channels will continue to seek alternatives.  Can a Charter merger save TWC? Not unless, once combined,  they go back to the drawing board with new, lower pricing models that take advantage of economies of scale.  That and a desire to do business differently or watch as more consumers leave, first for cheaper alternatives offered by competition, and soon enough streaming OTT platforms with enough content to encourage a steady stream of cord cutters.  That means not dropping channels unless you plan to keep them off.  Reducing the profit margin on cable subscriptions.  Better customer service and cheaper packages.  The trend toward OTT instead of cable is moving quickly and current operators are doing little to change their strategies. 

Both Time Warner Cable And CBS Hurt By Blackout

When contract negotiations failed and CBS was blacked out for a month on Time Warner Cable systems, the results proved disastrous for TWC.  For the third quarter of this year, TWC lost 306 k cable subscribers and 24 K broadband customers.  And given that TWC is in both Los Angeles and New York, consumer were able to switch to satellite or telco providers like U-Verse and FIOS.  It clearly hurt TWC in the financial wallet, but I speculate that CBS also felt it, with lost license fee and advertising revenues as well as higher marketing expenses to tell consumers to switch providers.  How fast consumers switched and how much CBS was hurt has yet to be heard.  But at the end, both sides lost.

So where does TWC go from here? The threat of competition from other cable providers as well as from streaming platforms, the continued loss of subscribers quarter over quarter, and the need to keep margins by lowering costs.  Is consolidation a sound strategic fit?  John Malone believes it to be so and would like to merge TWC with Charter to find more efficiency and lower license fees with a larger footprint to serve.  It may still end badly as customers are not happy with the high cost of cable and the wish to cut those costs through a la carte and lesser number of channels in cheaper packages. 

Also, consumers are placing more importance on broadband service and higher speeds than on its cable subscription.  And that may soon turn our cable companies into dumb pipeline providers.  Unless the pricing model for cable subscriptions gets reworked, that is the future we are seeing.