TWC CEO Says Carriage Not Guaranteed for Low-Rated Networks
Underperforming pay-TV networks may have trouble renewing their carriage agreements with Time Warner Cable. CEO Glenn Britt told investors at a UBS conference Monday that the Time Warner Cable will seek to eliminate little-watched networks from its channel lineup. “As our programming contracts come up for renewal, we're going to take a hard look at each [programming] service,” Britt said. “Those services that cost too much relative to the viewership or value of the service, we're going to drop them,” or put them on a different tier, he said. “We can’t keep carrying these giant packages of things with services that don’t carry their own weight."
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Carriage on Time Warner Cable’s systems is not a birthright, Britt said. In the past, the cable operator has been willing to work with owners of struggling networks during renewal talks, Britt said. But now “if you have a network that’s getting ‘hashmark’ ratings and there’s no real sign it’s going to get better and your contract is up, we're going to have a different conversation than we might have had five or six years ago."
Cable operators need more freedom to create smaller packages of programming networks or consumers may not be able to afford the service much longer, Britt said. The company is already offering a slimmer bundle of channels in its TV Essentials product when customers call to cancel service, he said. But he stopped short of calling for so-called a la carte cable. That would lead to a much riskier environment for programmers, leading to less quality programming being produced, he said. The end result of an a la carte industry would look be something that resembled Broadway, where investors make bets on individual productions, which often flop, he said.
"We all know that the big packages work for the content companies and little packages don’t,” Britt said. “But at some point this whole thing has to be responsive to the people who ultimately pays the bills and that’s the consumer."
Discussing Time Warner Cable’s broadband business, Britt said its usage-based pricing plan has not been very popular with customers. The service gives subscribers a $5 monthly discount if they stay under a monthly usage threshold. “It probably won’t surprise you that not many people have taken the lower offer and that’s fine,” he said. The idea behind the plan was to “get this idea into the marketplace,” he said.
Meanwhile, Britt said he’s confident Time Warner Cable can continue increasing the broadband speeds the company offers without spending much. “We have a route to ever faster speeds,” he said. “As demand changes and the market changes, we've been increasing speeds, so expect us to keep doing that.”