Report: Time Warner Considers Getting Rid Of The Cable

from the cutting-the-wire dept

The Wall Street Journal is reporting that Time Warner is looking for ways to reduce its exposure to cable TV. Management is said to be concerned that cable won't always be as lucrative as it is now, particularly as the internet grows as a reliable option for watching video. The company has already spun off its Time Warner Cable unit into a separate company, but it retains a sizable stake in it. The company is unlikely to exit the line entirely, as it remains a steady cash cow. In fact, from a revenue perspective, it's the company's largest line of business. But there's pressure on the firm to invest more heavily into the internet, which represents the company's best hope for future growth. One problem, however, is that by reducing its cable business, it becomes more dependent on its slow-growing content business, such as films and publishing. These remain quite big as well, and could easily prove to be a drag on the company's internet operations. Another worry is that even if the company does invest heavily on the internet, there's no guarantee that it will be prove profitable. Obviously, the company hopes that it can buy or build the next MySpace, but that's a long shot proposition. What's funny about this report is that it comes at the same time that Comcast, a competing cable operator, is raving about its operations, claiming that the cable business is "on fire". Part of it may be that Comcast doesn't have Time Warner's breadth, so it has no choice but to be bullish about cable. It could also be that Time Warner is looking further into the future than Comcast, recognizing that today's good times may not last forever. Then again, the last major move that Time Warner made to bolster its internet business came to be regarded as the most disastrous merger of all time.


Reader Comments (rss)

(Flattened / Threaded)

  1.  
    identicon
    anonymous coward, Apr 17th, 2007 @ 10:13am

    if you are just barely competent enough run a business that is in, most markets, a monopoly, are you really qualified to run a business in an industry with no government protection at all? let alone one that is incredibly fast-paced and aggressive?

     

    reply to this | link to this | view in thread ]

  2.  
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    Anonymous Coward, Apr 17th, 2007 @ 11:16am

    Online is the place to be

    I think Time Warner should invest heavily in something internet related. Probably something big with a huge base of loyal users already built up that they could market content to. Something like AOL.....oh.....wait...

    Ummmm....Nevermind.

     

    reply to this | link to this | view in thread ]

  3.  
    identicon
    Overcast, Apr 17th, 2007 @ 11:44am

    Love watching these big companies grash for straws.

    What they don't seem to understand is - success on the internet has a LOT to do with new ideas and innovation. And very little to do with 'big corporate' palm greasing, anymore I think all these big companies are just too comfortable with the 'status quo' and don't focus on what the consumer wants.

    Like the recording industry, they have been more or less doing the same thing for the last 40+ years....

    What is it they say about teaching an old dog new tricks? Perhaps that's true afterall.

     

    reply to this | link to this | view in thread ]

  4.  
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    Ajax 4Hire, Apr 17th, 2007 @ 11:47am

    Re: Online is the place to be

    It was actually the other way around.
    AOL bought Time-Warner.

    So a large internet presence tried to get into the cable distribution and content creation business.

    I think Time-Warner survived in spite of the AOL merger.
    It is now time for Time-Warner to become two separate companies:
    A content creator (Movie Studio) and
    A content deliverer (Cable/Internet provider).

     

    reply to this | link to this | view in thread ]

  5.  
    identicon
    Ajax 4Hire, Apr 17th, 2007 @ 11:51am

    There is a big storm brewing on

    the horizon between the Telco and Cable Operators for the business of internet traffic.

    One day the CableTV as we know it will be gone, replaced by Digital services. Then Cable Companies will compete as internet providers that also supply entertainment (what you know as CableTV today).

    The other side is the old style Telephone companies trying to beat Cable to the home with high-speed digital service in the form of DSL or Fiber.

    Both want to sell you/us controlled digital two-way (sounds like the internet) traffic. That traffic could be an Internet connection, a Digital Cable Box, In-Home Gaming platform (XBox, PS2345) or some other as yet undreamed network content.

     

    reply to this | link to this | view in thread ]

  6.  
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    RandomThoughts, Apr 17th, 2007 @ 6:22pm

    Cable faces quite a few challenges in the near term. They will find it very difficult to compete with the telco's fiber offerings without huge investments in their networks. Investments that Wall Street will not take kindly to as Cable has told them they wouldn't need additional investment.

    Might be a good time for TW to off the C.

     

    reply to this | link to this | view in thread ]

  7.  
    identicon
    Anonymous Coward, Apr 18th, 2007 @ 6:24am

    Re: Re: Online is the place to be by Ajax 4Hire

    actually, TimeWaner bought AOL. the tradmark names show Time as the holder. which the only way that could be, is if Time owns AoL.

    it wasn't such a bad move as everybody thinks. from a business perspective. ..

    and as an employe of TWC. changes are being made in the company. most of which, suck for the current employees, but benefit the customers.

     

    reply to this | link to this | view in thread ]


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