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Time Warner Cable CEO Remains In Denial About Cord Cutting

Broadband

from the it's-very,-very-real dept

Wed, Sep 28th 2011 02:37pm -

There’s growing evidence that hordes of people are cutting the cord from cable TV, with many realizing that it’s just way too expensive for what they get — and compared to alternative options. But, as they have for years, it appears that the cable execs remain in total denial (at least publicly) about this. Time Warner Cable’s CEO, Jeff Bewkes, was quoted recently as saying that cord cutting “hasn’t arrived yet,” despite massive customer defections. Of course, to explain this, Bewkes falls back on the other claim that we’ve seen before: people aren’t cutting the cord because of alternatives, but because of the bad economy and the fact that they have no job. Sounds good. But it’s a myth. You see, just a week or so before he said those words, a research report came out noting that cord cutters tend to be young, well educated and employed. Kinda makes you wonder what sort of strategy the cable guys are preparing to deal with this issue when they refuse to even admit it’s an issue. Pretending that the tide isn’t coming in may be worse than pretending you can hold back the tide.

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Companies: time warner cable

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Comments on “Time Warner Cable CEO Remains In Denial About Cord Cutting”

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91 Comments
surfer (profile) says:

Re: Re:

hilarious..

I got to educate another person today, she was actually paying for movie rental, when she mentioned she has a friend that watches new releases, and could not understand how that was possible. Being a novice user, I gave her homework over a 3 day period, and now enjoys any movie she wants, when she wants, where she wants.

kinda like ppv on demand, without the paying part.

the_ancient says:

Re: Re: Re:3 Re:

I had AT&T Business DSL at a company I worked it, I always loved it when it went down (atleast once a month, crappy service) and I had to call to find out how long it would be down, they always had a message “Be sure to log on to our website for faster help” Well if I could get online I probably would not be calling……

GNS (user link) says:

Re: Declining Subs not at issue

They’re not in denial, just sugar coating the news for share holders. In the end it doesn’t matter because well documented stats (see Comcast annual reports) show paid video subs declining – for whatever reason.

Expect TWC to make some moves emphasizing the role as bandwidth provider (which you still need to cut the cord). An even bigger move would be to jump in to an all a la carte streaming model.

http://cordcutterguide.com/

Bob V (profile) says:

7 hours per weeks of tv for a employed person at say $70 is $10 per hour of tv vs say 21 hours for an unemployed person per week at the same price point works out to $3.34 per hour of tv.

The employed person will be more likely to have the extra money to go out to a restaurant/bar for dinner and drinks with friends or to go out to a movie or many other activities. Time is a finite resource.

JEDIDIAH says:

Re: Re: Been there, Done that.

I have been budgeting an amount equal to what I pay for cable for a number of years now since I’ve had the media server. In that time I have acquired about 1800 DVDs.

These days, that can fit in any 4 or 5 drive external array that you might find in a store like Frys.

The end result looks a lot like AppleTV or Netflix or Hulu but with better quality and playback features and a much wider selection of titles.

nasch (profile) says:

Re: Re: Re: Been there, Done that.

The end result looks a lot like AppleTV or Netflix or Hulu but with better quality and playback features and a much wider selection of titles.

I don’t think that word “wider” means what you think it means. Netflix has well over 10,000 titles on DVD, so if they have even a quarter of that available for streaming, it’s quite a bit more than your 1800.

JEDIDIAH says:

Re: Re: Re:2 Been there, Done that.

You’re funny.

Netflix streaming just sucks. It sucks so much that quite often a Netflix user will find themselves falling back to the physical media catalog. That was actually a very handy aspect of their old approach.

The streaming service has limited availability of titles, a reduced selection within the titles it does have, and tends to “expire” things so that you can’t access them anymore.

The cost of being cheap can actually be quite high.

Anonymous Coward says:

Among my friends here in Toronto (not exactly Time Warner territory I admit, but still), not one of them has cable. Neither do I. All of our television watching is done thanks to the Internet, and it has nothing to do with money and everything to do with watching what we want when we want how we want.

Cable might not be dead yet, but it won’t last forever.

Anonymous Coward says:

Re: Re: Re: Re:

Joe, what you are failing to understand is that if enough people “adapt around them” they will have nothing to adapt to, because the content will be gone.

Big content isn’t going to make stuff for free. The more people “adapt” (nice term for piracy there), the more they shoot themselves in the foot.

It’s just like shrinkage in a store. They can handle a little bit, but when it starts turning out that more people are stealing than paying, the business model is broken and can’t be fixed. The problem isn’t the store, the problem is the people who think that taking whatever they want whenever they want is acceptable.

FarSide (profile) says:

Re: Re: Re:2 Re:

what you are failing to understand is that there is lots and lots of good content that doesn’t come from “big content”

Not to mention the cost of producing content has dropped dramatically over the last decade – just look at how good some homemade youtube videos are.

This is one case where the competition is crazy, and there are insane numbers of competitors. Based on that alone, The current high price model can’t last forever. All they can do is prolong it a few years, but eventually it will come crashing down.

Increased numbers of cord cutters will facilitate this process. As the current young generation becomes adults, they will know instinctively how overpriced some of the content costs them. The current models will not survive that.

fogbugzd (profile) says:

At least the cable execs know the term “cable cutting” and are at the stage of being in denial. There are people upstream from them that seem to be assuming that cable TV will be their main programming outlet forever.

One day very soon there are going to be a lot of network and sports executives that are going to wake up and realize that their main outlet for the last few decades has dried up. They will realize that people have moved to all of those Internet outlets that the networks have neglected for so long. All of that stuff that they had considered “Premium Content” that the networks produce is not going to be in much demand because the alternative channels have already filled with alternative and reasonably priced content.

Bill Jackson (profile) says:

Re: What do they care?

In Canada we still have a tariffed service that was designed for home and business alarms. They call it dry DSL, over a burglar alarm line you rent from the telco and your DSP provider equips it at your house and their office with DSL modems. I have had it for three year now, works fine, place is called http://teksavvy.com/en/

I use a cell phone.

South of Boston says:

Young?

I’m 56, and I have to overpay for Comcast monopoly (no DSL available). So a year ago I downgraded to basic TV (just the OTA channels for $5/mo) and kept the broadband. I built a HTPC ($400), and using Win7 built-in DVR, enjoy HD ClearQAM network shows, stream other shows thru Hulu and ComedyCentral, and even replaced my landline with Ooma. Even though I’m employed, I enjoy saving $150/month. I could have stayed with Comcast if they had a-la-cart offerings.

Anonymous Coward says:

Re: Young?

You are not the only one.

$150 per month = $1800 per year = $18K in 10 years.
If you are 30 years old you got 35 years to save money that would be $63K.

I can only speak to myself but seriously, I would rather spend $150 dollars a month in other things like a savings account for future medical expenses, kids parties, travels and the evil but necessary insurance for the whole family.

TV doesn’t do you any good most of the time, it is not education, it is not investment it is a luxury that most can’t afford at the moment and it keeps getting more expensive each year.

Instead of cable if my kids were growing up I would save that money to buy them a car or pay for that sweet sisteen party or wedding.

80% of Americans live in the less than 30K bracket so I’m willing to bet that they can think of better ways to use that much money instead of throwing it out.

The Logician says:

Misread

Curious. As I was reading the article, my mind made a most fascinating error. I read the following sentence incorrectly, albeit unintentionally:

“Time Warner Cable’s CEO, Jeff Bewkes, was quoted recently as saying that cord cutting “hasn’t arrived yet,” despite massive customer defections.”

What I read instead was this:

Time Warner Cable’s CEO, Jeff Bewkes, was quoted recently as saying that cord cutting “hasn’t arrived yet,” despite massive customer defecations.”

While the second version is certainly not accurate in a literal sense, I would surmise that most of those, myself included, who have cut the cord do think of cable as little more than excrement.

Such limited and controlled services are no longer necessary or desirable in an age where technology has enabled the end users to determine what, where, when, and how they will interact with content. Those companies that do not recognize this will not live long. Nor will they prosper.

out_of_the_blue says:

Re: Misread -- @ "The Logician": schtick failure.

If you’re going to use THAT appellation, try to grasp that your /mis-reading/ isn’t of any use to us. Correct your known error in your mind, don’t inform us of how unreliable your abilities are, we’ll downgrade your input.

2nd, “… I would surmise that most of those, myself included, who have cut the cord do think of cable as …” — logically says that you “surmise” the contents of your own mind. Hmm.

out_of_the_blue says:

INTEND is THE key word here.

“13% of Americans **intend** to cut the cord in the next 12 months”

“For the second consecutive year, our survey research clearly indicates that those who **intend** to cut the cord are high value, high-revenue customers?not the deadbeats they have been made out to be.”

AT BEST this survey PREDICTS! Just as every year are pieces on resolutions from people in the 200-250 pound range to get off the couch and exercise. These yuppies know TV is bad so they SAY in this survey they’re going to stop.

Since none of you bothered to read the underlying pieces, your concusions are complete hooey. This Bewkes probably has actual numbers that ‘cord cutting “hasn’t arrived yet,”‘.

Another case of wild extrapolation, Mike.

Hans says:

So where are the cord-cutters getting their Interwebs?

Recently I’ve heard several people say they’re “dropping” cable (Comcast territory), but want the *fast* internet that only cable can provide. Comcast won’t sell internet without “basic cable” bundled in, so they wind up paying for but not using it. Comcast gets an extra $18 and gets to claim the cord wasn’t cut.

I get the best DSL I can, which is a whopping 3M from a local ISP (via Frontier).

So where are the cord-cutters getting their Interwebs?

Anonymous Coward says:

If I was on the board I would vote to fire the CEO for ignorance and lying. How about instead of trying to “trick” investors into thinking that your business model doesn’t need to change, you actually act like a CEO and offer up some corporate strategy.

That my sound ranty, but I really don’t care. I would never invest in any telecom. Their ‘innovation’ plans are always just ways to siphon money away from less technologically informed people (which usually is everyone but young, educated, and employed people).

Magic TV (profile) says:

Time Warner,Comcast,Etc...

Monopolies only last so long in a free market society.

It is only a matter of time until all of Time Warner’s competitors (Mainly Comcast & AT&T) offer a high speed internet only package instead of a bundling it with cable TV.

We had to take apart a few Google TV’s , Roku’s and Apple TV’s in order to create our software as we wanted to have all the functions of the above listed devices.

Try our Magic TV Software for Windows free for 30 days, no installation required. Our website as always is free.

The era of Free Cable TV has arrived; enjoy the shows.

New Era Distributing Co.

Anonymous Coward says:

I got fed up with it 10 years ago.

Maybe 2 or 3 programs a month I would look forward to and the rest was either trash channels or reruns. When I got to realizing the only reason the dang thing was on was to provide background noise the rest of the time, I got rid of cable.

I’ll not be back as a customer. It was far to expensive then for what it was worth. It hasn’t gotten better over time. The blessing of doing without commercials was worth it for that alone.

I no longer own a tv set and I am not planning on buying one.

Jim says:

A Different Perspective

(Full disclosure, I’m a TWC employee)

Perhaps its just me, but what I’m not understanding is why people are complaining about a service – I’ll use my area’s triple play for example – which is (for the 1st year) about, $3.66 per day, and slightly higher every subsequent year, as prices go back to their normal rate.

Call me crazy, but 3.66 per day (unless you are poor) is a pittance. Considering that infrastructure is always updated, we don’t charge for trouble calls (I know from personal experience most of the other ones do), and we continue to add more channels; which if we really wanted to break it down comes to about $1.22 (for cable).

If we further divide this $1.22 (when we offer about 600+ channels) per channel; incidentally, this was me breaking down a friends bill.

Now consider our competitors: charge for trouble calls, have hidden install fees, require contracts, and other shenanigans and I’m not seeing the complaint. I’m really not. Feel free disagree, but the fact remains the service is really not expensive.

Anonymous Coward says:

Re: A Different Perspective

I think you’re missing the point.

If I’m sitting at the pooter playing a game, I’m not watching cable. If I’m getting my news from the interwebs, then I’m not watching cable. If I’m streaming youtube clips, I’m not watching cable. If the broadcast tv is on, I’m not watching cable. If I’m running a film from netflix, I’m not watching cable.

If 3.66 per day is affordable, then there’s not many hours in the day to spend it. If using cable represents 15% of my available leisure time, how is it worth as much as my electricity bill?

It isn’t.

Joe Publius (profile) says:

Re: Re: A Different Perspective

I’d give the guy a break, at least he is willing to admit who he works for.

For a good answer Jim, read the AC response. There is a new group of consumers who use the internet to access information and entertainment at such a volume that a traditional cable TV package no longer makes sense at any price.

My prediction is that this group will grow in size and in the long run make the current cable TV service, as it is, less and less profitable. Companies that find adaptations now will be able to mitigate the damage, or perhaps even find an offering for the new market.

Butcherer79 (profile) says:

Re: Re: Re: A Different Perspective

“I’d give the guy a break, at least he is willing to admit who he works for.”

Without “(Full disclosure, I’m a TWC employee)” would we really not have guessed?
Either way, if I didn’t say it, someone else would have and I’d be forced to laugh at somebody else’s wit and humour rather than my own… (sarcasm added)

Jim says:

Re: Re: Re: A Different Perspective

Joe, this is true, and I do recognize that. Of course as times change, we will also I’m certain. Just like, I recognize that more and more amateur content creators are creating content they like, rather than watch shows from the big producers.

I guess my point would be at the moment, cable and / or satellite services still represent the best way to access digital content… for now. In the long term is anyone’s guess.

John Fenderson (profile) says:

Re: A Different Perspective

You can’t do the math for the first year of the triple play. Or at least, that’s not how I would do it. It’s a temporary price. It’s better to do your math with whatever the service actually costs once the year runs out.

Even taking the artificially low numbers, though, cable is still not a bargain. Sure, you get hundreds of channels, but (for me) there is almost never anything that I want to watch when I want to watch it. This makes the math simply terrible. The last time I figured it, I was paying something like $3-$5 per show that I actually watched.

So I cut the cable years ago.

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