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Time Warner Cable Tests “Skinny Bundles” of Major Networks, HBO, Showtime for $10/Mo

Phillip Dampier April 18, 2016 Competition, Consumer News, Online Video 5 Comments

20 CHANNELWhile cable operators continue to deny cord cutting is real, their marketing departments think otherwise and are responding with slimmed down cable TV packages showcasing premium movie channels at a non-premium price.

This week, Time Warner Cable began offering a $10 add-on video package of over-the-air major network stations for new customers in Manhattan signing up for 50/5Mbps broadband service ($39.95 a month alone on a one year promotion in TWC Maxx markets). Oh did we forget to mention that $10 also includes both HBO and Showtime — the same networks Time Warner sells to everyone else for about $16.95 a month each?

At $10 a month, the package is a steal if you are still interested in local live/linear TV and movie channels. XFINITY Stream for Comcast is comparable, but Comcast extracts $15.99 a month for almost the same thing.

Time Warner Cable is obviously targeting disinterested Millennials that might otherwise skip television or consider the $20 Sling TV package instead.

But the cable company is downplaying the package and its price.

Time Warner Cable CEO Rob Marcus likes to remind investors at least 80 percent of Time Warner customers still subscribe to the big 200+ channel cable TV package, and Time Warner has hardly been a pioneer of “skinny bundles” that cut down the TV package to just the essentials.

Despite those assertions, the number of Americans willing to drop cable television continues to increase… and fast. Convergence Consulting notes the industry lost 283,000 video customers in 2014 and 1.1 million in 2015 — a four-fold increase. Convergence estimated at least another 1.1 million will cut the cable TV cord this year in what could become “the new normal.”

Video consumers are turning instead to on-demand, online viewing, which can provide commercial-free and binge viewing opportunities. Both Millennials and Generation X viewers are trending towards shows, not channels and networks, and many would never know (and fewer still care) what channel they were watching without the identity bug perpetually attached to the lower right of the screen.

Eventually, cable television service will likely occupy a part of a fat IP-pipe free-for-all, where viewers can still watch linear programming if they wish, but are more likely going to customize a much more personal viewing experience online instead.

After Waiting Forever, Boston is Finally Getting Verizon FiOS

verizon bostonThe long wait for fiber optic broadband in the city of Boston is finally over.

In a surprise announcement with Boston Mayor Martin J. Walsh and Verizon officials, Verizon announced it will commit to at least $300 million in investments over the next six years to bring fiber to the home service to residents of the metro area.

Construction of the fiber-optic network will be completed on a neighborhood-by-neighborhood basis according to customer demand. Initially, the project will begin in Dorchester, West Roxbury and the Dudley Square neighborhood of Roxbury in 2016, followed by Hyde Park, Mattapan, and other areas of Roxbury and Jamaica Plain. The city has also agreed to provide an expedited permitting process to encourage the project.

“Boston is moving faster than our current infrastructure can support, and a modern fiber-optic communications platform will make us a next-level city,” Walsh said in a statement.

“This transformation isn’t just about advanced new fiber-optic technology — it’s about the innovative services this platform will allow people to create and use, today and in the future,” Verizon Wireline Network president Bob Mudge said in a statement.

Bringing FiOS inside the city of Boston will challenge the de facto monopoly Comcast had held for years. The only alternative most residents have is Verizon DSL.

The dramatic turnaround came six months after Verizon adamantly told the Boston City Council Verizon FiOS expansion was dead. Verizon announced it would stop FiOS expansion in 2010 to concentrate on its existing FiOS commitments and better marketing the service to attract more customers.

The sudden end to FiOS expansion six years ago caught many cities by surprise. As a result, in several areas, the fiber service is only available in select suburbs and not city centers.

Verizon’s unions have also pushed for further FiOS expansion, but today’s announcement is expected to have no impact on plans by the Communications Workers of America and the International Brotherhood of Electrical Workers to strike Verizon starting early Wednesday morning.

The partnership also covers Verizon Wireless and its plans to attach wireless equipment to city street lights and utility poles without a lengthy permitting process.

Verizon was also likely offered a much easier time securing a license to offer cable television service, a stumbling block Verizon has experienced in several large cities.

Echoing Google Fiber, Verizon will try to win itself some free marketing and buzz by giving residents a chance to compete to see what neighborhoods get FiOS first. A free online registration process will be used to assess demand and help Verizon prioritize its fiber-optic network construction schedule.

Verizon will also support digital initiatives for the income-challenged, including a $100,000 Digital Equity contribution to the city, offered to support a mobile hotspot lending program at the Boston Public Library enabling Internet access to families on an as-needed basis.

Boston neighborhoods marked "A" will be upgraded to FiOS first, followed by "B" and so on. The upgrade effort is expected to take at least six years.

Boston neighborhoods marked “A” will be upgraded to FiOS first, followed by “B” and so on. The upgrade effort is expected to take at least six years.

Time Warner Cable Reminds Los Angeles About Outrageous Cost of Sports TV

Phillip Dampier March 29, 2016 Consumer News Comments Off on Time Warner Cable Reminds Los Angeles About Outrageous Cost of Sports TV

SportsNet-LA-logoA bone toss by Time Warner Cable (just over a week before the opening of baseball season) to get Southern California satellite and cable providers to pick up carriage of the Los Angeles Dodgers’ SportsNet LA at a discount has backfired and further inflamed critics of the cost of sports programming.

Now two years old, the cable channel jointly owned by the Southern California division of Time Warner Cable and the Los Angeles Dodgers has been a sore spot for sports fans who don’t subscribe to Time Warner Cable or Charter Communications — the only two major providers offering the sports channel. It is the exclusive home of all-things-Dodgers and the Major League Baseball team was well compensated by Time Warner Cable with $8.35 billion for the 25-year deal.

Because of the huge amount of money on the line, Time Warner Cable priced SportsNet LA at $4.90 a month wholesale per subscriber — a stunning amount for a channel devoted to a single sports team. Providers serving Southern California, including DISH, DirecTV, Verizon, Cox, and AT&T, refused to carry the channel, and for two years Dodgers games have not been seen by more than half the region’s pay TV customers.

dodgersThe issue has sparked outrage among sports fans and politicians, who have complained about the ongoing impasse between Time Warner and other providers. Only Charter Communications, now in sensitive negotiations with the California Public Utilities Commission over its acquisition of Time Warner Cable, relented and agreed to pick up the channel for its customers last summer.

Time Warner Cable has consistently refused to allow the channel to be sold a-la-carte. Instead, every cable TV customer has to pay to make Time Warner’s expensive deal with the Dodgers pay off for the cable operator. Because other companies have consistently boycotted the network, Time Warner Cable has lost a reported $100 million a year from SportsNet LA.

That may explain why this year Time Warner Cable suddenly announced it would offer one year of the channel at a discount – $3.50 a month wholesale, closer in line with other regional sports channels.

Under normal circumstances, the price cut should attract other providers to get a deal signed, but these are not normal times in the cable television business.

Time Warner’s offer has been met with angry accusations of hubris in the Los Angeles sports press. None of the providers boycotting the channel seem interested in the deal either. The reason? The discount only lasts one year, after which the price shoots back up.

Imagine the customer service call centers at DirecTV and Verizon taking heated phone calls in March 2017 when the sports channel gets dropped for its too-high renewal rate.

hostage“Why would anyone give everyone a taste of something for a year?” Mark Ramsey, a media consultant based in San Diego, told the Los Angeles Times. “All the leverage goes to the seller, not the buyer. It’s a temporary fix. This is not a free sample for Sirius XM. Dropping a channel is worse than not carrying a channel.”

Cable subscribers, particularly non-sports-fans, are also incensed at the prospect of their TV bill going up $3.50-5.00 a month for a single channel.

The dispute continues to fuel speculation that these kinds of money disputes are sure to hurry the demise of the one-size-fits-all cable TV package. Around one-quarter of Americans don’t subscribe to cable or satellite and less than two-thirds of those that do are adults 18-29. That demographic reality spells eventual doom. Cable TV is increasingly a must-have service only among older Americans. At least 83% of those 50 and older subscribe to cable television. That number drops to 73% for those aged 30-49. The younger you are, the less likely you see a need for cable television.

As a-la-carte alternatives grow, an ever larger percentage of Americans are expected to abandon the cable package. So far, the only party that doesn’t seem to care much either way is the Dodgers — they got their $8.35 billion and can sit on it for the next two plus decades.

Time Warner Cable likely underestimated the blowback on its wholesale pricing plans for SportsNet LA, but seems happy enough for now to offer only a temporary discount. But it also gives their customers another excuse to scrutinize their cable bills, which now include a “sports programming” surcharge, and scream for a-la-carte across the board.

“So, I am supposed to be excited that TWC is going to lower the price of the Dodgers to other providers? Right?,” complained Scott Bryant from Apple Valley. “Now myself, and others who could care less about the Dodgers will be forced to add another $3.50 a month to get the Dodgers, a team I could care less about? This is a joke, right? It’s time to force all cable/satellite providers allow us to pick our own channels and pay for what we want. This is nothing more than corporate welfare. When I see another added fee to my bill for local sports coverage, I will do it, too! I’m an Angels fan. Forcing me to pay for the Dodgers is criminal. I’m a sports fan, but this is out of control. Where are my scissors?”

FCC Prepares to Approve Charter-Time Warner Cable-Bright House Merger

mergerDespite clamoring for more competition in the cable industry, FCC chairman Thomas Wheeler is reportedly ready to circulate a draft order granting Charter Communications’ $55 billion dollar buyout of Time Warner Cable, with conditions.

The Wall Street Journal reported late last night the order will be reviewed by the four other commissioners at the FCC and could be subject to change before coming to a vote.

Wheeler’s order is likely to follow the same philosophical approach taken by New York State’s Public Service Commission — approving the deal but adding temporary consumer protections to blunt anti-competition concerns.

Most important for Wheeler is protecting the nascent online video marketplace that is starting to threaten the traditional cable television bundle. Dish’s Sling TV, the now defunct Aereo, as well as traditional streaming providers like Hulu and Netflix have all been frustrated by contract terms and conditions with programmers that prohibit or limit online video distribution through alternative providers. The draft order reportedly would prohibit Charter from including such clauses in its contracts with programmers.

fccCritics of the deal contend that might be an effective strategy… if Charter was the only cable company in the nation. Many cable operators include similar restrictive terms in their contracts, which often also include an implicit threat that offering cable channels online diminishes their value in the eyes of cable operators. Programmers fear that would likely mean price cuts as those contracts are renewed.

Wheeler has also advocated, vainly, that cable operators should consider overbuilding their systems to compete directly with other cable operators, something not seen to a significant degree since the 1980s. Cable operators have maintained an informal understanding to avoid these kinds of price and service wars by respecting the de facto exclusive territories of fellow operators. Virtually all cable systems that did directly compete at one time were acquired by one of the two competitors by the early 1990s. It is unlikely the FCC can or will order Charter to compete directly with other cable operators, and will focus instead on extracting commitments from Charter to serve more rural and suburban areas presently deemed unprofitable to serve.

gobble-til-you-wobbleMost of the other deal conditions will likely formalize Charter’s voluntary commitments not to impose data caps, modem fees, interconnection fees (predominately affecting Netflix) or violate Net Neutrality rules for the first three years after the merger is approved. As readers know, Stop the Cap! filed comments with the FCC asking the agency to significantly extend or make permanent those commitments as part of any approval, something sources say may be under consideration and a part of the final draft order. Stop the Cap! maintains a cable operator’s commitment to provide a better customer experience and be consumer-friendly should not carry an expiration date.

It could take a few weeks for the draft order to be revised into a final order, and additional concessions may be requested, a source told the newspaper.

Meanwhile, the California Public Utilities Commission (CPUC) is still reviewing the deal. News that the FCC is prepared to accept a merger is likely to dramatically reduce any chance California regulators will reject the merger out of hand. Stop the Cap!’s Matthew Friedman is continuing discussions with the CPUC to bolster deal conditions to keep usage caps, usage-based billing, and other consumer-unfriendly charges off the backs of California customers. New York customers will automatically benefit from any additional concessions California gets from Charter, as the PSC included a most-favored state clause guaranteeing New Yorkers equal treatment. Any conditions won in California and New York may also extend to other states to unify Charter’s products and services nationwide.

An independent monitor to verify Charter is complying with deal approval conditions is likely to be part of any order approving the transaction, although critics of big cable mergers point out Comcast has allegedly thumbed its nose at conditions imposed as part of its acquisition of NBCUniversal, and only occasionally punished for doing so.

47% of Americans Would Switch Providers After One Bad Customer Service Experience

Phillip Dampier February 16, 2016 Competition, Consumer News 10 Comments

Press “1” for inconvenience.

At least half of the country would switch their cable, telephone, or satellite company in a matter of days after a bad customer service experience, if they could.

[24]7’s newly published 2016 Customer Engagement Index surveyed 3,500 customers globally, including 1,200 U.S. respondents, to understand what drives customer behaviors. The survey quickly identified cable and satellite providers among the worst offenders, and for good reason. Customer satisfaction scores for telecom companies continue to rest at the bottom of the barrel.

The survey found almost half were ready to bolt after a single bad experience dealing with customer service, whether it was with a dead-end interactive voice response menu that took them nowhere, to long hold times, to being asked the same questions over and over again as their call is transferred, to unresponsive customer service agents that never resolved the issue to a customer’s satisfaction.

Millennials increasingly prefer to work with self-service options and tolerate a ponderous experience with telephone-based customer service less. Having a website or app that can manage your account is well-appreciated by a growing number of customers that dread having to call anyone to resolve a problem.

“The way customers engage with brands has dramatically shifted, yet many enterprises’ approach to customer service and sales is stuck in yesterday’s paradigm,” [24]7 founder and CEO PV Kannan said in a statement. “For this reason, it’s more important than ever for brands to be where their customers are, and allow them to engage on their own terms. Companies that fail to prioritize the customer experience risk falling behind.”

Right now cable and satellite companies are failing a lot of their customers, scoring lowest with only a 59% customer satisfaction score. Internet providers only score marginally better at 63%.

cust satis

Anger at poor service has led to 47% of consumers saying that they would take their business to a competitor within one day (if price and products are of equal value), while 79% say they would do it within one week. Millennials and GenX customers are less patient than Baby Boomers and those in the Greatest Generation.

Lucky for telecom companies many customers don’t have anywhere else to take their business. For most, finding a provider offering at least 25Mbps broadband that isn’t the cable company is impossible. Many phone companies don’t offer competing cable television and broadband is a problem if you subscribe to satellite TV. That may explain why many Comcast customers don’t believe the cable company is trying hard enough to improve customer service. They don’t have to.

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