The original Yule Log

Time Warner Cable is going extreme.  Refreshing last year’s reboot of the timeless holiday tradition of The Yule Log, the cable operator is unveiling a new 3D Holiday Fire experience for subscribers equipped with a 3D-ready television (and appropriate glasses) to make the crackling fire come alive.

The concept of running a looped film of a roaring fire backed by traditional Christmas music was made famous by WPIX-TV in New York and the nation’s cable systems that used to carry the “superstation” well beyond its local coverage area in New York, New Jersey, and Connecticut.  Fred Thrower, then-president and CEO of WPIX, envisioned showing several hours of a crackling fire Christmas Eve as a gift to New Yorkers who lacked fireplaces.  “Yule Log” premiered in 1966, simulcasting the easy listening Christmas music fare from WPIX-FM.

Originally, a fireplace at the governor’s mansion entertained viewers.  But the 17-second long 16mm film loop quickly deteriorated after two holiday seasons.  The Yule Log that most New Yorkers (and the rest of the country) are most familiar with was filmed on 35mm stock in 1970… in California… in the middle of a scorching hot August.  Viewers had caught on to the short-looped film in the original, but detecting the splice in the later version was much harder.  A clue: it happens at around 6 minutes, 3 seconds into the full screen fire.

For 23 years, WPIX ran the traditional Yule Log program for 2-4 hours Christmas Eve.  It was a ratings sensation, which probably says something about the quality of 1970s television programming, and it was soon duplicated by others.  It disappeared for a time during the late 1980s, but was brought back to comfort New Yorkers during the 2001 Christmas season, post-9/11.  Now a facsimile is available for free, on-demand, anytime during the holiday season from Time Warner Cable, along with repeats of last years’ offerings — “Winter Green” – snow falling on pine branches, and the self-explanatory “Snowman.”  Subscribers can find them under the “Yule Log” category on the Free Movies on Demand and Movies on Demand channels.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/WPIX Yule Log.flv[/flv]

For those who prefer the original, here is a portion of WPIX’s version of The Yule Log from Christmas Eve, 1983.  (9 minutes)

Time Warner Cable experienced another challenging quarter, continuing to lose cable TV customers who either drop or pare back their television service, often in favor of broadband.

The company reported losses of an additional 128,000 video subscribers during the third quarter, but is partly winning that revenue back with new broadband customers — 89,000 of them in the last three months.

“Broadband is a powerful service for which there appears to be unquestionable consumer thirst,” Time Warner Cable CEO Glenn Britt said on the investor call. “Over time, we will contribute more of our plant’s capacity to broadband.”

The company is also poised to expand its marketing to win new broadband customers away from their primary competition — telephone company DSL service.  Company officials remain confounded by customers who subscribe to Time Warner’s cable TV service and take broadband from “inferior” phone company-delivered DSL.  Time Warner will continue to target these customers with win-over promotions offering a year of Road Runner Standard Service at the $29.95 promotional price point.

For the company as a whole, this is the tenth consecutive quarter of year-over-year residential broadband revenue improvement, coming from a combination of higher-priced, faster speed tiers, price increases, and subscriber additions.  The company’s DOCSIS 3 upgrade has proven itself a winner for customers and the company, with 18 percent of Time Warner subscribers now choosing 30 or 50Mbps broadband services.

Wall Street expressed some concern about statements from CEO Glenn Britt that the company was going to expand capital spending on broadband to handle increasing demand, especially from online video.  That concern comes despite the fact the company’s “capital intensity” (spending) from January-September was the lowest in the history of the company.  The full year’s capital spending is on track to reach up to $3 billion, which is consistent with what the company spent last year.

Glenn Britt

So despite the plans to spend more on broadband, that spending is actually in line with previous years.

In response to an opening question from Deutsche Bank’s Doug Mitchelson, Britt delivered an extended explanation downplaying the company’s spending plans:

In a way, there’s nothing really new here. I think you’ve seen this trend for a while. Our broadband product is very strong.

As most people know, the usage of broadband is skyrocketing, as it has been for some time. And that means that we will need to spend more money on it. We have been already, both in capital and operating expenses.

The great thing about the Internet is lots of third parties dream up lots of new applications that require more speed and more bandwidth. And we anticipate that we’re going to have to devote more capacity to that over time. We will do that by gradually removing our analog signals from our — analog TV signals from our plan. We’ve been doing that over the last several years by migrating to digital using Switched Digital technology. And over the next several years, we’ll be going all digital in the TV space.

I don’t see this driving a dramatic change in our cap spending, I think, to the core of your questions. The spending has been going on for a while, and I think you’re seeing a change in mix. The video spending is going down over time. The business services is going to go up, although it didn’t this quarter. And you’re going to see the spending on broadband going up. But I don’t think the overall trajectory is mutually different.

This quarter, the company’s conference call seemed to embrace greater broadband usage, and pondering Internet Overcharging schemes like usage caps or usage-based billing never came up.  But Richard Greenfield from BTIG alluded to usage in his questions to Rob Marcus, president and chief operating officer at Time Warner Cable.

“I think we’re somewhere in the 7GB a month [range] of downstream bandwidth on a median basis,” Marcus said. “The average is much higher given the disproportionate usage by our high-end users.”

There were plenty of other facts to be gleaned from this morning’s conference call:

TV

• Whole Home DVR service has been introduced nationwide.  In the coming year, Time Warner will begin deploying “home gateways,” which reduce equipment costs;
• Time Warner is testing improved cloud-based set top boxes with home networking capabilities in parts of Syracuse, Los Angeles and Dallas.  These boxes will expand across the country in 2012.  They offer better search capability and deliver an improved user experience;
• 60% of customers reject “triple-play” offers from Time Warner and choose either “single” or “double-play” service instead;
• Much of Time Warner’s revenue growth is coming from rate increases on programming, services, and equipment;
• TV Essentials, the smaller, less expensive video package, is now available in New York City and Northeast Ohio, as well as upstate New York. It will launch nationwide by year end.  Unsurprisingly, company officials admit the less-than-attractive channel lineup has resulted in the vast majority of customers calling about the offering taking the traditional video package instead;
• Customers continue to drop ancillary services to cut their cable bill.  The increasingly expensive DVR box is a new target for cutting, and premium movie channels, adult pay-per-view, and mini-pay services all continue to suffer significant declines in business;
• The Google-Motorola deal will likely have little impact on Time Warner’s set top boxes, which primarily come from Cisco and Samsung.

Broadband

• By the end of the year, Time Warner plans to offer an Android-based TV Everywhere application similar to the existing iPad application, which will also continue to be upgraded to include on-demand offerings;
• Time Warner will make their TV Everywhere service available on game consoles, smart TVs and PCs in the near future;
• New York City customers will soon be able to select from a range of local broadcast stations on the company’s iPad app.  Other markets will start to see local channels added to this app in 2012;
• Major parts of Time Warner’s capital investments this year are: building data centers in Charlotte and Denver, conversion to all-digital in Maine to make room for enhanced broadband, and the continued rollout of DOCSIS 3.0. The company is also continuing to spend significantly on wiring commercial buildings to sell services to business customers;
• TV Essentials customers will soon be offered a “lite user” slower speed discount broadband plan to accompany their video package;
• In Los Angeles, Wideband 50Mbps customers also get 2 gigabytes of 4G/3G mobile broadband for no additional monthly charge on the company-branded Clearwire service. For Turbo Plus and Wideband 30Mbps customers, they can get the same 4G/3G capability for an additional $10 a month. Standard and Turbo customers can get it for an extra $20.  The company’s mobile broadband add-on product has not enjoyed much success with paying customers, however.  Time Warner hopes the value-added bundling of mobile broadband will attract more interest.

Phone

• Cord-cutting is now impacting Time Warner “digital phone” service, too.  Customers are increasingly reluctant to purchase phone service from any landline provider.  Now Time Warner’s regular pricing is starting to cost them business.  Executives revealed Time Warner’s “digital phone” service costs the company $9.06 to provide.  They charge consumers $30.  With that kind of profit margin, the company admits it will have to get more aggressive in pricing to attract new customers (and potentially keep existing ones);
• Time Warner lost 8,000 residential voice line customers last quarter, cushioned by net additions of 13,000 business line customers;
• The company continues to show little interest in selling cell phone products or services, either owned by themselves or others.  Mobile data remains an exception.

A Time Warner Cable customer in the East Village experiencing a cable, phone, and Internet outage Tuesday got an original excuse from a call center employee at the cable company:

The box that controls the cable, Internet, pretty much everything else for Time Warner Cable in my area of the East Village is located in the basement of a building. In order to service this box, Time Warner Cable needs to contact the super of the building and be let in.

The super of the building, according to the service rep, REFUSES TO LET TIME WARNER INSIDE.

“Why is he refusing?” I asked.

“He wants free cable,” the rep responded.

Apparently, Time Warner has tried to reason with the man, but he refuses to budge. Today, he’s refused to answer the door or his phone. He’s cut off all communication.

“It’s a very unusual situation,” the rep said.

The entire story of the hostage crisis is up on Adam Hunter’s blog, along with plenty of comments from fellow New Yorkers upset with the building superintendent, the cable operator, or both.

What made an unusual situation even stranger is the Time Warner employee actually gave out the address of the building where the standoff was occurring, with the not-much-of-a-stretch-notion that perhaps outraged customers might walk down the street and pay the hostage-taker a visit.

“How close are you to 2nd Avenue,” the representative asked.

“I live between 1st and 2nd, closer to 2nd. I’d love to go over there and try to speak with the super to help resolve this,” Hunter replied.

“Well,” the rep said, “I can’t see any reason I can’t give you the address.”

The drama attracted the attention of the Village Voice, who tracked down the alleged offender, only to be promptly hung up on, and a Time Warner representative who actually confirmed the whole story:

“It does appear that we had an issue with accessing the building where one of our nodes is located,” the representative told the newspaper.  “We did have to remind the landlord of city ordinance that requires us to have 24/7 access to our infrastructure.”

Regardless of who wanted what, Time Warner Cable customers experiencing the effects of several outages in lower Manhattan this week are entitled to service credits.  Just visit Time Warner’s New York City website, complete the e-mail form listing the day(s) you experienced service outages, and request credit accordingly.  Make sure you remind them of the services you have so you are properly credited.

As we originally reported a few weeks ago, Time Warner Cable has launched a planned fall promotion offering new Wideband and SignatureHome customers a $300 rebate on a Slingbox PRO-HD purchased at a participating local Best Buy store or through the retailer’s website until November 30, 2011.

The high-end Slingbox allows customers to stream live cable programming and other video across their home broadband connection to computers, smartphones, or tablets (the latter two require a separate purchase of a $30 iPhone/iPad or Android app).

The offer is good only for Time Warner Cable customers serviced by the company’s New York City division who install new Wideband (50/5Mbps) standalone broadband service for $99 a month or who sign up for the company’s SignatureHome tier ($199/month), which includes Wideband service.  Existing Wideband or SignatureHome customers are not eligible, but current Time Warner customers who upgrade to either service are.

Time Warner Cable has configured the rebate offer to make sure customers pay on time and stay put for at least six months after signing up.  The rebate will appear as a $50 service credit for six months after being successfully processed.  If you pay your bill late or cancel service within six months, subsequent rebate service credits will be cancelled.

If you take advantage of this promotion, we strongly suggest you sign up for automatic payments to avoid a missed payment, which could cost you up to $300 — the value of the rebate — plus any associated late fees.  Remember, you also have to receive service from Time Warner’s NYC operation and the Slingbox must be purchased from Best Buy to qualify for the rebate.

Time Warner’s rebate website accepts online rebate submissions, so you can scan and keep your original receipts.  Since the cable operator will accept rebate submissions until February 15, 2012, there is plenty of time to refile if your original rebate request is lost.

[flv width=”640″ height=”331″]http://www.phillipdampier.com/video/SignatureHome Ad 9-2011.flv[/flv]

Time Warner Cable unveiled new advertising for its super-premium SignatureHome service last month.  The “concierge” service will bring your monthly cable bill to $199.  The concept of the $200 cable bill was unheard-0f just ten years ago.  (1 minute)

Time Warner Cable plans to expand its budget-priced TV Essentials package market-tested in New York City and northeastern Ohio across the east coast over the next several weeks in an effort to reduce video package cord-cutting.

Rob Marcus, president and chief operating officer at Time Warner Cable made the announcement Wednesday at a Goldman Sachs-sponsored investor conference.

The package delivers a largely sports-free experience, deleting expensive ESPN and other sports-specific networks from the lineup.  News channels are limited to networks from CNN, and while HGTV is included, Food Network is not (although you can watch the Cooking Channel to get by).

With Time Warner Cable customers now paying an average of $73.50 a month for television service, a package priced between $30-40 may help keep income-challenged consumers from canceling service.  But it is unlikely to reduce cord-cutting among those switching to online viewing.  Time Warner Cable does not heavily promote the package, instead pitching it on a targeted basis, especially to those who call to disconnect service.

Every little bit helps, says Marcus.

“We’ve been challenging ourselves to design an offering that might be more attractive and affordable to those customers who might not be able to handle the full packages,” Marcus said. “The numbers are still pretty small, but the results are sufficiently encouraging that we’re going to roll that out more broadly.”

In northeast Ohio, the TV Essentials package includes all local broadcast channels, public, educational, and government channels, and these cable networks: