It’s time to take a look inside Time Warner Cable’s latest quarterly financial report and pick out some interesting developments that will impact customers during the first quarter of 2013.

Time Warner Cable managed 9 percent revenue growth in 2012, primarily from its broadband service, its strongest product. The company added another 500,000 broadband customers over the last year, primarily poached from telephone company DSL service. This growth in subscribers continues despite rate increases and the introduction of a $3.95 monthly modem rental fee introduced last fall.

CEO Glenn Britt noted that Time Warner Cable customers use and love their broadband service.

“The average customer used roughly 40% more capacity last year,” Britt noted.

But Time Warner Cable has plenty of capacity to handle that traffic growth.

Britt plans to leave as CEO of Time Warner Cable by the end of this year.

Irene Esteves, Time Warner’s chief financial officer noted Time Warner Cable continues to decrease its capital spending. Overall, Time Warner spent $3.1 billion on capital expenditures in 2012, or just 14.5% of its revenue. That represents a 40-basis point decrease from 2011. The bulk of that spending was on business services, primarily from the costs of wiring business office parks and buildings for cable. Less than 12% of Time Warner Cable’s spending targeted residential services.

“Overall, we expect capital intensity will continue to decline modestly, with full year capital spending around $3.2 billion in 2013,” Esteves told investors.

Time Warner’s new modem fee is earning the company a major boost in Average Revenue Per User (ARPU). The average Time Warner customer now spends $103.79 a month for service, an increase of 6.3%. Three-quarters of that increase is attributable to the modem fee alone.

Customers are clamoring for higher broadband speeds. At the end of 2012, Turbo, Extreme and Ultimate subscribers comprised over 23% of the company’s residential broadband customer base, up from 19% a year ago and 11% three years ago.

Britt, expected to retire by the end of this year, noted the company’s biggest challenge during his tenure continues to be programming costs. But the company is contributing to that problem itself, spending $110 million in 2012 on its new regional sports networks in southern California, which feature the Los Angeles Lakers and the Los Angeles Dodgers.

“Our programming costs per subscriber has grown 32% in the last four years,” Britt complained. “Over that same period, the Consumer Price Index has risen by 9%. So the math is pretty simple, programming costs have been rising at more than three times the rate of inflation. Our residential video ARPU increased 16% over that same period, so we’ve effectively raised pricing a little faster than inflation but only half as fast as programming costs have risen.”

The rising price of cable service has caused Time Warner to lose a larger number of customers, particularly when promotional pricing deals expire. The company has retrained its retention agents to avoid losing customers to the competition as new customer promotions expire. Time Warner noted some of its strongest competition is coming from AT&T U-verse promotional pricing for double-play offers in Texas and the midwest. In Kansas City, Time Warner continues to dismiss competition from Google Fiber as largely irrelevant, although the company has boosted its maximum broadband speeds to 100Mbps in that city.

Time Warner’s TV Everywhere app.

Other highlights:

♦ TWC completed its DOCSIS 3.0 broadband enhancement rollout in 2012 and began a process of reclaiming bandwidth previously dedicated to the delivery of analog video. These steps will allow the company to continue to devote more network resources to enhancing broadband service, including handling more traffic and selling faster service.

♦ Optional usage-based tiers are available from most Time Warner Cable regions. The offer of a $5 monthly discount for customers keeping their usage under 5GB each month has received almost no interest from subscribers. Sources inside Time Warner tell Stop the Cap! the company never expected much customer interest, but the offer allowed Time Warner to introduce the concept of usage-based pricing without alienating current customers.

♦ Time Warner Cable’s “TV Everywhere” platform continues to expand. Various TWC TV apps now offer as many as 300 streamed video channels on both smartphones and streaming set-top boxes. In December the company expanded its offering to include video on demand, and last week those on-demand programs became available on the desktop. Time Warner expects to grow its on-demand library and introduce local television channels to its streaming apps in 2013.

♦ Time Warner is trying to improve the standing of its residential telephone service with the introduction of a Global Penny plan, which offers international calling to over 40 countries for one cent per minute. This helps the company market its phone service to subscribers choosing its various ethnic and foreign language television packages.

♦ One-hour service windows are now available in most Time Warner Cable areas. In New York City, a 30-minute window is available for the first appointment of the day. The company is also expanding its self-install packages, letting customers do simple equipment installations themselves. The equipment is delivered free of charge by package delivery services and can be returned by mail as well.

♦ Although Time Warner is earning more from its broadband customers, the introduction of a modem rental fee did cause a significant number of customers to disconnect service, presumably in favor of a competitor. But the extra money in the cable company’s pockets more than makes up for the loss.

♦ Time Warner Cable’s forthcoming “hosted navigation product” represents a major change for the company’s set-top boxes. The “gateway” device will include 1TB of storage, can record up to six shows at once, and will automatically transcode video for an IP platform, letting customers view recorded and live programming on set-top boxes or wireless devices like smartphones and tablets inside the home. Expect to see the new device arrive in the second half of this year in many Time Warner cities.

{from Engadget)

Carefully laid plans for a surprise launch of the long-awaited next generation of the Slingbox were ruined when shelf stockers at Best Buy mistakenly put units out on store shelves two weeks before the official launch date.

The Slingbox 350 and 500 represent major updates in the Slingbox product line. The devices independently stream video, television, and cable programming to remote computers and wireless devices like smartphones without the kinds of copyright and location restrictions imposed on cable, satellite, and telco TV companies’ “TV Everywhere (Inside Your House)“-offerings. In short, if you can watch a channel at home, you can use the Slingbox to stream it anywhere.

Engadget reports the new models seem capable of offering 1080p streaming, assuming your wireless connection is capable of keeping up. The premium 500 model also adds built-in Wi-Fi, a major improvement over earlier Slingbox units that required either a wired Ethernet connection or a wireless bridge. But the 500 apparently deletes the built-in ATSC tuner, which seems to suggest Slingbox is targeting the device more for streaming personal media collections, not streaming broadcast TV. The 500’s inclusion of built-in USB media sharing and HDMI also seem to point in this direction. The 350, obviously a budget model, relies entirely on component and composite jacks.

The larger problem for Slingbox is coping with broadband and wireless usage caps, which could make streaming HD programming an allowance-eater. Slingbox has routinely dealt with Hollywood studios and other content owners objecting to the streaming of their television programming, but usage caps and overlimit fees could present an even bigger threat to their business model.

Slingbox’s Pro-HD and SlingCatcher models — the two most recent major releases — have been around since 2008. The company has since been largely focused on licensing its technology for inclusion in cable and satellite company set top boxes.

Best Buy realized its error when consumers attempted to buy the new units. They have since been pulled from shop shelving but will be back, slated to go on sale officially for an undisclosed price in the middle of October.

Time Warner Cable TV customers will soon be able to access on demand, full length episodes of popular TV shows aired on cable networks like Comedy Central, Nickelodeon and VH1 at no additional charge thanks to a new agreement signed with Viacom.

Currently Time Warner’s “authenticated” cable TV customers can live stream Viacom networks over the cable company’s TWC TV app, but soon will also be able to view on-demand content using a Time Warner user ID and password on Viacom websites.

Time Warner has been among the slowest cable operators to embrace the industry’s TV Everywhere project — allowing only paying cable television subscribers to access popular cable shows on the web. The new agreement will help Time Warner sell customers on keeping cable TV subscriptions to enjoy extra online features, while protecting the company from would-be cord cutters finding ways to watch favorite television shows for free online.

Maitreyi Krishnaswamy, Verizon’s head of FiOS TV admits she practically never watches live television — she records everything on her DVR first.

Krishnaswamy has been responsible for many of the interactive video services offered on Verizon’s FiOS TV platform, including on-screen apps, the media program guide, and how customers connect various devices to the FiOS television experience.

Now she’s directing Verizon’s consumer video services — deciding which channels make the lineup on FiOS TV and the networks available for streaming to mobile devices.

Krishnaswamy told the Tampa Tribune she recognizes the way Americans watch television has changed over the past few years, and she admits it has led to the “growing” trend of customers’ cord-cutting their cable TV subscriptions in favor of online viewing.

Krishnaswamy

“The question is: Is it growing enough for us? For us, it’s a matter of cord-cutters versus cord-shavers — people who switch to smaller tiers,” Krishnaswamy said. “Is the migration to a-la-carte enough that we can go that route? It has a way more important impact that just on them. It impacts how we negotiate TV contracts with studios. It’s not something we can do overnight, but definitely something we’ve been looking at.”

Verizon has made it clear it intends to compete for customers regardless of how they watch television, but Krishnaswamy signals the company is also considering protecting their core video business model, and would only say Verizon had no announcements to make “just as yet” regarding an Internet Overcharging scheme including usage caps and overlimit fees. Critics of data caps argue that limiting broadband usage prevents customers from taking their viewing experience online because it threatens consuming the majority of their monthly data use allowance.

But Verizon does not mind offering customers a TV Everywhere experience — streaming video content over its broadband network, so long as a customer also subscribes to its TV package. The company already offers live streaming television of many channels on its lineup and wants to bolster that with on demand content. Verizon also is experimenting with non-traditional set top boxes, and although Krishnaswamy had nothing to say about supporting the forthcoming Apple TV, she is actively working on improving how Verizon’s television service works away from the traditional company-provided set top box.

Some highlights:

• Verizon’s partnership with Redbox will let the company offer a new streaming and DVD rental service for customers, regardless of whether they live in a Verizon FiOS area or not. Customers will be able to access the service over mobile broadband, Wi-Fi, or any home broadband connection;
• Verizon will introduce an online viewing app for forthcoming versions of Amazon’s Kindle;
• The company has thus far only managed to secure streaming rights for in-home viewing and has run into difficulty getting content providers to let customers watch shows while on the go;
• Google Fiber is “interesting,” but Krishnaswamy doesn’t believe they are “a real operator” when only offering service in one city. She thinks the project is a good idea, however, because it forces competing providers “to increase your speed;”
• Verizon is considering simplifying its family of apps to reduce customer confusion. They currently have different apps for home security, home media, the remote control, and the program guide. Verizon wants its MyFiOS app to become a “super-app” that manages everything.

[flv width=”640″ height=”500″]http://www.phillipdampier.com/video/TVnext Interview – Maitreyi Krishnaswamy Verizon FIOS 1-28-11.m4v[/flv]

Back in 2011, Maitreyi Krishnaswamy explained her thinking about where Verizon FiOS was taking the TV experience. Many of these applications have since been released, but Verizon — like most providers — still runs into brick walls with content providers getting licensing to allow more flexible viewing of content.  (12 minutes)

YNN provides 24/7 local news coverage on individual channels in Buffalo, Rochester, Syracuse, and Albany.

Time Warner Cable has placed its owned and operated news channels – including YNN, NY1 News, NY1 Noticias, and News 14 Carolina – behind a TV Everywhere pay wall, requiring a video subscription with the cable operator to access anything beyond the latest news headlines:

The expanded video content includes a new web-only weather forecast, plus expanded long-form news interviews and extended on-location footage. In the future, Time Warner Cable TV subscribers will also be able to comment on our articles and receive e-mail alerts for top news stories.

In order to access our full, enhanced site, Time Warner Cable customers must sign in to YNN.com using their Time Warner Cable username and password – the same ID used to access TWC’s online bill pay service, stream TV shows from WatchESPN and HBO GO, access the TWC TV mobile apps, and use Remote DVR manager, Phone Manager and other TWC services.

This ID is free of charge to all TWC TV subscribers, and there is no additional charge for the enhanced website content. However, TWC subscribers with only high-speed data or phone service will need to upgrade to a video subscription to be able to fully access the upgraded site.

Customers can find their current account number on their latest Time Warner Cable paper or online bill. Viewing first requires an online account (available on TWC’s Registration Page by entering your e-mail address and following the registration instructions.)

YNN and other Time Warner Cable news sites used to offer video content for all site visitors. The change is part of Time Warner’s TV Everywhere project, designed to enhance the value of cable television subscriptions by offering accompanying enhanced web content — streamed video, live access, and on-demand video — over the company’s broadband service.