Even after reporting an increase in high-speed data customers alongside a decrease in video subscribers, Time Warner still doesn't think that the Internet is replacing the traditional pay TV model. Along with its Q1 earnings report, the cable company said its high-speed data customers increased by 130,000, while it lost 129,000 more residential video subscribers. "Time Warner Cable said today that web-based video still isn't having a huge impact on its video subscribers, saying those services are 'not a substitute at this point,'" reported AdAge. But, the numbers don't exactly tell the same story.
Time Warner cites very legitimate explanations for its lagging cable subscriptions, but neglects to mention the numbers in the context of rising Internet and streaming numbers. The company believes it's losing TV watchers to competition, like Dish and FiOs, and fewer new home starts. Fewer new home starts may have to do with fewer new homes in general. (Hey, recession.) But, at least some of those losses come from people like this blogger, who upon moving, saw Internet, sans pay-TV, as a better option. These people fall into what AdAge called the (scary for Time Warner) Cable Nevers.
They are graduating college, leaving the nest and have become comfortable finding their viewing choices online. They don't recognize networks - they know "shows." They like on-demand viewing. They like skipping commercials, too!
As for competition, it's not the individual companies on the Internet presenting the scariest threat to Time Warner -- Netflix celebrated 600,000 subscribers yesterday, compared to Time Warner's 11.9 million -- it's their aggregate. None of the streaming services offer everything one can find on cable, mostly because cable companies and networks aren't letting that happen, as we've noted before. But, the Web as a whole has a lot, which isn't such a horrible thing for companies like Time Warner, as they still dole out the broadband that powers those Netflix binges. And people do seriously binge on Netflix.
Even as the company got defensive about the Internet, its executives must know a TV-less future may be coming for them. "At this point for Time Warner Cable, broadband is the main story, and video is secondary," Paul Sweeney, an analyst at Bloomberg Industries told AdAge. We still think plenty of obstacles stand in the way of a TV revolution, but Time Warner's in denial of the changing landscape.
This article is from the archive of our partner The Wire.