UBS Media Conference: TWC’s Britt Says Carriage Battles Bad for Consumers
Time Warner Cable chief Glenn Britt envisions future where cable subscription gets you “the four ‘anys,’” says broadband becoming “most important thing we sell to people”
By Joel Topcik -- Broadcasting & Cable, 12/8/2009 1:25:50 PMUBS Media Conference: Complete Coverage
Time Warner Cable CEO Glenn Britt waded into the perennial skirmishes between cable operators and programmers over carriage negotiations, saying that both parties need to be more mindful of consumers when wrestling over the rising cost of content.
Speaking Dec. 8 at the UBS Global Media and Communications Conference, Britt noted that programmers and carriers have a "symbiotic relationship" and lamented that "people in symbiotic relationships don't get along very well.
He said Time Warner Cable's "Get Tough or Rollover" campaign, in which the company invited consumers to weigh in online on how it should deal with programmers' cost increases, had received some 380,000 visits as of the previous evening and that 95% came down on the "get tough" side.
Britt said that the campaign was meant to educate consumers about where the cost increases were coming from. "The one good part of the content business has been the cable networks," thanks to the subscription-advertising dual-revenue model, he said, adding that "other sectors are trying to compensate by raising the price of content."
He said the company has "heard from some of the content companies" regarding the campaign. "They're wondering what exactly that's all about," he said. "Let's leave it at that."
Britt noted that the response, particularly in comments that showed consumers want to buy smaller packages of cable programming, demonstrated the soundness of cable's subscription model and its packaging of networks-factors that he believes underscore the demand for a TV Everywhere authentication play.
"Consumers like to buy these products in subscription form and they do like to buy packages," said Britt, adding that he envisioned a world in which a subscription would offer consumers what he called "the four â€˜anys'": access to any content on any device, anytime and anyplace.
In that world, he said, "our role is kind of the plumbers...to do the plumbing and make it really easy for you as a consumer."
Speaking a day after Time Warner Cable reached an extension of its retransmission consent agreement with Sinclair Broadcast Group, Britt touched on the issue of retrans negotiations in general comments about the struggling broadcast model. Referring to NBC Universal chief Jeff Zucker's remarks at the confab the previous day, he said the relative strength of the cable model left broadcast networks stuck in a business plagued by "all sorts of anachronisms," including the exclusivity of network-affiliate relationships.
"I don't know where the broadcast networks are going to go," Britt said, noting that some 90% of viewers receive TV through a pay service. "There's still some sense that there's something called â€˜free TV' out there; well, it's not free for the majority."
Addressing the fourth-quarter outlook for Time Warner Cable amid the protracted recession, Britt said there were "glimmers of light" in ad revenue and broadband sales, "but we're not out of the woods yet."
Responding to the growing clamor for interactive advertising, he assured the audience the company was working on it with the Canoe Ventures consortium. "For people who want instant gratification, I know it seems like it's taking a long time," he said. "But over the next year or so, you're going to see some things happening in that space."
On the subject of broadband, Britt said, "if it's not already, it's on its way to become the most important thing we sell to people-increasingly more than television." That demand promised opportunity for growth and "the ability to charge more over time." But it also promised increasing traffic congestion and the need to confront it as an industry.
"Either we're going to put up with the congestion as a society or we're going to allow some form of network management, which the FCC is starting to tackle, or we're going to charge more for using more," said Britt, adding that he favored some form of the latter.
He touched on the current debate over spectrum allocation and praised the FCC for its focus on "getting all the facts and approaching this in a thoughtful and balanced way."
Asked his thoughts on what the Comcast-NBC Universal deal says about the value of content-distribution synergies, Britt said that such synergies never delivered much value for Time Warner before it spun off its cable division.
"Brian Roberts doesn't seem to be talking about synergies, just that it a good investment," he said. "Time will tell....but it's not being done for all sorts of wonderful synergies."
The bottom line is this,pay T.V. is not a necessity. Most of us pay and watch because we are simply used to it. If pricing becomes too big a burden I wont have trouble choosing which is more important. Go ahead and fight it out between your selves, but remember you are all dependant on one another. What would I do without T.V.? Read the paper, listen to the radio, talk to my neighbors, catch up on a good book, rent a dvd. I am not dependant on T.V.alone for information, and most of the programming is crap anyway. My Daughter has no service, by choice, and her children are far better off for it. Most Americans live on an income that would make the big excutives cringe with pain, and in the end the decision of whether we want to give up a good chunk of our heard erned money just to sit and stare at T.V. is a question we may ask ourselves in the near future.
Paula Yutzey - 12/30/2009 4:23:41 AM EST
I am fed up with the demands by broadcast and cable TV networks that cable providers increase rates each year. I voted at www.RollOverorGettough.com for TW to get tough. I agree that TW should get tough with itself also and not charge for analog and digital TV access to their customers. Also, I have had it with the price increases and am looking for a way out. I have an Apple TV and have used the iTunes Store in the past for mostly TV Shows in SD -- recently, have begun acquiring HD content via iTunes though. I buy/rent DVDs and/or get content via iTunes as much as possible. I know a major problem with getting video online is cable companies are also major ISPs and without Net Neutrality which they want done away with they can discriminate against competing online video on demand systems that are more affordable.
I like the idea of iTunes subscription TV service currently in the works and would love a cheap, affordable,a la carte subscription TV service like that pitched by Apple for iTunes where we pay $30 a month for whatever programming we want access to over the current digital cable TV business model that provides more channels than we need and overcharges us for them.
Maneesh Pangasa - 12/28/2009 5:06:21 PM EST
I agree on being able to pay for the channels I want. In Tampa basic cable is 100 channels and we only watch about 15 of them. The others I surf over or delete. I pay $59.00 a month for TWC crap. Dish Network has a great deal right now. Am going to look into it and also FIOS. As far as I'm concerned TWC can go where the sun doesn't shine. Raymond POwell
Raymond POwell - 12/27/2009 5:19:11 PM EST
Would like to review the data that lead Mr. Britt to the conclusion that consumers want to buy packages - cannot imagine the gynastics necessary to come to that conclusion. A challenge Mr. Britt: how about converting one of your large systems to a pure ala carte model? We would all find out very quickly which services provide value, and to whom. This is usually the point where the cable MSOs have to stop bragging about their awesome technological prowess, and start talking about the insurmountable technical challenges of the ala carte model. We should also remember that the cable MSOs are the tip of the sword protecting our artistic and intellectual freedom by exposing us to alternative points of view - pay no mind to the fact that they have ownership interests in most of the nonsense channels.
John C. Elliott - 12/27/2009 3:04:00 PM EST
It would be nice if one day soon Time Warner would stop making their consumers that are paying for digital service also pay for the basic and standard analog services when it's simply and unnecessary cost and a redundancy. That would be one way from Time Warner to cut costs to the consumer since they seem to have started this Roll Over or Get Tough campaign, I think they should look in their OWN back yard and start by saving everyone about $45-$50 a month for all the analog stuff that is broadcast up on digital at the same time. Why do we need to pay for redundancy like this? Time Warner?
Further, if Time Warner is again concerned with holding costs down, why don't they give their customers what we have been asking for for years and years in the form of "ala carte" programming so we can pick the channels that we want to to pay for and leave out all the other channels we have no interest in. I know Time Warner says that would kill their revenue, but is Time Warner putting on this Get tough campaign to benefit themselves or their customers? And if the answer is their customers, then I say take it a step further and add ala carte programming and the elimination of the need for basic and standard cable in order for us to have access to digital programming. Stop jamming us up with all these unnecessary packages and fees TW! I think it's high time you got tough on YOURSELF TW.
David Stanwix - 12/27/2009 11:52:21 AM EST
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