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Time Warner loses 84,000 customers, makes less money
November 5th, 2009, 7:53 am · 55 Comments · posted by Tamara Chuang, a.k.a. The Gadgetress
It was another rough quarter for Time Warner Cable, which lost TV customers, posted lower profits and saw a drop in premium channel subscriptions. It lost 84,000 video customers by the end of the third quarter, ended Sept. 30, compared with the second quarter.
But in almost all other areas, the cable TV provider grew: It added more Internet and phone customers, more digital cable customers and more multi-package customers. That helped offset the exodus of video subscribers to a loss of 25,000 customers. Overall sales were up 4 percent, to $4.5 billion, compared with $4.3 billion last year.
The company has been losing video customers as new TV services like Verizon FiOS and AT&T U-verse enter the market and customers head for the Web to view TV shows on their own time.
2Q 2008 3Q 2008 4Q 2008 1Q 2009 2Q 2009 3Q 2009 TW video
subscribers13,297k 13,266k 13,069k 13,105k 13,048k 12,964k Change -31,000 -197,000 36,000 -57,000 -84,000
While the number of customers fell less than 1 percent, to 14.652 million subscribers, Time Warner got a bit more money from each one. Subscription revenues grew 5 percent, to $4.3 billion, thanks to more digital video, Internet and phone customers. Separating out video alone, Time Warner made 2 percent more off TV subscribers, coming in at $2.698 billion in the third quarter, compared with $2.639 billion a year earlier.
Still, Time Warner made less money than it did a year ago. Net income fell 11 percent, to $258 million, compared with $301 million a year earlier. Part of that was because it had to pay more for the TV channels it offers customers. The cost of video programming grew 6 percent, to $1 billion. In the first 9 months this year, Time Warner spent a whopping $3 billion in programming fees, up 7 percent from last year (see its quarterly filing, page 8).
Meanwhile, more customers dropped basic video and premium channel subscriptions.
In the chart below, Time Warner notes that about 13 million pay for plain-ol’ cable TV service. About two-thirds also pay for digital cable and high-speed Internet.
| Time Warner subscribers (in thousands) |
30-Jun-09 | Net change | 9/30/2009 |
|---|---|---|---|
| Video subscribers | 13,048 | -84 | 12,964 |
| Residential high-speed data subscribers | 8,757 | 117 | 8,874 |
| Commercial high-speed data subscribers | 289 | 4 | 293 |
| Residential Digital Phone subscribers | 4,016 | 62 | 4,078 |
| Commercial Digital Phone subscribers | 48 | 10 | 58 |
| Primary service units | 26,158 | 109 | 26,267 |
| Digital video subscribers | 8,802 | 8 | 8,810 |
| Revenue generating units | 34,960 | 117 | 35,077 |
| Single play subscribers | 6,483 | -113 | 6,370 |
| Double play subscribers | 4,834 | 39 | 4,873 |
| Triple play subscribers | 3,335 | 49 | 3,384 |
| Customer relationships | 14,652 | -25 | 14,627 |
The company was hit hard in other profit-making areas. Advertising revenues declined to $182 million, a 19 percent drop, attributed to fewer auto, media and political commercials.
Glenn Britt, the cable provider’s chief executive officer, remained upbeat and said in a statement: “Our business model is resilient even in a tough economy and in the face of intense competition. We’ve built great assets in our plant and customer relationships that provide a strong foundation for continuing growth.”
Recent Time Warner news:
For more on Time Warner, check The Gadgetress special page: gadgetress.freedomblogging.com/twc
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I have been with them for about 14 months. Internet hasn’t gone down the whole time i’ve had it and it’s very fast. Twice as fast as my old att dsl line. TV service has been good too. No outages that I can remember. Plus they more than doubled the HD channels over the last year. Their phone service is too expensive so I had to cancel it though.
I agree with this artilce completely. Their cable service and quality is sub-par. Their customer service is also equally bad. I am not trying to fuel the fire but damn. I had to switch to them becuase my association does not allow satellite dishes, I know I was getting more with Dish Network, and the picture quality was crystal!!! Oh, did I mention that the roadrunner service has never been slower. I cannot wait for January when I get my annual increase….
Time Warner Sucks.
They have lousy products and services and customer satisfaction is incredibly low. This should not come as a surprise to anyone.
This is the power of free market. Businesses compete for customers. When they don’t do a good job, they lose money and (hopefully) exit the market, leaving only good businesses behind.
Glad to hear it. They were overpriced, and their customer service was terrible. When I canceled my service, the lady had the nerve to say “well good luck with U-Verse, I’m sure I’ll see you back with us.” Now Time Warner is eating those words. I’ve never been happier than being with AT&T U-Verse!
I had TW and when AT&T U-Verse came into my neighborhood, I could not switch fast enough. I now enjoy fantastic HD quality, better overall picture quality, a great DVR, and I have not had the problems I did with TW. Good riddance to TW!
Tim Warner really is TERRIBLE! About a month ago, I came home to my cable and internet not working. When I called them they said I called them and cancelled because I was moving out of state. Funny thing is they didn’t believe me, that I didn’t call them! However could not explain why it was that if I called to cancel- why did i still have my cable box and router? They did admit that they ask no security questions to make sure they are accessing the correct account when you call into their service center. To top it off I used to have a great deal- which they claimed I couldn’t get anymore because it wasn’t available in their system anymore. Sounds like a scam to me.
Great job time warner- glad the numbers show how bad you guys are doing as well!
Time Warner needs to give us ESPN 360!
Note to Totally Worthless Crap
1) If your going to charge me $65 a month, Give me ala cart!
2) Cut the bloated wages of your CEO and his overpaid cronies!
Dealt with them once when trying to reconcile a final bill for my deceased mother. I felt like I was calling a mental hospital in which the patients had taken over. Strange place, I’m gald they are not my provider.
Not sure why you guys give the bloggers on OCR a hard time, they are the only ones that keep me coming back to this website.
Only 84,000 I am in shock it should have been 184,000 in Anaheim alone.
good news
I can’t even BEGIN to tell you the nightmare that is TIME WARNER.
This company has NO business being IN business.
If Time Warner sails off the end of the earth I sure hope it has Cox Cable in tow!
I canceled all the movie channels because the movies were always the same month after month. My internet isn’t faster either.
Most of these companies are trying to more with less, the only thing they understand is numbers, when the numbers drop they will react (like the music companies, too late)
I have my pc hooked up to the tv and I stream netflix, and hulu and now almost all cbs programming without using cable tv!
I only use one remote control and dont need the mouse or keyboard.
It’s call media center and it’s made by microsoft and built in to most vsersions of Vista and Windows 7. try it, it will save you money!
Brian, don’t forget TVShack. net too.