Spotted: Dow Jones news services picked up on an interesting sentence muttered by Time Warner Cable’s chief operating officer Landel Hobbes during an investor conference on Monday: Broadband Internet has replaced cable TV as the company’s “anchor product” so if TV service continues to slow, Time Warner can just raise Internet prices.
Reporter Nat Worden writes just a few paragraphs, enough to give us a glimpse into the future of cable bills.
“Consumers like it so much that we have the ability to increase pricing around high-speed data,” Hobbes said.
** Webcast: Listen to what Hobbes said **
While that’s discouraging news for anyone on a budget, it makes financial sense for Time Warner especially as more consumers cut cable and instead watch TV shows online for free. But this still means you need a fast Internet connection.
I listened to what Hobbes said and he went on to talk about what customers can expect from Time Warner this year: Access to TV shows online via “TV Everywhere,” and the long-rumored multi-room DVRs and features like “Start Over” and “Look Back” to allow viewers to watch TV shows they missed or forgot to record.
Hobbes also said DOCSIS 3.0, which offers faster Internet speeds of 50 down and 5 up, will be coming to more cities this year, possibly targeting markets where Verizon FiOS also offers fast service. Time Warner launched its faster Internet for around $99 in New York City, where it goes head to head with FiOS and is rumored to be targeting Texas, Ohio and upstate New York next.
That gives us hope here in Orange County for those wanting faster service and are willing to pay for it but can’t order FiOS. Faster Internet is apparently what the bulk of new Time Warner customers want. During the investor conference, Hobbes said that 70 percent of new customers opt for Turbo Internet speeds, currently at 15 mbps downstream and 2 mbps up. Comparably, FiOS offers up to 50 mbps down and 35 mbps up.
Speaking of FiOS, Time Warner considers it to be its chief rival. While AT&T U-verse does offer TV service and Internet, Hobbes remarked that U-verse service is, well, “I’d say not as good as mine.”
Time Warner is also getting ready for another big push in Verizon FiOS territory. Customers who ditched cable for FiOS are now getting to the end of 1-to-2-year contracts with Verizon, which launched FiOS in Orange County in 2007. Hobbes believes Time Warner has a good chance at winning them back.
“Typically when we lost customers to FiOS the first time … it’s because we’ve done something from a customer service perspective that made them upset, not happy with us and that’s why they leave,” he said. “From our research, we’re seeing that if there’s any part of the product set that they (Verizon) are struggling with it’s scaling the care model. That’s the reason why we think we’re going to be successful in the winback situation… We’ve got databases to track those customers. We’ve really been focusing on our care model and improving it.”
Further down the road, Time Warner plans to expand its wireless data access so broadband customers can access mobile RoadRunner Internet service on the road. The company launched the service in North Carolina and Dallas in December and is now in 8 cities, he said.
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