TWC CEO Glenn Britt threatened to drop networks with low ratings when their programming contracts expire to combat rising pay-television costs. Distribution on Time Warner Cable “is not a birthright,” Britt said at a conference 12/3 in New York hosted by UBS AG.
Time Warner Cable’s programming costs since 2008 have increased about 30%, leading to a 15% increase in cable-TV prices, Bloomberg quoted Britt as saying. The trends are unsustainable as prices rise too quickly for many people to afford, he said.
“If you have a network that is getting hash-mark ratings and no real sign it’s going to get any better, we’re going to have a different kind of conversation that we might have had five, six or 10 years ago,” Britt added.
Dropping low-rated networks can be a tricky decision because their owners often bundle them with higher-rated channels, forcing MSOs to pay for all of them or lose access to networks they would otherwise want to keep.
RBR-TVBR observation: Cutting lower-rated channels and limiting choice is not going to do it. Some day, eventually, an MSO is going to do some serious testing of a la carte packaging—closer to real choice for the consumer. Not necessarily true a la carte per se, but to the degree that it can be worked to bundle some networks together from Time Warner, Discovery, Turner, Viacom, etc., to keep them happy at negotiation time. Limited a la carte will let the folks wanting sports or Spanish-language channels get them and the ones that want only drama and comedy channels get them too. The market (read: cord-cutters wanting online programming and broke consumers with high cable bills) is going to drive this, it’s only a matter of time. The package options, sans some of the discount options out there, right now are not offering enough a la carte choice for the mainstream cable viewer.