TWX: Why ‘Cord Nevers’ Will Return


Time Warner CableTime Warner is positioning itself to thrive in a skinner bundle world. So said CEO John Turner at a recent investor conference. {lock}

The company is well-positioned for a world with smaller packages of better networks. He noted that modest cord cutting and “cord nevers” are the result of large cable bundles that priced out some households, but believes they’ll come back if they see more value.

This is where skinnier bundles come in, and TWX is having conversations with numerous companies about their inclusion, according to Wells Fargo analyst Marci Ryvicker.

“TWX is highly concentrated around a few networks–and the development of new aggregators entering the marketplace over the next 24 months is a positive for the industry as they come in paying higher fees,” she writes in a client report. Domestic affiliate revenue is still expected to see low-teens growth this year and similar rate next year. Several companies are experimenting with lighter ad loads and Turner hopes to do that too, but not take a revenue hit. “Management is considering the entire consumer experience, while also working with talent to innovate and produce strong long form ads — and the response has been ‘fantastic,’ especially at the upfronts.”

Martin believes there will be more innovation in the next 5 years than the prior 30, according to the analyst.