Time Warner Cable

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TIME WARNER CABLE

by: Eric Zidar

 

Headquarters

Time Warner Cable Inc.

60 Colombus Circle

New York, NY 10023

Phone: (212) 364-8200

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About

Time Warner Cable is an independent cable and satellite distribution company operating in The United States. With 15.2 million customer relationships, Time Warner Cable operates primarily as a triple play distributor with 10.8 million residential video subscribers, 11.7 residential high speed data subscribers, and 5.3 million residential voice subscribers. Time Warner Media, the advertising arm of TWC, offers advertising solutions to national, regional, and local businesses. Another arm of the company is Time Warner Cable Business Class, which offers data, video, and voice services to all types of businesses, In March 2009, Time Warner Cable spun out from its parent company, Time Warner Inc., in order to become an independent company. Time Warner Cable is now a publicly traded company under the title NYSE: TWA. (3) Time Warner Cable is currently the second largest cable provider in the U.S. In February of 2014, TWC announced a plan to merge with Comcast, the leading cable provider in the nation. (4)

Corporate Structure (5)

Robert D. Marcus - Chairman and Chief Executive Officer

Robert D. Marcus – Chairman and Chief Executive Officer

Dinesh C. Jain - Chief Operating Officer

Dinesh C. Jain – Chief Operating Officer

Arthur T. Minson, Jr. - Executive Vice President and Chief Financial Officer

Arthur T. Minson, Jr. – Executive Vice President and Chief Financial Officer

 

History

In 1973, American Television and Communications was purchased by Time Inc. during the building stages of Warner Communication’s Warner Cable. After the two companies joined forces with a landmark merger in 1989, it only took 3 years for the new company, Time Warner Inc., to conjoin its two television subsidiaries and form Time Warner Cable. In 1996, TWC took its first steps into the world of internet with the first cable-delivered high speed internet service, Roadrunner. Soon after, TWC introduced digital cable, VOD, and a digital phone service that formed one of the first “triple play” services. In 2007, TWC became a publicly traded company, and broke off from Time Warner Inc. in 2009 to become an independent company. While serving as one of the top providers in the industry, TWC continued to grow in size with acquisitions of Adelphia, NewWave Communications/Navi Site, Insight Communications, and DukeNet Communications.  After industry legend Glenn Britt stepped down in 2013, Robert D. Marcus was elected the new chairman and CEO of TWC. (3)

Financials 

Time Warner Cable became a publicly traded company in 2007. Here are their revenues in thousands for the past three years (5):

  • 2012: $21,386,000
  • 2013: $22,120,000
  • 2014: $22,812,000

In 2013, Time Warner Cable had a decent year by generating a 3% increase in total revenue. This past year they did equally well by bumping up the total revenue by another 3%. TWC’s stock price has been doing well in 2015 so far increasing .07% from 144.28 per share on 1/12/15 to the current price of 158.20 per share on 4/16/15. The company is currently valued by Yahoo Finance at 68.2 billion dollars. (6)

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Acquisitions:

  • Adelphia (2006): TWC completed a joint purchase with Comcast for all of Adelphia’s assets, systems, and employees. The acquisition cost the two companies $12.5 billion in cash, and 16% of Time Warner Cable’s common equity. (7)
  • NewWave Communications (2011): Time Warner Cable acquired this midwestern small time cable provider and 80,000 of its subscribers for $260 million dollars in cash. (8)
  • Insight Communications (2011): This medium sized cable provider was also acquired in 2011 to further broaden Time Warner Cable’s presence in the Midwest. A price tag of $3 billion in cash was agreed upon with Carlyle Group in exchange for assets and 750,000 customers in Illinois, Indiana, Kentucky and Ohio. (9)
  • DukeNet Communications (2014): After many negotiations throughout 2013, Time Warner Cable completed the acquisition of DukeNet Communications for $600 million dollars from Duke Energy Corporation and investment funds managed by Alinda Capital Partners. This southeastern regional fiber optic network added an estimated 8,700 miles to TWC’s network. (10)

Time Warner Cable Media

Time Warner Cable Media (TWCM) is the advertising division of Time Warner Cable. They offer geographical marketing solutions and advertising networks for businesses of all sizes. This arm of TWC is fairly lucrative, generating $1.18 billion in revenue in 2013. (4) Due to Time Warner’s Cable’s reach in television, TWCM has advertising networks on virtually every channel offered on Time Warner Cable in 14 different states, including Texas, California, and New York. This arm of Time Warner Cable is expected to be expanded after the Comcast Merger.(11)

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Comcast Merger

In February of 2014, Comcast and Time Warner Cable announced a full merger of the two companies worth $45.2 billion. With Comcast leading the CATV and Broadband industry in marketshare and Time Warner standing in second, the merger would make the two own over 30% of the market share in both Pay TV and Broadband.(12)

This has raised the alarm for many competitors, customers, and politicians across the nation. The LA Times reported a story on a handful of consumers, advocacy groups and content creators protesting in downtown Los Angeles. Opponents of the merger argue that Comcast and TWC would have a monopoly over the Broadband and Cable industries and have the power to drive up prices in markets such as California where they would have a service footprint over 80% of the state. (13) Other major media companies like Netflix, Discovery Communications Inc., and Glenn Beck’s The Blaze have publicly opposed the merger due to fear that Comcast is growing to large. With it’s purchase of FreeWheel Media in April of 2014, many of these companies want a piece of their growing advanced advertising technology. Comcast has even gone as far as accusing companies in court such as Netflix of extorting their support in exchange for rights to yet-to-be launched TV networks, pay higher carriage fees for channels, allow interconnection of web traffic without charge, and to share access to advanced advertising technology.(14)

The merger was expected to be finalized in late 2014, but Time Warner Cable and Comcast continue to sort our legal issues with the FCC.

Company News 

In the midst of the merger, Time Warner Cable still stays competitive in the market. Recently, TWC announced that it would be raising internet speeds free of charge starting in Charlotte, NC. This is a response to the continuous growth of Google Fiber, Google’s new high-speed fiber internet service. With the money and power of Google, Time Warner Cable will be forced to lower prices and improve quality in order to stay competitive. (15)

Time Warner Cable also just announced the launch of it’s new Enhanced DVR system. This features the ability to record 6 shows simultaneously, and store 6x the amount of content. The new and improved storage of the Enhanced DVR has TWC customers very excited as it is a sizable improvement from the two-show at a time limit that is currently implemented on TWC DVR systems. The new product is low cost, only an additional $3 for single DVR customers, 7$ extra month for whole-house customers, and $10 a month for consumers who don’t have the DVR system. In addition, TWC now offers DVR control from a smart phone app for all DVR users. (16)

Sources

  1. “Time Warner Cable Credit Spreads Surge Amid Charter LBO Talks” Forbes.com – RT: 4/17/2015
  2. “Time Warner Cable Corporate Office” corporateofficehq.com – RT: 4/16/2015
  3. “Company Overview” timewarnercable.com – RT: 4/16/2015
  4. “Time Warner Cable”  trefis.com – RT: 4/17/2015
  5. “TWC Income Statement” yahoofinance.com – RT: 4/16/2015
  6. “Key Statistics” yahoofinance.com – RT: 4/16/20215
  7. “Comcast and TWC Complete Adelphia Communications Transactions” corporate.comcast.com – RT: 4/16/2015
  8. “Time Warner Cable Acquires NewWave Communications” stopthecap.com – RT: 4/16/2015
  9. “Time Warner Cable to Buy Insight for $3 Billion” reuters.com – RT: 4/16/2015
  10. “Time Warner Cable completes Acquisition of DukeNet Communications” timewarnercable.com – RT: 4/16/2015
  11. “Time Warner Cable Media” – timewarnercablemedia.com – RT 4/16/2015
  12. “TWC to Merge With Comcast to form World-Class Technology and Media Company” corporate.comcast.com – RT:4/16/2015
  13. “Groups Rally Against Comcast-Time Warner Cable Merger Ahead of PUC Merger” latimes.com – RT:4/16/2015
  14. “Comcast, TWC Blast Critics of Merger” wsj.com – RT: 4/16/2015
  15. “Time Warner Cable Boots Internet Speeds To Compete With Google Fiber” ign.com – RT: 4/16/2015
  16. “Time Warner Adds DVR That Can Record Multiple Shows At Once” buffalonews.com – RT: 4/17/2015