By Tim Wright

Time Warner Cable, Inc.

1 Time Warner Center
New York, NY 10019-8016
212-484-8000

About the Company

Time Warner Cable, Inc. is a media company providing cable, phone, and Internet services to 29 states and over 15 million customers.  These services are provided in different packages with arrangements of the cable, phone, and Internet services in different price tiers.  Time Warner Cable, Inc. provides its services to both homes and institutions [1].

Cable
Time Warner Cable, Inc. distributes a number of television plans and packages, spanning from basic with 20 channels to digital with over 200 channels.  Certain packages offer Digital Video Recording services and pay subscription services such as HBO.  Pricing varies for the packages depending on the number of channels and services [2].

Internet
Time Warner Cable, Inc. offers Internet services that span from 2Mbps to 50Mbps, allowing a range of basic Internet usage to plans that can accommodate large homes with multiple Internet-ready devices [3].

Phone
Time Warner Cable, Inc. offers a number of voice packages.  An unlimited domestic plan is offered for a monthly rate, as well as basic and premium international plans [4].

Key Executives [5]

Glenn A. Britt
Chairman & CEO

Robert D. Marcus
President & COO

Arthur T. Minson, Jr.
Executive VP & CFO

Competitors

Time Warner Cable, Inc.’s primary competitors in the cable industry are AT&T, Inc., Comcast Corporation, and Dish Network Corporation.  Competition became a serious issue for Time Warner Cable after it lost over 300,000 subscribers during the month long CBS blackout [6].

Ownership History

The 1968 founding of the American Television and Communications (ATC) set the foregrounds for Time Warner Cable, Inc.  In 1989, Time Inc. and Warner Cable merged to become Time Warner, Inc.  In 1992, a merger between ATC and Warner Cable was announced, creating Time Warner Cable.  In 2009, Time Warner Cable and Time Warner, Inc. separated.  NewWave Communications and Insight Communications were acquired by Time Warner Cable, Inc. in 2011 and 2012, respectively [7].

Financials

2013 has been a successful year for Time Warner Cable.  Stock prices fell in February and March, going as low as $84.75 but have remained steadily above $100.00 since the end of July.  A noticeable valley in stock prices occurred between August and September, when Time Warner Cable had its conflict with CBS, prompting a large loss in subscribers.  Stock prices saw an increase in early October and have remained consistent throughout November, showing a rebound from the discrepancy [8].

Quarterly data has ranged from $5.5 Billion to $5.6 Billion in 2013, and current stocks suggest this trend will continue in the fourth quarter.  This forecast means a total revenue of roughly $22 Billion in 2013, showing on par results with the 2012 revenue of $21.3 Billion and surpassing the 2011 revenue of $19.7 Billion, marking a successful year for Time Warner Cable [9].  However, due to the CBS conflict, Time Warner Cable is now expecting only a 3-3.5% increase in revenue for 2013 as opposed to the initially projected 4-5% [10].

In The News

• The CBS and Time Warner Discrepancy

The retransmission agreement between CBS and Time Warner Cable, Inc. ended in June of 2013, and the failure to reach a new agreement after numerous deadline delays resulted in the station being blacked out in eight markets across the United States on August 2nd [11].  CBS was seeking more compensation from Time Warner Cable due to the high ratings of its programming.  An agreement was reached and CBS was reinstated in the markets on September 2nd, 2013.  The beginning of the regular NFL season caused urgency in reaching an agreement, as both sides wanted to reap advertising benefits [11].  Over the course of the blackout, Time Warner Cable lost over 300,000 subscribers, and also had to compensate pay-subscribers for different CBS owned stations, including Showtime [10].

• Increasing Internet Speeds

Following the problematic CBS blackout, customers in the New York, Los Angeles, and Hawaii markets will have their Internet speeds increased. Those with the Ultimate Internet package will have speed doubled from 50 to 100Mbps through the rest of the year, while other markets will receive the increased speed throughout 2014.  The baseline Internet offering will also be doubled in speed, while maintaining its $14.99 price.  Customers with the existing baseline Internet package will receive the speed increases throughout 2014.  Time Warner Cable hopes to appease its remaining customers and bring back customers who cancelled their subscriptions with these speed increases [12].

• IntelligentHome Service Expands

Time Warner Cable’s 2011 project, IntelligentHome, finalized its national implementation in November.  The service allows for electronic control of several aspects of the home, including lights, temperature, and security.  A central, outlet connected device acts as the main control and mobile applications can be used to access IntelligentHome, allowing control from outside of the home.  The $99.99 installation and monthly fees below $40 are looking to revolutionize home security and efficiency.  Time Warner Cable entering into the emerging home automation market and creating all encompassing deals with Internet and cable can result in a brand makeover [13].

•  Al Jazeera Distribution

News source Al Jazeera America announced a distribution deal with Time Warner Cable in late October.  The channel initially launched in New York City and Los Angeles, as these are seen as key markets.  Al Jazeera America will be fully implemented in all of Time Warner Cable’s Markets by March of 2014.  Time Warner Cable viewed adding Al Jazeera America as an opportunity to replace Current TV, which was pulling in lackluster ratings.  The channel is currently attracting fewer than 25,000 viewers at any given time, but Time Warner Cable and Al Jazeera America are hopeful that it will follow a similar ratings trajectory of other news stations such as Fox News and MSNBC [14].

• Samsung Galaxy Tablet Partnership

With the 2013 holiday season approaching, Time Warner Cable has entered into a partnership with Samsung, offering new and old customers an opportunity to get a Samsung Galaxy Tablet.  By selecting or upgrading to particular cable and Internet packages, customers will receive a complementary tablet.  Samsung and Time Warner Cable are seeking a mutually beneficial relationship; Time Warner Cable is hoping to get more customers and upgrades by attaching the desired tablet to its packages, while Samsung is looking to be competitive with Apple in the tablet market.  Time Warner Cable is also looking to promote the idea of watching television on a tablet, whether inside or outside of the home through these packages, so tablets will come with the Time Warner Cable application already installed [15].

• Streaming Deal With Discovery

Time Warner Cable made an agreement with Discovery Communications that involves streaming the content of its numerous channels across new platforms including smartphones and tablets.  This may be implemented through Time Warner Cable’s official mobile application, or Discovery may potentially be launching its own applications.  Comcast entered a similar agreement with Discovery Communications, but solely with Discovery Channel, opening an opportunity for Time Warner Cable to gain a wider market than one of its major competitors.  The recent announcement from Nielsen that portable views will start to be accounted for in ratings was an extra incentive for both parties [16].

Sources

1.  Time Warner Cable: About Time Warner Cable

2.  Time Warner Cable: Digital Cable

3.  Time Warner Cable: Internet

4.  Time Warner Cable: Phone

5.  Time Warner Cable: Executives

6.  Hoovers: Competition

7.  Time Warner Cable: Ownership History

8.  Yahoo Finance: Stocks

9.  Yahoo Finance: Income Statement

10.  Reuters: Subscription Loss & Income Forecast

11.  USA Today: CBS Blackout Ends

12.  Uber Gizmo: Increasing Internet Speeds

13.  PC Mag: IntelligentHome Implementation

14.  NY Times: Al Jazeera Distribution

15.  Next iPhone News: Samsung Galaxy Deal

16.  Wall Street Journal: Discovery Distribution Deal

Image Sources

17.  Lazy Tech Guys – Time Warner Cable

18.  Time Warner Cable – Glenn A. Britt

19.  Time Warner Cable – Robert D. Marcus

20.  Time Warner Cable – Arthur T. Minson, Jr.

21.  CNN Money – Time Warner Ad

22.  Hot Hardware – Time Warner Cable Router

23.  Time Warner Cable – IntelligentHome Display

24.  American Thinker – Al Jazeera Logo

25.  Multi Channel – Time Warner Cable and Samsung Galaxy Deal

26.  Hollywood Reporter – Discover Channel Logo