Last week’s announcement from Time Warner said that it had the largest loss of subscribers (users of Time Warner CableTV) in history in the last quarter, which is not surprising at all. What is surprising is what the company’s blaming the loss on and thus deceiving the investor community. In playing the blame-game, Time Warner went out of its way to blame the “spat” with CBS for its loss of 300,000 or so monthly subscribers. Ha, good luck with that.
The capital-T truth, as we in AV all know, is the trend towards a la carte TV. Teens already do it in alarming numbers, 20-somethings are doing it and now the trend is hitting 30 and 40 year olds too. It seems to be dawning on everyone that, “Hey, I am only watching Homeland, Modern Family, ESPN and The Walking Dead regularly, so why should I pay $70, $80 and $100 per month?” And, answer is, you shouldn’t.
Time Warner is the biggest barrier to that. Let’s be real here, what is Time Warner CableTV anyway? Not a show producer, not a studio, not creative content licensee — no. Heck, all they are is a wire. A middle-man — a distributor of content. And, unlike what we know as a distributor in AV that adds value like education on product and technology or assistance with systems design or application support, all Time Warner does is show up and install access to CableTV and leave — and they barely do that well. My last experience with them was adding basic cable to a new house and it took them three, yes three, no-show appointments (by the way, thanks for the almost-nothing $20 credit in exchange, Time Warner), they finally got it right on the fourth try when the guy showed up only 20 minutes late. It was all played out publicly on Twitter (at least publicly via my personal Twitter account — to dozens of re-tweets) and Time Warner, laughingly, sent me a canned twitter response to call their customer service line — which I was already on the phone with for the third time that day.
So, Time Warner, with that kind of customer dis-service, who needs bad earnings to take you down — you’re doing fine on your own. Add the disdain of the American youth, the ability to bit-torrent your way to stealing free TV shows hours after they air on Cable TV and iTunes and you have a formula for disaster. You’re a Cable TV company that is poorly run, not respected by its own paying members and bullies around its own TV partners (e.g., the CBS kerfuffle) and you’re well on your way towards evanescence.
Wall Street analysts were quoted by the New York Times in its October 31st piece reporting on the Time Warner loss as saying the situation Time Warner finds itself in is “just horrible” and “shocking.” So, now, not only are the users of Time Warner unfulfilled with the company, but we also have the financial community frustrated as well. The result isn’t just a loss of subscribers, it’s a loss of brand value. And, that, is the worst kind of loss of all — think Abercrombie & Fitch and BP (Beyond Petroleum – yeah, sure).
Stop blaming the other guys. You are more to blame than they are. You can keep telling us in public that CBS, ABC, ESPN or FOX are strong-arming you for more money, but content rules – not the pipe. You’re just a pipeline. Keep that in mind.
So, instead of spending your resources fighting network TV companies or creating deceptive campaigns that bash DirecTV and Dish, spend time and money fixing customer service, improving the consistency of your high speed Internet access and, if you want to be forward-thinking, come up with an innovative way to serve up a la carte TV, which everyone wants. Force feeding us content your way is failing. As people age, the new generation of “second screen” TV watchers is certainly willing to give you a second chance and is more than willing to pay for access to good content (just ask the Apple iTunes team) — but not the way you’re doing it now.