Light Reading

TWC: How the Mighty Have Fallen

Alan Breznick
2/3/2014
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It's hard not to feel a bit sorry for Time Warner Cable these days, as the beleaguered MSO keeps running into new walls or tripping over its own wires.

Although it's still the second largest cable operator in the Western Hemisphere, Time Warner Cable Inc. (NYSE: TWC) has definitely lost its aura of invincibility over the last few months. Just like an old boxing champ who has taken one too many shots to the head, the MSO appears to be staggering about as it struggles to stay on its feet in the ring.

In the latest indignity to befall it, TW Cable suffered an embarrassing power outage in its sprawling Los Angeles system during the Super Bowl broadcast late Sunday afternoon. The outage, which lasted more than 70 minutes, knocked out the standard-definition digital feed from KTTV, the local Fox station carrying the NFL championship game.

As a result, TWC's SD digital subscribers didn't get to watch the half-time show staged by Bruno Mars and the Red Hot Chili Peppers. SD viewers also missed parts of the second and third quarters of the matchup between the Denver Broncos and Seattle Seahawks, which quickly turned into a Seahawks rout.

Fortunately for TWC and its Los Angeles subscribers, the outage did not interrupt service for the MSO's HD viewers. Nor did it affect cable viewers watching the Spanish language telecast on Fox Deportes.

But the outage, which TW Cable blamed on an unexplained "technical issue" with KTTV's SD feed, came at precisely the wrong time and in the wrong place for the cable giant. Not only did it occur during the Super Bowl, the most watched telecast of the year, but it occurred in one of the two biggest markets that the MSO serves. Plus, the outage occurred just three days after TWC unveiled ambitious plans to transform its New York and Los Angeles cable systems into showcases of advanced technology and consumer service later this year. Oy!

Of course, it could have been worse. The outage could have affected HD subscribers too and taken place in the even bigger New York market, TWC's hometown. And it could have happened during a close, exciting game, rather than a boring blowout. But that's still small consolation the day after the game, when media headlines across the nation are blaring about the lost video feed in Southern California.

Moreover, the Super Bowl fadeout comes just five months after TW Cable suffered through a public relations trashing by CBS Corp. (NYSE: CBS) over retransmission-consent fees just before the start of the football season late last summer. That bitter losing battle led to probably the worst operating period in the MSO's history, as it shed more than 300,000 video, 100,000 voice, and 24,000 broadband subscribers in the third quarter and entered the fall reeling like a drunk. (See TW Cable Hemorrhages Subs.)

Plus, the video outage comes just weeks after Charter Communications Inc. officials gave their TWC counterparts an extremely rare dressing-down in public. In their zeal to prove that they could manage TWC's assets better than the company's own executives, Charter officials ripped into TWC's "failed operating strategy" and labeled it "a turnaround project," among other derogatory statements. And TWC had to endure all this trash talk from a much smaller cable operator that went bankrupt less than six years earlier and teetered on the threshold of a breakup itself for several years. (See Charter Goes Over TWC's Head.)

So, if the old TWC swagger seems gone these days, it's certainly understandable. At the company's Columbus Circle headquarters, it's not about pride right now, it's about survival.

— Alan Breznick, Cable/Video Practice Leader, Light Reading

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mendyk
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mendyk,
User Rank: Light Sabre
2/4/2014 | 1:23:16 PM
Re: Goodbye Columbus
This may be more a case of neglectful (and maybe worse) parenting on the part of Time Warner. The cable operation is one manifestation of a broader problem -- a company that got into too many things and ended up doing very few of them well. It has a familiar ring, and it's a mistake that usually doesn't get learned from.
albreznick
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albreznick,
User Rank: Blogger
2/4/2014 | 12:30:08 PM
Re: Goodbye Columbus
Oy. That's midtown in name only. They might as well just move to Jersey then and have great views of midtown. 
KBode
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KBode,
User Rank: Light Sabre
2/4/2014 | 9:05:08 AM
Re: Goodbye Columbus
I feel like the decline has been in the works for some time, only recently come to light courtesy of Charter. It probably began in earnest in 2009 when they decided to try and force everybody onto unreasonably low cap and overage data plans, then had to backtrack. It was compounded by the fact they were timind in deploying DOCSIS 3.0 upgrades despite the relative inexpensiveness of the upgrades. They've been writing this mediocre book for a while now.

Now finally they promise real upgrades, but will likely be acquired before those upgrades even arrive. Good job all around I guess.
mendyk
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mendyk,
User Rank: Light Sabre
2/3/2014 | 7:26:09 PM
Re: Goodbye Columbus
Technically, TW will still be in midtown -- but opposite the Javits Gulag.
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
2/3/2014 | 6:51:41 PM
Re: Goodbye Columbus
TWC never misses an opportunity to miss an opportunity. 
albreznick
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albreznick,
User Rank: Blogger
2/3/2014 | 6:09:58 PM
Re: Goodbye Columbus
Yep. Thanks, Dennis. I forgot about that one. Another comedown for the once-proud MSO. Don'tthink the Jersey views will make up for the midtown exodus. 
mendyk
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mendyk,
User Rank: Light Sabre
2/3/2014 | 6:07:31 PM
Goodbye Columbus
FYI, Time Warner announced a week or so ago that it is selling the Time Warner Center and moving to a location nearer the Hudson River. The views of New Jersey will be even more spectacular.
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