"We are certainly paying attention to them," MSO chief Glenn Britt said today at the UBS Research Global Media and Communication Conference in New York. "I think if you buy their online service today, and not the DVD service, most people find the content to be fairly thin. That's why it's so inexpensive.
"The reality is the content isn't that great," he added later.
Netflix launched the $7.99 US version of its streaming-only option last month, following the debut of a similar service for Canada. About one fifth of Netflix's library of 100,000 DVD titles is offered via its "Watch Instantly" streaming service. (See Netflix Debuts Streaming-Only Option .)
Britt did give Netflix high marks on its interface, but he said TWC intends to make its own video services and navigation tools available on a wide range of consumer electronic devices, starting with the Apple Inc. (Nasdaq: AAPL) iPad. In fact, TWC apparently wants to replicate much of what Netflix, Hulu LLC , and Pandora Media Inc. are doing in the consumer electronics world. (See TWC Preaches Openness With iPad Tilt .)
"We think there should be a Time Warner Cable widget that shows up," Britt said.
Cords not being cut
He also downplayed Netflix's role in the cord-cutting trend.
"I think there are very few people buying Netflix today who don't buy some other video services... It's not a substitute, again for seven or eight hours of TV, which is how... people use our service."
Britt said TWC has yet to find "any meaningful evidence" of cord-cutting, seeing it only in "very, very small numbers." ESPN today issued an analysis of the Nielsen national people meter sample showing that that 0.11 percent of US homes had indeed cut the cord. (See ESPN Study: 0.1% of US Homes Cut Cord.)
"Yes, people are watching TV online," Britt said. "So we don't have our heads in the sand; we are not denying that."
TWC is responding to the tough economy's effect on consumers by testing out TV Essentials, a trimmed-down, sports-free subscription tier, in Cleveland and New York City. (See No-Frills Cable TV .)
"It has at least one network from each of the big genres in it, except sports; sports are very expensive. It is not for everyone. It is meant to target this particular segment."
Britt wouldn’t say how profitable the new tier is under its test pricing, but noted that "the margin is very nice on this."
Other items of note from Britt's talk:
— Jeff Baumgartner, Site Editor, Light Reading Cable