TW Cable Chief Disses Netflix Streaming

Netflix Inc. (Nasdaq: NFLX) may have Time Warner Cable Inc. (NYSE: TWC) on notice, but the MSO's president and CEO says the video competitor's new streaming-only service leaves something to be desired.

"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:

  • He said the concept of usage-based billing for Internet services is less of a "serious political issue at this point" following the Federal Communications Commission (FCC) 's newly proposed framework for network neutrality rules. TWC launched a metered billing trial, but later mothballed it amid a firestorm of scrutiny. (See Net Neutrality Sweep: Everyone's Ticked.)

  • On the spat between Level 3 Communications Inc. (NYSE: LVLT) and Comcast Corp. (Nasdaq: CMCSA, CMCSK): "This is not a new thing. If the traffic is way out of balance, then somebody pays somebody else," Britt said. "I think, because Comcast is trying to get their NBC deal approved, Level 3 decided to make an issue of this." (See Level 3: This Is Not a Peering Dispute and Did Level 3 Know What It Was Getting Into?)

  • Britt confirmed that TWC hit the $1 billion mark in annual commercial services revenue through November, so it joins Cox Communications Inc. and (soon) Comcast with that distinction. (See Cable's Newest Billionaire: Cox Business and Cable's $5B Biz Services Bonanza .)

    — Jeff Baumgartner, Site Editor, Light Reading Cable

  • Pete Baldwin 12/5/2012 | 4:16:35 PM
    re: TW Cable Chief Disses Netflix Streaming

    "...seven or eight hours of TV,which is how … people use our service"

    Wow. When they put it like that, cable sounds downright evil. :)

    Jeff Baumgartner 12/5/2012 | 4:16:34 PM
    re: TW Cable Chief Disses Netflix Streaming

    Looks like Britt and Time Warner Inc. chairman and CEO Jeff Bewkes are on the same page here, or at least appear to be using similar talking points when it comes to Netflix.

     Bewkes, at the same conference and in response to questions that Netflix is looking to pay as much as $100K per in-season episode of TV shows for streaming, said: "If you took your example [of price], which is a measly little offer... that is not attractive or incremental" versus the fact that studios and conent companies can rake in millions using syndication cycles and DVD release windows.

    "I don't think it makes sense" for content firms to pay big money to produce high-quality TV series and for networks to pay high price tags for them only to have them show up on a low-priced Web service, which pays only a fraction, he said, according to The Hollywood Reporter.


    Jeff Baumgartner 12/5/2012 | 4:16:34 PM
    re: TW Cable Chief Disses Netflix Streaming

    Keeping you captive is a good thing... for them, anyway. :)

    Now if it all goes OTT and they can charge bandwidth overages and build in the funding of network upgrades...

    ycurrent 12/5/2012 | 4:16:33 PM
    re: TW Cable Chief Disses Netflix Streaming

    This is Google TV's fundamental problem as well.  Can't get content if you aint gonna pay for it.  I'm willing to bet that changing models for DVD windows benefits Netflix streaming before the adoption of video advertising benefits Google TV.

    IRM 12/5/2012 | 4:16:23 PM
    re: TW Cable Chief Disses Netflix Streaming

    Yeah, about those $Millions from syndication and DVDs...I think that burning smell is coming from the studio/content system.  Surely, a Web 2 world holds some interesting new content ideas. Might be a better way to spend my 7 or 8 hours.

    Sign In