Video services

No-Frills Cable TV

11:00 AM -- Time Warner Cable Inc. (NYSE: TWC) chief marketing officer Sam Howe offered the first public glimpse of a new, low-end video offering at this week's SNL Kagan conference in New York, and, perhaps to no-one's surprise, ESPN, the most expensive cable network of the lot at a reported US$4 per sub, didn't make the cut.

Sanford C. Bernstein & Co. Inc. analyst Craig Moffett, who moderated the panel with Howe, issued a note Thursday about the "TV Essentials" package, stating that TWC plans to launch it by around mid-December.

TWC is currently market testing it in Cleveland, New York, and parts of Ohio for $39.95 to $29.95 per month, though Moffett thinks it'll end up getting priced on the higher end of that range.

The new tier is coming into play as cable operators continue to shed basic video subscribers in the face of consumers, hit hard by the economy, seeking out cheaper alternatives, including over-the-top options. Hard to say if TV Essentials will address the needs of the budding "cord-cutting" crowd, but it could keep "cord-shavers" some from downgrading to the cheapest basic cable TV package. (See Where Did Everyone Go? .)

On that note, Moffett points out that TV Essentials is a 'tweener tier that will end in the middle of cable's basic packages (from $10 to $15 per month) and expanded basic packages, which sell for $50 to $60.

But TWC can't just pick and choose how TV Essentials is being assembled. A package like that, Moffett writes, "can only be offered with the cooperation and consent of content providers who are increasingly wedded to full distribution of all their cable channels."

In the case of Walt Disney Co. (NYSE: DIS), it's allowing TWC to offer a tier without ESPN and The Disney Channel, but ESPN News is in there.

But several others aren't making the cut on the new tier, which is expected to have about 50 channels. According to the Los Angeles Times, others that won't make it in initially include TNT and CNBC, while TBS, CNN, Fox News, and MSNBC will be part of the new package.

The article notes that those customers who sign up for the new package can still order premium channels like HBO, but will have to pay the full freight... no discounts allowed. It also mentions that they can't get DVRs as part of the tier, which could end up being a a deal-breaker for some.

— Jeff Baumgartner, Site Editor, Light Reading Cable

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