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IP video

TWC Sees IP Video Progress

As it prepares to exit stage right, Time Warner Cable is hoping to leave behind one last technical achievement -- the development of an IP-only TV service.

In his swansong earnings call with financial analysts on Thursday, Time Warner Cable Inc. (NYSE: TWC) Chairman & CEO Rob Marcus reported that the MSO has seen promising results so far from its beta trial of an IP-only TV service in New York City. "The early feedback is encouraging," he said, touting the "simple frictionless experience" that it offers to subscribers. "We think this is great for our customers while at the same time it could significantly reduce our capital and operating costs."

As part of that beta trial, which started last fall, Time Warner Cable is delivering every channel in its standard cable line-up as a unicast video stream to each video customer over its own managed network. TWC executives would like to see the New York trial become the first step in the transition to a set-top-free, all-IP future, enabling them to substitute a full video offering for their traditional set-top box-based video product. (See TWC Steps Toward All-IP TV.)

"The way I would characterize the NYC trial is really the next step in the evolution of TWC TV," Marcus said in October, referring to Time Warner Cable's IPTV app. "The goal there was to create an offering that was complementary to our traditional video product; to add additional screens on additional IP-enabled devices for customers to consume video."

On Thursday's call, Marcus argued that the IP video trial is proof that cable operators like TWC are now more willing than ever to offer customers innovative new types of video delivery. "That's where the industry is going," he said. "In the past, we were much less responsive to what customers wanted."


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Turning to another IP-related subject, Marcus downplayed the impact that the federal government's regulatory conditions might have on Time Warner Cable's all-but-certain new parent, Charter Communications Inc. As part of the expected approval of Charter's pending purchases of TWC and Bright House Networks , New Charter will not be allowed to impose usage-based pricing or data caps on broadband service, charge interconnection fees or make agreements with video programmers that disadvantage online video competitors for the next seven years. (See Wheeler Recommends Charter Deals.)

While Time Warner Cable has dabbled with usage-based pricing and struck an interconnection deal with Netflix Inc. (Nasdaq: NFLX) last year that brings in some revenue, Marcus insisted that TWC will not be much affected by the expected Charter regulatory conditions.

"Interconnection as a revenue source has always been overrated," he said. "The numbers are exceedingly small in terms of our overall business."

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

jbtombes 5/3/2016 | 6:22:20 PM
Re: Marcus Wonder how the NYC beta would have fared under a different merger scenario. In any case, this one had had its own internal antecedents. It was ten years ago that TWC was talking about results from a 'device shifting' or TV-to-PC trial that they'd conducted in San Diego.  
KBode 5/3/2016 | 12:30:13 PM
Re: Marcus I know they've experimented with a similar bundle, but I think have scaled it back from what I read from users. Faces the same problem: if you create a truly appealing service that disrupts on price, you wind up cannibalizing traditional TV. As such I imagine they'll wait until zero hour to seriousl adopt these kinds of services.
alanbreznick 5/3/2016 | 11:41:23 AM
Re: Marcus Yep, I wondered about that. Chatrer has its own IP video agenda. we'll see how that meshes with this trial. And it will be interesting to see what Marcus does next. Who knows? MAybe he'll start his own IPTV firm. 
KBode 5/2/2016 | 9:55:17 AM
Marcus Of course it's now somebody else's problem as Marcus prepares to ride his $91 million golden parachute off into the sunset.

The trial may be "encouraging," but like most cable companies Time Warner Cable didn't want to risk cannibalizing existing pay TV subs by offering something truly disruptive on price, which is why the trial remained ony in New York and likely won't be expanding under Charter ownership. But we'll see. 
danielcawrey 5/1/2016 | 2:18:22 PM
IP All IP is the future of video services. I think there are going to be a number of technology companies that would love to plug in to these video offerings. If the IP streams aren't totally proprietary, I would expect to see Google, Apple and many more figure out services around streaming. 
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