Time Warner Cable Loses 300,000 Customers Because Of Idiotic CBS Blackout

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While we didn’t pick sides in the moronic month-long fight between Time Warner Cable and CBS (because they both hate you and are just using you for your money), it always seemed like TWC was fighting the more pointless battle, as it needs the network more than the network needs it and it will be the one that ultimately has to anger customers by increasing their monthly bills. The utter pointlessness of the blackout was made even more evident today when TWC blamed the loss of hundreds of thousands of subscribers on the prolonged spat.

TWC had already admitted that the blackout, which took CBS off the air for 3 million subscribers in major markets like New York City, L.A., and Dallas, and took away Showtime for all TWC subscribers nationwide (right in the middle of Dexter’s inexplicable descent into a Monthy Python skit!), had resulted in losses to its subscriber base, both from customers who fled who cut the cord or fled to satellite competitors and from people who would have signed up for service but were turned off by the standoff.

But the latest quarterly earnings put an actual number of the recent loss of subscribers — 306,000 cable customers, 24,000 Internet subscribers, and 128,000 voice customers. The 306,000 number is double what industry analysts had expected, reports Reuters, and the company had been expected to show a net gain in Internet customers, as opposed to the net loss announced today.

“Not surprisingly we saw come customer relationship disconnect,” Time Warner Cable Chief Operating Officer Rob Marcus admitted in a conference call about the latest earnings report.

The drop in customers and the imminent exit of TWC CEO Glenn “Two Ns, Two Ts” Britt have led to renewed speculation that the country’s second-largest cable provider could be the target of an acquisition attempt by Liberty Media and its billionaire Chairman John Malone. Liberty already owns a 27% stake in Charter Communications and 1% of TWC.

“This enhances Malone’s appeal to Time Warner Cable shareholders that they would be better off with another management team,” one analyst tells the L.A. Times, while another analyst says this bad news makes TWC less alluring as a merger partner.

The motivation for TWC to stick with the blackout long after it became clear that CBS wasn’t going to budge is still unclear. Some argue that Britt was trying to shine a spotlight on the FCC’s ridiculously outdated 1992 retransmission consent rules, but most consumers don’t care about the minutiae of FCC regulations when they just want to relax and watch TV. That is not a fight any cable company will win in the forum of public opinion, especially when the company waging that battle is one of the country’s most-reviled.

And the time to pick that fight is not when the most significant thing you’re blacking out is a ho-hum season of Big Brother and Big Bang Theory reruns. If you’re going to try to convince the TV-watching audience to pay attention to the retrans fee problem, you’ll have to do it when they are unable to watch shows they really want to watch.

Hopefully this huge loss in subscribers will convince other cable operators that forcing blackouts on customers is only going to backfire and result in fewer customers, which can then force the cable company to jack up subscription fees, resulting in further defections.

Stop placing customers in the crossfire and negotiate your retransmission and carriage fee deals in private like grownups.

Time Warner Cable loses subscribers, says open to deals
[Reuters]

Time Warner Cable loses 306,000 subscribers, cites fight with CBS [L.A. Times]

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  1. HungryBear says:

    Well, lets be charitable and say that TW lost only $50.00 per subscriber, that’s still > $15.3 million per month, or $183.6 million per year, probably for at least three years if they ever get them back. That’s a loss of $551 million for………. what again?

    Brilliant!

    (and apparently another Board of Directors sleeps through its meetings)

    • ReverendTed57 says:

      I’m really only replying to see what reply threads look like with the new comment system, but that’s some conservative math and it still doesn’t seem to work out well for TWC.

  2. ReverendTed57 says:

    I dropped TWC last month, but not over the CBS thing. We record over-the-air programs on our TIVO and toss in some Netflix. Only had TWC for Internet.
    (Also, Comments! Yaay!)
    Edit: (Also also, ability to Edit comments for 15 min after posting! Yaay!)

  3. CerneV2 says:

    Someday cable will die and TV will move online so we can just pay for the content we want. I hope that day is soon (of course up here in Canada the CRTC will probably try and put a stop to it).