Around Town

In case you needed another reason to dislike Time Warner, new fee increase

The Story

Time Warner Cable is raising rates due to higher costs of sports programming, reports Jonathan McFadden from the Observer. Starting Jan. 1,  customers will be charged a new $2.75/mo fee.

The Facts

– Time Warner Cable serves about 50% of local Charlotte households.

– Modem rentals are also increasing from $5.99/mo to $8/mo and subscribers that have a la carte HBO will see an increase from $14.99/mo to $16.99/mo.

– ESPN is the most expensive channel for cable providers. According to analysts, ESPN costs Time Warner Cable $6.04/mo per customer. TNT is the second most expensive, charging Time Warner Cable $1.44/mo per customer.

– Let’s back up in case you don’t understand this business. Here’s a quick example: Time Warner Cable buys content (ex. ESPN, TNT, etc), packages it together and charges you for access. As sports become increasingly popular, channels such as ESPN can dictate terms to cable providers – example: if Time Warner Cable dropped ESPN, their customers would freak out.

Quotes

“Nothing gets my blood boiling like a call to Time Warner Cable. From screaming at the robot all the way to talking to the “offshore” customer service, it’s guaranteed to be an infuriating experience from start to finish. Crooks.” – CharlotteObserver.com commenter.

“I’m stocking up on DVDs & reading about the best antennas for local.” – CharlotteObserver.com commenter.

C5’s Take:

Let’s take Time Warner Cable’s customer service out of this discussion – it stinks, we get that. In general, I dream of a world in which I can get ESPN/sports and then supplement with Netflix/HBO. The issue is that ESPN is generating silly amounts of money by increasing rates to cable providers (like Time Warner Cable), thus isn’t incentivized to give me content directly. Our prediction: this entire space is going to get disrupted. Winners will be the people with the pipe (thus Google Fiber investment), amazing content companies (thus high valuations for HBO) and customers like you (eventually).

Photo: Mark Hames / Charlotte Observer

  Comments