Once again Time Warner Cable is taking the right path. This time it is in regards to broadband pricing by usage as reported in the Wall Street Journal today.
Time Warner Cable has taken gutsy positions in recent years trying to control runaway cable television costs that consumers are forced to pay.
Recently they are testing a variety of pricing packages to give customers more choices in broadband at lower costs.
Unfortunately the industry keeps shooting down what customers really want, which is a-la-carte pricing. Paying for the channels you want and saving money. However Time Warner Cable is moving the the right direction anyway despite the rest of the industry.
Now they are trying to help give customers a variety of new choices regarding their broadband services and pricing.
Glenn Britt, Time Warner Cable CEO said last year that introducing a consumption dimension to billing was inevitable. I think most customers would agree. And in fact, as this industry slowly turns around like a giant ship in the sea, I beleive companies like Time Warner Cable will benefit greatly.
As with everything else, finding the right middle ground is key. On one extreme customers would love unlimited service for free. On the other extreme companies would love to charge the maximum price they can to acheive the highest profits.
The cable television industry financial model is broken. First step, prices are increased every year by channels like ESPN and many others, new and old. Second step, the cable television companies have to pay them. Then a third step is the customer pay their cable television companies. That three step process is what is broken. The channels never feel the pain the consumer has with this whole deal.
In recent years Time Warner Cable has taken the position of the consumer and battled for the consumer trying to reduce their costs so they could pass the savings along to customers.
Time Warner Cable may be the only cable television company doing this. We sure don’t hear efforst like this coming from other companies.
Now they want to give customers more choices and help them reduce costs with broadband. They are testing a program where customers get a $5 reduction in the monthly bill if they accept a cap of 5 gigabytes monthly.
This will help separate the users into lower and higher volume and price more appropriately. As an example, customers who don’t watch ESPN should not have to pay to get it to keep the prices lower for those who do watch it.
This move from Time Warner Cable is small, but it is in the right direction. We need to see more of this from all the cable companies. If pressure builds the broken system may be able to be fixed.
The billing model, pricing vs speed vs capacity will continue to adjust as usage continues to change and the industry continues to innovate.
It’s nice to see we have Time Warner Cable and Glenn Britt trying to help the consumer as well as the company.
As I have always said companies can either choose to focus on the investor or the customers.
I think we are seeing Time Warner Cable trying to do the right thing and make sure everyone, investors and customers are rewarded and no one gets hurt to help the other.
In todays marketplace, that’s a pretty darn good place to be.
A pat on the back to Glenn Britt and Time Warner Cable.
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Please attribute to Jeff Kagan, Tech Analyst with www.jeffKAGAN.com
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Jeff KAGAN| Tech Analyst www.jeffKAGAN.com
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