Why Are Cable Outlets Struggling?
The recent news that Charter Communications is trying to buy Time Warner Cable and that Comcast is also looking to possibly bid for them is stunning. Time Warner was the big boy in town not so long ago, and is still pretty big. Why is Time Warner considering the deal?
Over the past few years, all cable outlets have started to struggle because of the online options for watching television programs. Sites like Hulu Plus, which offers much of the same TV programming that cable does, and services like Netflix, which offers most of the movies that show up on paid channels, have taken away the exclusivity of much of the programming. And having competitors like Verizon, a company that attacks their phone and internet services as well, Dish TV and other options that seem to come in at a less expensive rate certainly seem to be taking their toll on the giant media company, whose merger with AOL almost 15 years ago was the albatross around their neck that was also a drain on their resources.
I’m one of those people who’s a very loyal customer unless someone is really getting on my nerves. It’s what led me to change banking systems after being with one for 25 years and it’s the same type of thing that’s kept me from even thinking about looking at different insurance companies for my car and home.
I’ve been with Time Warner for 38 years and never really had a problem with them. I have cable, cable phone, internet and alarm with them. I run a 30MBPS internet system and have 3 boxes in the house, all hi-definition and two that are DVR. Theirs is the only system in the area that lets me stop a program, even a live program, and leave it on hold for up to an hour if I so choose; that’s pretty cool.
I also pay just under $300 for the privilege, and at a certain point I’m going to have to take a serious look at that because the only pay channel I pay for is HBO, and that’s only $8 a month. At a point of comparison a year ago I was paying $215 a month, and the only thing that’s changed is upgrading my internet speed, which was only a $20 increase.
By comparison, the same deal with Verizon would cost me $99.00, and the only two things they don’t have are the boxes that freeze time and the alarm system. At different times of the year they offer an upgrade for a year to 50MBPS for $20 and, for a week last year they offered an upgrade to 75MBPS for $35; wow!
Comcast doesn’t have the best reputation, so why would they be interested in trying to buy Time Warner if things look so bleak? By increasing its size it would gain some major markets it’s not in right now and be able to work on undercutting some of the rates that they and Time Warner are stuck with now. Many of those rates have to do with negotiations for programming, and from what I hear Comcast is thinking about offering subscription packages so consumers can request the channels they actually want to watch rather than paying for everything, which does spread costs around better but penalizes those people who might only have a few favorite channels, with everything else being overkill. This is something Time Warner has never wanted to do.
My last visit to Best Buy to try to find a converter DVD box I could purchase without having to rent from Time Warner led the sales person to try to push Hulu Plus on me, including their converter box. That I even gave it a thought tells me that looking at new ways to save more money might mean changing my mindset just a bit. What I’d lose of course would be local channels, and I’d keep that with Verizon.
It’s not easy to even thinking about giving up something you like, even when costs start getting prohibitive. But with other bills always on the horizon, it just might be smart to take a new look at other options. What do you think?