New York — Cable TV for 70 bucks a month is just too much for a lot of consumers, according to Peter Stern, EVP and chief strategy officer at Time Warner Cable.
Stern, speaking on a panel Wednesday at a luncheon hosted by Women in Cable Telecommunications’ New York chapter, said programming costs continue to rise faster than the growth of the U.S. gross domestic product. That would be true even if the economy weren’t stuck in neutral, he added.
“When you have $70 for cable, or $7 for Netflix or zero dollars for whatever you can find for free on the Internet — the gulf is too wide,” Stern said. “We need to move away from monolithic packages…. We’re going to have to have more choices.”
In the past week, there’s been a lot of discussion in the industry about how expensive ESPN is getting. It’s already by far the most expensive cable network on the planet at an average of $4.69 per month per subscriber for 2011, according to SNL Kagan. With ESPN’s recent deal with the NFL for Monday Night Football in range of $15 billion over eight years, there’s been an increase in chatter about whether ESPN will move to a sports tier (something Disney certainly does not want to have happen) or whether more operators will introduce non-sports TV packages.
Stern noted that TWC late last year introduced TV Essentials, a $30-$40 monthly package with broadcast channels and about 40 networks, “and the business didn’t blow up.”
TV Essentials, in fact, excludes ESPN and ESPN2, carrying ESPNews and Universal Sports as the only dedicated sports channels.
Meanwhile, on the over-the-top front, Stern said that the only thing Netflix does better than TWC is content discovery.
“The only thing they do better than us — and it sure isn’t content — is that it’s easier to find things in their limited content,” he said. Time Warner Cable is taking steps to address that shortcoming. For example, it’s adding new features to its iPad app to provide better search and recommendation features.
“It’s a shame that Netflix offers 100,000 choices” — although that’s the DVD library — “and our on-demand hasn’t kept up with that,” Stern said.
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