Time Warner Cable chairman and CEO Rob Marcus, in perhaps his last quarterly conference call with analysts, said that the recent surge in over-the-top video offerings don’t present a competitive threat to his business now, but could lead to greater content packaging flexibility in the future.
Home Box Office and CBS each announced their own planned OTT offering last month, and though Marcus wouldn’t comment directly on those services, he said that OTT in general as it stands today doesn’t hold a candle to video offerings from cable.
“We continue to believe our video value proposition is a compelling one, especially with the improvements we’re making in the guide and the size of the VOD library and the continued improvements in the TWC TV app ,” Marcus said. “We’re not terribly concerned about others eating into that via over-the-top offerings.”
But the TWC chief did say that one “intriguing” aspect of OTT is that it could finally loosen up the bundles of video programming that content providers sell, allowing for a greater degree of flexibility in the ability to package and time-shift programming.
“To the extent last week’s announcements reflect an increased willingness on the part of programmers’ to embrace that kind of flexibility, we’re intrigued and we’re more than prepared to work with programmers to deliver an even better video offering to our customers,” Marcus said. “We’ve always said that over-the-top video was the killer app for high-speed data. Offerings like the ones we’ve seen announced can only create more demand for a really robust HSD offering.”
Marcus also commented on the cable operator’s Los Angeles Dodgers RSN (SportsNet LA), which failed to secure carriage agreements from other large distributors in that market during the Major League Baseball season. TWC allowed the last six games of the regular season to be broadcast on local TV station KDOC.
While costs for the Dodgers RSN were a component of the 9.6% increase in programming and content expenses in the period, Marcus said the L.A. market was TWC’s top performer in terms of video subscribers.
“Draw whatever conclusions you want from that,” he said, adding that the channel had meaningful viewership on TWC systems. “I don’t think our view of the value of that network is in any way diminished as a result of the affiliate sales experience we’ve had in Season One.”
Time Warner Cable shares were down about 1% ($1.34 each) to $142.41 per share in early trading.