Time Warner Cable Inc (NYSE:TWC) CEO Glenn Britt told entertainment companies that he plans to review all of its company’s programming contracts and get rid of channels that are too expensive when compared to the value they offer. Britt’s comments were made at an investor conference today, and he said that they will especially be looking at channels which receive “hash-mark ratings.”
Time Warner Cable Inc (NYSE:TWC) is just one of many cable companies that have spoken out against the rising costs of programming, especially sports programming. Since 2008, the company’s programming costs have increased by about a third, which has pushed prices for cable television up by about 15 percent, according to Britt. He also said that the price of cable is rising too rapidly for most consumers to afford.
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The biggest problem Time Warner Cable Inc (NYSE:TWC) could have with dropping low performing channels is the fact that many owners bundle those channels in with other channels that have high ratings. Often, if cable companies don’t purchase these bundles, they lose access to high performing channels in addition to the channels they no longer want to carry.
The other problem Time Warner and other cable companies face is the phenomenon of “cord cutting,” which is essentially getting rid of cable and replacing it with over-the-air television, which is free. Many consumers say they are cutting the cord because the price of cable has simply become higher than they can afford. Also, the availability of online video sources that are less expensive than cable has made cutting the cord easier for consumers today than it was five years ago.