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Price Conscious: TW Cable Touts ‘Free’

Nov 9, 2008  •  Post A Comment

Amid the economic downturn, Time Warner Cable has stepped up promotion of its high-definition television service by highlighting its price—or lack thereof.

HDTV Update

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“Time Warner Cable is the home of free HD,” said spokeswoman Robyn Watson. “This is consistently the driver of customer acquisition, since most competitors charge for even the basic HD channels. We don’t understand why some operators charge customers twice for the same programming they are already providing.”

Whether the effort is a case of “better late than never” is a question analysts who cover multichannel service operators have been asking all year. While Comcast was pushing its “1,000 choices” campaign and DirecTV and Dish were publicizing their race toward 100 HD linear channels, some analysts covering Time Warner Cable said midyear that it was missing a marketing opportunity by not promoting its HD inventory as aggressively as its competitors did.

Since then, though, TWC, whose 13.3 million third-quarter cable subscribers trail only Comcast’s 24.4 million among U.S. cable companies, appears to have stepped up the effort. That includes bright orange linkable Time Warner Cable advertisements on Web portals like Yahoo that highlight “Free HDTV and DVR service.”

TWC last month responded to Verizon’s recent marketing blitz for its FiOS service in New York City by sending out mailers promoting its triple-play package, which bundles video, high-speed Internet and phone services. Pali Research analyst Rich Greenfield praised TWC’s move in a note to clients late last month, but added the effort came “52 months later” than Long Island’s Cablevision started using the same strategy to attract customers.

Still, TWC, whose majority owner Time Warner Inc. said in May that it would divest the company, may have further marketing opportunities as its technological investments clear the bandwidth necessary to expand its HD linear channel selection beyond its current inventory, Sanford C. Bernstein analyst Craig Moffett wrote last week. TWC’s 45 HD channels is about equal to Comcast, though about half what Dish, DirecTV and FiOS offer.

“Time Warner Cable has been somewhat more aggressive with technology initiatives like Switched Digital Video, leaving their physical plant in a somewhat better state of readiness than Comcast’s,” Mr. Moffett, who covers both, wrote to clients.

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