What Happened
Time Warner Cable (TWC) is set to test a new Internet TV service in New York City this week in a bid to stop hemorrhaging cable subscribers. Designed for users who only signed up for Internet service, TWC will be offering a “Starter” package at an additional $10 per month that covers all broadcast channels. Interestingly, TWC will also be giving out Roku 3 boxes for free to these customers, truly bringing TV into the OTT era.
Market Impact
In August, the cable industry suffered a massive stock sell-off triggered by the increasing momentum of cord-cutting. In addition, a new report from Forrester Research found that cord-nevers – people who have never subscribed to a traditional pay-TV service – now make up 18% of the U.S. population. The study also estimates that by 2025, half of all TV viewers under age 32 will not be paying for cable TV subscriptions. Therefore, it makes perfect sense for TWC to start experimenting with selling TV packages as an add-on to its internet services in order to adapt to changing viewer behavior.
Currently, Dish Network’s Sling TV remains the only widely-available Internet TV service on the market. Comcast recently launched its OTT service Stream, which allows subscribers to stream select TV content on mobile devices only, while Cablevision started selling “cord-cutter” internet packages that come with antennas and subscriptions to Hulu and HBO. But with Apple’s TV subscription service set to launch in 2016 and now TWC jumping onboard, the battle for retaining TV subscribers and, more importantly, selling TV packages to cord-cutters and cord-nevers, has just begun.
Source: Engadget
