Analyst Pessimistic About Time Warner Cable's Recession Package

Richard Greenfield says the initiative will either underperform or fail.

Time Warner Cable last week said it would test launch a cheap product called TV Essentials, and on Friday one Wall Street analyst called it much ado about nothing.

Richard Greenfield of BTIG said that while the $40 package could easily save subscribers about $32 a month, it requires them to give up too much, including popular content like ESPN, Comedy Central and the Fox News Channel. Also, the package is for video-only, so no DVR, Internet or phone service.

The initiative, he said, is designed to either underperform or fail, because cable subscribers looking to save money have already defected to Dish Network's $40 package called America's Top 120, which he said is better than TV Essentials.

 

"While TV Essentials could be useful in retention, we believe competitors have more attractive options," he said.

Also, he said, TWC would be "idiotic" to offer such a cheap package without the ability to add on other services like Internet of DVR unless it believed that most consumers wouldn't be interested in the first place.

"The package appears to be more of a marketing tool than anything else," Greenfield said. "Get the phone to ring and then upsell digital cable."

comments powered by Disqus