TWC CEO warns against free web content
Says entertainment firms won't hurt their businessNEW YORK -- Time Warner Cable chairman, president and CEO Glenn Britt on Wednesday warned entertainment companies that giving too much content away for free online could hurt their business.
He also said he still feels that cable is a good business despite slower near-term growth amid a weak economy and continued challenges in the housing market.
Speaking at the 19th annual Goldman Sachs Communacopia conference for media and entertainment investors, Britt was asked about the growing availability of content online.
"Even I like free," he told the conference. But since TW Cable provides the necessary broadband service, he said it can participate in any online usage, arguing that this is a bigger issue for entertainment than for cable companies.
But he also seemed to signal confidence that content partners won't kill cable companies' video subscription business.
Britt said that entertainment companies are "starting to realize...that giving away their content for free is not going to be healthy for their business in the long run."
Highlighting that most profit at entertainment giants comes from cable networks, he said: "If they mess that up, their business is going to collapse."
Britt immediately added that this comment may overstate things a bit, but he expressed confidence that content firms won't give away all their content for free.
Asked whether running cable systems is still a good business, Britt said; "I feel very good about the business...It's a very strong business."
TW Cable CFO Rob Marcus had warned of slow third-quarter subscriber momentum last week, which could lead to a decline in overall revenue generating units or total subscriber relations.
Explaining the reasons for the current subscriber weakness, Britt said: "What's going on is a direct result of the economy," as the downturn and housing crisis has reduced the number of households cable firms can market to. "There is nothing we can do to sell to a vacant house," Britt said.
Given that the economy and housing market will eventually improve, he told investors that this is "not a reason to panic."
While TW Cable has been growing slower than before in a weak economic and housing environment, it is still growing and continued to do so even in the recession, Britt highlighted. Once a clear rebound materializes, there should be growth opportunities for cable, he said.