Time Warner Cable Loses Customers After CBS Blackout
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Variety reports that Time Warner Cable lost 306,000 TV subscribers in the third quarter of 2013, the biggest quarterly loss in the company's history. The unexpected drop is believed to have been primarily caused by the monthlong blackout of CBS stations in August. 
In its quarterly report, Time Warner Cable cut its full-year revenue growth forecast to the 3 to 3.5 percent range. Before the blackout, the growth forecast had been set at 4 to 5 percent. The subscriber loss far exceeded analysts' expectations of 183,000 lost subscribers, according to StreetAccount.
It was TWC's shareholders that took the biggest hit. According to Forbes, net income for TWC shareholders dropped 34.2 percent to $532 million. Earnings per share dropped nearly 30 percent from $2.64.
TWC president and incoming CEO Rob Marcus acknowledged the "short-term pain" caused by the blackout during his Thursday earnings call, but insisted that the blackout allowed the cable company to make a better deal with CBS than what had been offered during the summer.
But one analyst told Variety that this report shows that networks will have an advantage over cable companies in future programming deal negotiations. "Every cable operator now goes to the table knowing that CBS not only won the war, but left TWC badly damaged even for having fought the fight," he said.
On Aug. 2, Time Warner Cable pulled their broadcast of CBS-affiliate networks in the New York, Los Angeles, and Dallas markets. TWC also pulled the premium channel Showtime from all channels nationwide, and CBS blocked TWC broadband users from watching their programs on their website. The blackout was caused by a breakdown in negotiations over retransmission fees, which TV companies pay to local and national stations for the right to carry their programs in local markets. The blackout ended on Sept. 2, shortly before the start of the NFL season.
Read the full story at Variety here
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