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Time Warner Boosts Cable Offerings to Battle Satellite TV

Time Warner Boosts Cable Offerings to Battle Satellite TV


San Fernando Valley Business Journal

West San Fernando Valley cable viewers are the first in the United States to have a 402-channel lineup, according to Time Warner Cable officials, who have tripled their channel choices in the last two months as part of an effort to compete with satellite television.

“We’re now on a par with satellite companies and we hope to improve upon that,” said Max Herbas, director of new products for Time Warner Cable’s Los Angeles Division.

Time Warner is offering 402 channels as part of its conversion from an analog to a digital cable system. The changeover means residents can opt to keep their 80-channel analog cable service for $42.50 per month or upgrade it to the digital system for about $70 a month (depending on the premium movie channels they choose), Herbas said.

Time Warner said it spent in excess of $60 million to upgrade to a digital system in the Los Angeles area.

The digital channel lineup includes all 21 on-air channels in the Los Angeles metro area, basic cable channels like CNN and MTV, 10 HBO channels, 10 Showtime channels, four channels of The Movie Channel, STARZ and Encore premium movie channels.

Analysts said cable companies are feeling the pressure to upgrade to more expensive digital systems to reduce the continued migration of its customers to satellite television systems.

“Cable television has become more expensive while offering fewer channels than satellite TV systems,” said Lara Warner, an analyst for Lehman Brothers. “They have to keep these customers and, in order to do that, they have to offer a wider variety of channels.”

Analysts said cable companies continue to lose viewers to popular satellite services like EchoStar’s Dish Network and DirecTV, owned by General Motors Corp.’s Hughes Electronics. Pending regulatory approval, EchoStar plans to acquire DirecTV.

Though satellite TV subscribers initially pay more than $200 for the dish and related equipment, Warner said the deal is attractive to those fed up with escalating cable prices.

Meanwhile, the progress of true video-on-demand is hurting cable companies who need all the help they can get to retain viewers.

So far, Time Warner said, the VOD service has performed well in tests. But it’s unclear whether the service will prove useful in keeping and attracting viewers to cable.

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