Time Warner Cable’s Subdued Acquisition
Posted on August 15, 2011
Filed Under General
Who needs to pay a cable bill anymore? I mean, really, paying for TV when you’re already paying for Web access? There’s plenty to watch for free online, and not enough time to watch a tiny fraction of what may interest you.
Bear in mind that this is not a question I’m asking of myself. I’m still pretty dedicated to shelling out the bucks each month for Turner Classic Movies and HBO and whatever else comes with the package. But the notion of paying money to a cable operator for access to time-based TV programming is sounding crazier and crazier to those just out of college—and to those who are out of work.
In the midst of this so-called cord cutting—or cord avoidance—Time Warner Cable has announced the acquisition of cable operator Insight Communications. Of course, cable operators also offer high-speed Internet service, as well digital phone service. The core, though, has been traditional basic and premium TV programming packages.
In its announcement and in media reports, Time Warner Cable stressed the attractive price for Insight and the growing importance of Internet access for cable operators. But the message the company is sending to investors and consumers is a bit confused. TWC is buying another cable operator so it can expand its footprint and build its Internet access business, yet it’s the Internet that is killing its traditional cable TV service.
This message probably reflects confusion within the company about how to proceed and grow as a viable business. This is not a criticism of Time Warner Cable—it’s just the reality for many corporate sectors that are trying to adapt to and embrace new digital realities that are simultaneously destroying their business models.
These kinds of paradoxical business moves can tie communicators and CEOs into knots, as they attempt to explain the wisdom of an acquisition to stakeholders in the age of free stuff on the Web.