Time Warner Lost A Bunch Of Customers So It Charged The Remaining Ones More

Time Warner Cable lost a bunch of customers in Q4 2013 — including 217,000 residential cable TV subscribers — and yet its revenues still climbed 1.6% to $US5.7 billion.

How did it manage this counterintuitive feat?

By charging its remaining subscribers more money.

Average monthly revenue per residential user (ARPU) grew 2.2% to $US106.03 a month, “the highest rate of growth since the first quarter of 2012,” TWC said. Revenues-per-user for those who only get cable for the internet increased 12.4% to $US46.21 a month.

This is the state of the cable TV business today: Cable TV — that thing everyone used to watch until the 1990s — is basically dying. Among to TWC’s 217,000 disappearing cable TV customers were a loss of 85,000 residential customers of all kinds, including broadband web customers. Total customer relationship including businesses declined 67,000 to 15 million.

So the only way TWC can get more money is by charging its remaining customers more and more. Meanwhile, streaming video services like Netflix and Amazon Prime offer subscribers a cheaper monthly fee to access similar TV content.

Despite those headwinds, CEO Rob Marcus thinks 1 million new customers will appear in 2014, according to Bloomberg, and sales will grow 4 per cent to 5 per cent.

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