Time Warner has been testing out a “consumption based billing” structure for its broadband internet service in Beaumont, Texas and plans to expand the trials to San Antonio and Austin; Rochester, New York; and Greensboro, North Carolina sometime this summer.
Up to this point, bandwidth has been capped at 5-, 10-, 20-, and 40-gigabyte levels ranging from $30 to $55 per month, but a recent post from Time Warner Chief Operating Officer, Landel Hobbs, responds to some criticism and outlines plans for two additional pricing tiers. → Read More
With Time Warner reporting earnings yesterday, we now have online advertising numbers for the fourth quarter from the four largest players: Google, Yahoo, Microsoft, and AOL. Tallying up their online advertising revenues provides a decent proxy for the health of the overall online advertising industry as a whole, since they represent a majority of those revenues. (For comparison, see IAB numbers for the U.S. only). After a full year of slowing growth, their combined ad revenues actually picked up in the fourth quarter, showing a 3 percent rise compared to the third quarter. Combined revenues grew 8 percent on an annual basis.
Like everyone else, I’ve been expecting to see continuing pressure on Internet advertising. In the third quarter, the sequential growth of the combined ad revenues from these four companies ground to a halt, going from 12.7 percent sequential growth in the fourth quarter of 2007 to 0.6 percent in the third. (All growth rates are quarter over quarter, unless otherwise noted).
What the slight rebound in growth tells us is that search advertising may be making up for the continued weakness in display advertising, which each of these companies acknowledged in their conference calls. The question is whether sequential growth will remain in this low range for the rest of the year, or whether search advertising can push it higher. One quarter’s worth of data is not enough to make any conclusons on that front, but at least these numbers provide a ray of hope. → Read More
Time Warner subscribers almost, almost lost some of the best cable networks if a deal hadn’t been struck by the time the NYV ball dropped. Thankfully, Viacom and Time Warner came together in the name of the subscribers (and money) and penned an agreement in principle that will keep Dora and Stewart on the air. → Read More
Time Warner reported its third quarter results today and revealed that the AOL business isn’t doing too well but not as bad as some had expected (though it’s bound to get worse this quarter).
Total revenues for Time Warner Cable remained flat compared to the same period in 2007 at $11.7 billion with earnings of 30 cents a share, while revenues for the AOL segment decreased 17% ($207 million) to $1.0 billion. Ad spending is hurting (6% decrease to $33 million), as are revenues from subscription services (26% decrease to $165 million). → Read More
We really ought to applaud Time Warner, I think. A company that owns the rights to broadcast some of the major networks in certain markets, LIN TV, has been playing hardball with the cable operator, demanding more money for access to the channels. Time Warner is all, “But, you can get these channels for free over the air, and many times online, why should we pay you (and raise our subscribers’ prices)?” So, rather than pony up the cash—so far, at least—Time Warner is telling its subscribers how to watch these networks online for free. Not illegal stuff like The Pirate Bay, but legal avenues like Hulu and ABC’s streaming. A message on affected subscribers TVs informs them to go to Time Warner’s site for more information, including instructional videos and the like. Now, how this all resolves itself is still up in the air—no one really expects Time Warner to leave the affected networks off its cable systems for good. That said, how greedy of LIN TV. How is it going to mark up the price of something that’s freely available elsewhere? Next thing you know, we’ll all be buying bottled water! → Read More
So Comcast is implementing a 250GB monthly bandwidth cap starting next month. While some consumers are up in arms about the true meaning of “unlimited” internet access, others have focused on how these caps will affect the innovation of web-based services, particularly video streaming and downloading. Roku, maker of the Netflix-streaming box (reviewed here), isn’t too concerned, according to NewTeeVee. Tim Twerdhal, VP of consumer products, says: “It really doesn’t give me a lot of concern. It’s unfortunate that the limitless possibilities are being capped by an ISP, but it has no direct business impact on us.” → Read More
Time Warner is moving forward with its plans to sell off AOL in pieces, and is finally ready to formally separate the AOL portal and advertising business from its legacy dial-up access business. But how much can it hope to get for these parts? When Google invested $1 billion in AOL a few years ago for a 5 percent stake, that valued AOL at $20 billion (which some people thought was an inflated figure even back then). Today, even after breaking it up, Time Warner will be lucky to get more than $7 billion for the whole lot. Although it wants $10 billion for just the advertising and content business, there are only two serious potential buyers: Yahoo and Microsoft. And Time Warner is not making any friends at Yahoo by interfering with the selection of one of its new board members. If Microsoft turns out to be the only bidder, it would have no reason to offer much more than the $4 billion that the market is valuing the business at today. And, of course, all bets are off if Microsoft ends up buying Yahoo instead. (The dial-up business also only has one serious buyer: Earthlink). According the WSJ (subscription required): The Yahoo discussions have valued AOL at around $10 billion, excluding the dial-up business. In contrast, Time Warner’s current stock price — around $14 — suggests a value of no more than $3 billion to $4 billion for the ad-sales and content businesses, some analysts say. Analysts value the [dial-up] business at only $2 billion to $3 billion, but Time Warner is expected to seek more than that in any sale discussion, according to people familiar with the situation. Despite having been in decline for several years, the business is still profitable and generates a predictable stream of cash. It serves 8.7 million subscribers, while EarthLink, the second-biggest dial-up service, serves 3.3 million, including broadband and Web-hosting subscribers If Time Warner can convince Yahoo it still needs AOL, it might get closer to that $10 billion valuation for the online ad and content business. (Except that transaction would likely be structured so that Time Warner gives Yahoo cash in return for a large minority stake in the new combined AOL-Yahoo). According to comScore, AOL’s Platform-A is the largest online advertising network in the U.S. in terms of its reach, with 170 million individuals seeing its ads in June. → Read More
The Yahoo shareholder meeting is going on right now, but already not everything is going according to plan. Yahoo was able to avoid a showdown today with activist investor Carl Icahn by agreeing to open up three board seats. Icahn is taking one, and the board will vote for the other two members. Former AOL CEO Jonathan Miller was added to the list of candidates at the request of Yahoo, and was considered a shoo-in for one of the two other available seats. Not anymore. At the 11th hour last night, Time Warner decided to object to Miller’s appointment to the board, according to three sources, including a former AOL executive close to Miller. Without Time Warner’s blessing, Miller cannot serve on Yahoo’s board since he is still under a non-compete agreement with AOL. Why Time Warner would decide to do this is unclear. Before Yahoo and Carl Icahn publicly disclosed Miler’s name as an addition to the slate of people Yahoo’s board will choose from to fill the extra seats, Time Warner gave the green light to Miller’s inclusion. Now the strategy has changed, and last night Time Warner CEO Jeffrey Bewkes reneged on his earlier approval in a phone call to Miller. It gave no reason for the about-face. (Former Viacom CEO Frank Biondi is now a favorite to take one of the two available board seats). When Jerry Yang found out about this he was “fucking livid,” says a source. Miller was someone Yang felt he could work with on the board and lean on for advice, given Miller’s past experience running AOL. Miller was someone Icahn was happy with as well. So Time Warner just pissed off one of two possible buyers for AOL. Time Warner management has been obsessed with trying to sell off AOL, and the only two realistic buyers are Yahoo and Microsoft. “It is the entire AOL strategy,” says the former AOL executive. Now,Time Warner is angering a potential bidder for AOL, and effectively giving Microsoft more leverage to give a lowball offer. Institutional shareholders, many of whom own large chunks of both Yahoo and Time Warner, won’t be too happy about that. “If you are the SS Titanic of AOL, you have to be friends with everybody,” says the befuddled former AOL exec. What is ironic is that if anyone could have made a Yahoo-AOL deal work it would have been → Read More
Comcast, Verizon, and Time Warner Cable are all sniping at each other, emphasizing the minor advantages their overpriced service has over the competitor’s overpriced service. They’re trading whiny potshots over whether the fiber goes to the house, what “compression” means, and so on, when they should be doing that other stuff cable companies do, like throttling my bandwidth and reporting my usage statistics to the Department of Homeland Security. You know when there’s this kind of catfight that none of them have anything decent to offer. If any one of them really had a truly superior product, they would be able to say so with authority and the benefits would be manifest. But this kind of little dust-up just means they’ve all got nothing and their lawyers just needed a workout. → Read More
Is this the beginning of the end for Usenet as we know it? Wouldn’t surprise me. It broke last week that New York’s attorney general had targeted Usenet because of the existence of child pornography. Fair enough, no one wants that. But the reaction by several ISPs could set a dangerous precedent, and could threaten the way Usenet works. Time Warner, my ISP (for the time being), will no longer carry Usenet at all once the end of the month rolls around. Not just binary groups, the only place where the offending content could be posted (other than plain text links, I suppose), but all of Usenet. That’s a shame, as I learned a good deal from the comp.sys* groups back in the day. No more free movies and so on, either. You’ll still be able to access Usenet through a third-party server like Giganews, but Time Warner will no longer provide access. I wonder if it’ll lower my bill, then? → Read More
Flickr’d AT&T is the latest company to consider plans to charge heavy downloaders more than casual downloaders, crippling not only pirates but stifling legitimate innovation in the process. That’s what a spokesperson told the AP, though no specific plans have been announced as yet. Even worse, this is DSL we’re talking about. We’re used to cable providers huffing and puffing about bandwidth hogs destroying the neighborhood’s capacity, but DSL? That’s a first (I think). Time to get a Sweden-based seedbox. → Read More
Usenet is in the news today, but not for something as trivial as downloading music or movies or anything, but for efforts against child pornography. New York’s attorney general, Andrew Cuomo, said today that ISPs Verizon, Sprint and Time Warner have agreed to help block newsgroups known to carry child pornography. Some 88 groups have been identified in the plan, which contained as many as 11,390 pornographic images. Additionally, the ISPs said they’ll kick in some $1.1 million to help stop the spread of the offending content. That’s the problem with something as unregulated as Usenet. While most of us will use it fairly innocently, maybe grab a missed TV episode or album or whatever, there are others who use it for that type of thing. And it’s people like that that will draw unwanted attention to the service. → Read More
How quickly would you reach Time Warner’s 40GB data cap? I’d be finished in like a week. No lie. By now you’re probably well aware of Time Warner’s scheme to charge you by the gigabyte. Arrington wrote a piece yesterday on TechCrunch saying how it would destroy innovation—how can YouTube et al. make money if no one has the bandwidth to watch videos, or whatever?—and all that. But I’m not really interested in whether or not YouTube or some band new social network for left-handed people succeeds or fails; I just download a lot of stuff. For example, yesterday I grabbed the 1080p rip of Cloverfield—horrendous, by the way—in a few hours off Usenet. That’s 9GB right there, or one-fourth of my would-be limit gone in a matter of a few hours. I’m grabbing Semi-Pro right now—that’s another 9GB. And There Will Be Blood should see an internal release in a few days (there’s already a terrible 720p scene rip). Throw in your occasional album and you can see where this is going. In well under one week, I would have shot past my monthly bandwidth limit. I say this just to illustrate how quickly that 40GB cap can be shattered. So to all those who would like to say, “Well, 40GB should be plenty.” Yeah, well, sometimes it isn’t. And $1 per gigabyte? Here, just take my bank account while you’re at it. Photo from Flickr → Read More
This is a little out of left field, but it could also be interesting. Time Warner Cable is planning on releasing a set-top box to its customers with a built-in cable modem to allow them to watch “Internt TV” on their televisions. The thing is, there’s no additional information on what this might be. Time Warner already has set-top cable boxes with full digital and HD capabilities, so what this additional device will give customers in addition is a mystery. And why they don’t just build the capability into future standard cable boxes is as well. We’re guessing it’ll be some sort of DRM-friendly BitTorrent streaming box, but until we get more information, we can only guess. → Read More
Comedy Central said last week that it will stream the comedy triumvirate of “The Daily Show,” “The Colbert Report,” and “South Park,” in their entirety, on Fancast.com. (Silly name, but whatever.) Beyond the “wow, neat” reaction, there’s something else going on here that we already hinted at a few days ago: what if people, seeing all there favorite shows move online—”The Daily Show” was required viewing in my college—refuse to pay for cable TV? Looking closer, you see that some cable companies may be hurt more than others. → Read More
Tough times for Los Angelenos wanting to watch HDTV. Apartment dwellers in the city are, apparently, fed up with Time Warner’s foot-dragging when it comes to expanding HD content, especially those who aren’t allowed to install a DirecTV or Dish Network satellite dish. Right now, Los Angeles ranks dead last in HD channel availability in the top five TV markets in the country. (LA has 16. Compare that to San Antonio with 38.) Charlotte, NC has more HD channels than it! I think Los Angelenos need to calm down a bit. Lots of those HD channels they’re missing out on are merely upconverted hotbeds of junk that you’d never want to watch anyway. Yes, it’s the principle of the matter, but they’re really not missing much. Aside from ESPN in HD and the occasional nature show, there’s not too much in the way of quality HD on cable. → Read More
The deal to combine Sprint Nextel’s and Clearwire’s fledgling WiMax businesses that was rumored last March is finally expected to go through. Comcast and Intel are supposed to put in $1 billion each; Time Warner Cable, $550 million; Google, $500 million; and regional cable provider Bright House Networks, $100 million. The new company, which will be valued at $12 $14.5 billion, will be run by Clearwire and take its name. As I said before, this is a disaster waiting to happen. Sprint and Clearwire need the deal to try to salvage the billions they’ve already sunk into their money-losing WiMax networks. But putting more cooks into the kitchen with different WiMax aspirations is not going to help. Google wants more wireless broadband alternatives for its planned mobile apps and advertising. Whereas the cable companies want a way to compete against mobile phone operators encroaching on their turf. As I wrote last March: WiMax is a promising technology and these are early days. But even an extra $3 billion won’t be enough. Building out a nationwide WiMax network could cost as much as $8 billion to $12 billion. And there could be more technical hiccups. I can see why Google might throw its hat into the ring here—anything to promote more broadband wireless networks. But Comcast and Time Warner Cable should stay away. The logic behind the investment seems to be that the cable companies could use the WiMax network to counter the moves by Verizon and AT&T into their turf (with TV service over phone lines). It is being suggested that the cable companies would be able to launch their own white-label mobile phone and high-speed Internet services over WiMax. Here’s where that logic breaks down: Verizon and AT&T have a huge head start and customer lock-in when it comes to cell phone service. WiMax mobile phones would take decades to chip away at that even if they do offer faster data speeds. Today, Clearwire is only offering at-home phone service, not mobile. As for broadband Internet and home phone services, Comcast and Time Warner already compete effectively against the phone companies today with their alternative services over cable. I hope that I’m wrong and that this new consortium will bring cheap WiMax to us all. Because the technology is very promising. Unfortunately, the business is not. → Read More
With Microsoft walking away from the Yahoo deal, there’s been a lot of talk about what it’s next best option would be. Going after AOL is an obvious choice. It has the ad inventory (aka pageviews) Microsoft needs, has its own collection of growing online advertising businesses, and has a very willing seller in parent Time Warner. The Times of London is reporting that Microsoft and AOL are in “preliminary talks” about an acquisition. And AOL isn’t exactly hitting on all cylinders right now, so it could be a much cheaper, cleaner purchase. Of course, Microsoft is still talking to everybody at this point, except maybe Yahoo. Whether it truly intends to set its sights on AOL is unclear because it needs to talk to AOL at the very least as a strategic ploy to try to thwart any possible deal between Yahoo and AOL (which has always been a possibility in the background). But at least Wall Street doesn’t seem to think that a deal is imminent. Yahoo’s shares are up 4 percent from yesterday to $25 a share right now, while Time Warner’s shares are pretty much flat at $16 after rising about 6 percent last week. Maybe Yahoo’s talks with Google are going better than Microsoft’s talks with AOL. (Disclosure: As a former employee of Time Warner, I own some shares in the company) → Read More
In an earnings call today Time Warner reported that it was planning to spin off its Cable holdings, “under the right circumstances.” No specifics were noted but Time Warner Cable is obviously bolted on to the weak AOL and TW media holdings and not quite the best fit for a media company in the first place, synergy be damned. TWC had a $771 million in profit last quarter, which is pretty nice. Let’s see who picks them up. Hopefully not ComCast. → Read More
For whatever nerdy reason I switched over to OpenDNS about a month ago. Actually, no. The reason was because I was tired of seeing that stupid Time Warner Road Runner every time I mistyped a URL or whatever. Well now OpenDNS refuses to load several pages, including CrunchGear and Facebook. What gives? I go to the main site and it says everything is up and running, yet I try to visit the offending Web site and I still get that same error message up there. Everyone I talk to online says the site is loading just fine for them. You all should know by now that I get annoyed very easily, so this latest issue is just another test of my patience. → Read More
San Francisco, CA
