Time Warner Cable to deploy 'souped up DVR' in second half of 2013

Time Warner Cable (NYSE: TWC) will deploy a "souped up DVR" containing six tuners and 1 terabyte of storage space during the second half of 2013, COO Rob Marcus said Thursday.

The nation's second largest cable MSO, which reported that it lost 129,000 video subscribers during the fourth quarter, will use the DVR to compete against advanced products such as DirecTV's (Nasdaq: DTV) Genie and Dish Network's (Nasdaq: DISH) Hopper DVR. Time Warner Cable's DVR, also known as a video gateway, will be able to convert cable channels into IP video for delivery to multiple set-tops, connected TVs and other IP devices such as tablet computers in subscriber homes, Marcus said. The MSO first disclosed plans to deploy the gateway devices last summer.

Marcus said the new DVRs will run a cloud-based interactive program guide, which he described as a "hosted navigation product." The new guide will offer improved search functionality and box art for TV shows and movies, Marcus said. "The experience will be markedly better than set-top based" program guides, he added.

While Time Warner Cable lost 129,000 video subscribers during the fourth quarter, it picked up 75,000 high-speed Internet and 34,000 voice customers. Marcus said company will step up its efforts to retain subscribers who cancel service after promotional discounts expire. "We've been losing too many customers when their promotions expire. To fix this issue, we will adopt a consistent approach to managing post-promotion pricing," he added.

Also worth noting from Time Warner Cable's earnings call Thursday:

  • Marcus said Time Warner Cable is looking to add "out of home" programming to its TWC TV app for Apple iOS and Android devices. The apps, which currently only allow subscribers to view live programming with their own homes, generated more than 750,000 unique users in December, Marcus said. The app was also used more than 4 million times in December, he added.
  • Time Warner Cable will double the number of WiFi hotspots that can be accessed by its cable modem customers in 2013, Marcus said. The MSO plans to focus the WiFi expansion on New York City, where it faces stiff competition from Verizon's (NYSE: VZ) FiOS TV and Internet service.
  • CEO Glenn Britt said Time Warner Cable's programming costs per subscriber have increased 32 percent in the last four years, while the consumer price index has risen by 9 percent during the same period. "We've effectively raised pricing a little faster than inflation, but half has fast has programming costs have risen," Britt added.
  • Marcus said the impact of Google's Fiber TV rollout in the Kansas City area has been "de minimis," noting that Google is offering the product to few subscribers. "Most of the action is going to happen towards the back half of this year," Marcus added.
  • Britt said Time Warner Cable will increase its broadband speeds to meet demands from subscribers, but noted that there aren't a lot of applications that require download speeds of 1 gigabit per second, which Google is offering in Kansas City. "I am sure at some time in the future we'll have 1 Gig, maybe 2 Gigs," Britt added.
  • Time Warner Cable reported $513 million ($1.68 per share) in net income in the fourth quarter, down from $564 million ($1.75 per share) it reported for the fourth quarter of 2011. Revenue increased by 9.9 percent to $5.5 billion.

For more:
- see the release

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