Time Warner Cable's 'Usage-Based' Carrot

Time Warner Cable intro'd a plan this week that will see a usage-based pricing plan for broadband customers in parts of its Texas footprint. The announcement, done rather quietly on the company's official blog, is the first usage-based broadband plan offered by a major MSO in the States since the same Time Warner Cable scrapped its first attempt back in 2008.

As reported, TWC said the plan is only "optional" and that the company would "always" offer an unlimited package. Analysts say while the new(ish) strategy of offering light bandwidth users a chance to save money ($5/month) while heavy users pay more for 'unlimited' use (maximum overcharge fee of $25/month), the company is playing a 'carrot and the stick' game for public perception.

According to Bernstein Research's Craig Moffett, TWC's first run at usage-based billing in Texas and Upstate New York "was an unmitigated disaster." But, the analyst said, the company "learned from this debacle and has included several product features to avert a repeat performance."

Among the more consumer-friendly policies this time around is that the program remains optional (subs will not be forced to switch plans), and TWC has committed to keeping an unlimited option. Moffett notes the company's plans to provide consumers with a meter so they can track their usage, and those customers who do switch will have a two-month grace period to "adjust" to the new plan.

"Essentials Broadband appears to be structured in a way that will minimize cannibalization... perhaps (inducing) some cost-conscious customers to subscribe to broadband that otherwise would not," Moffett said. "Over time, however, we would expect the company to raise the price of its unlimited plans such that more and more consumers will opt to take this or a to-be-introduced intermediate metered product."

Further, he states, usage-based pricing plans "will be a significant catalyst for cable stocks, not because they would neuter the OTT threat, but instead because they would put the industry on a more stable footing for the long-term." •

Project Phenix: Content Storage Experiment

A group of big media names are collaborating on a new initiative called Project Phenix, an project aiming to give consumers an easier and faster way to organize, store and share their digital content. The program licenses copyrighted material on local and portable hard drives that can then be transferred to a users' device of choice.

Companies involved in Phenix include: 20th Century Fox, Warner Bros., Home Entertainment Group, SanDisk and Western Digital. The project is part of the newly formed Secure Content Storage Association (SCSA) and is backed by the UltraViolet standard.

Project Phenix enables customers to register digital content with UltraViolet, save it on local or cloud storage, then access the content on- or off-line via any SCSA-approved device including connected TVs, laptops and tablets, Blu-ray players, gaming consoles and mobile phones. The "optimized content" will be made available for purchase via digital download, digital files bundled with physical media, kiosks in retail stores, or other means of secure digital delivery, the group says.

"The vision for this new product is to store, play and back up in the cloud personal and professional content," said 20th Century President Mike Dunn. "The device renders content up to 10 times faster than over-the-top internet. We see Project Phenix as a key component of the emerging digital ecosystem." •

Etc.: Netflix Downgraded - Dolan's 'Running' Cablevision - Research: Gateways Overtake STBs?

Analyze This: Raymond James analyst Aaron Kessler downgraded Netflix from 'market perform' to 'underperform' saying 1) the company's costs for content are becoming too high too quickly, and 2) competition is mounting. "Netflix is potentially being impacted by the law of large numbers and rising competition," Kessler said. "Competitors... include Amazon, Hulu, HBO and Showtime, though we believe other players including Google, Apple, and the recently announced Redbox/Verizon joint venture and Comcast Xfinity Streampix, could become more competitive as well."

QRs: Cablevision posted its Q4 results Tuesday with consolidated net revenues increasing 7.3% during the period to $1.69B and operating income up 28.3% to $346.2M. Citi's Jason Bazinet said the company's basic net losses of 14K was "a modest miss" vs. Street expectations, while internet adds of 20K beat the firm's estimate of 17K. Voice net adds of 31K also beat estimates of 20K. Revenue per video sub came in at $154.10, beating estimates of $151.59. CVC CEO James Dolan said Tuesday that the company wouldn't replace former executives Tom Rutledge and/or John Bickham, and that Dolan himself would run the cable business. Cablevision stock was trading higher after posting its quarterly results, but finished the day down 9.65% after the conference call with Dolan.

Retrans: New Young Broadcasting's ABC affiliate in Green Bay, Wis. (WBAY) is notifying Time Warner Cable subscribers that they will lose access to the station if the two sides can't reach a new retrans agreement by tonight. The company's ABC affiliate in upstate New York (WTEN) ran notifications during the Academy Awards Sunday night warning TWC subs that they would lose access to that station as well if a new deal isn't reached.

Strategy: Speaking at a media conference this week, Verizon CFO Francis Shammo said the company's video streaming JV with Redbox will launch sometime in August. The exec didn't give details on the service's name, costs or what content would be made available. Shammo also said Verizon expects to close its $3.6B Spectrum Co. deal by mid-sumer.

WebTV: Google is building a YouTube Developer Program with platform companies to bring viewers to the branded channels on its premium channel expansion plan. The technology is yet another step toward evolving the site into a virtual broadcast network. MeidaPost has details.

Deals: Starz's contract with Netflix expired yesterday; Gizmodo says today's the last day for streaming the company's titles. Here's the pub's 20 Best Movies (being pulled from Netflix). In related news, the NYT says with Starz's departure, Netflix is now more focused on TV content than movies. So much for the 'flix' part...

$$$: Bloomberg says Sprint is going to sell upwards of $2B in notes to help pay for refinancing, network upgrades and "possible" funding for Clearwire. --- Will Richmond at VideoNuze says Mediamorph, a cloud-based service which tracks and measures digital assets across the multiplatform industries, has raised an additional $8M from Smedvig Capital and Motorola Mobility.

Research: iHS shipments of residential gateways will overtake STBs during the next three years as units are expected to triple between now and 2015. The firm says with cable and wireless carriers rolling out more wireless broadband services, global gateway shipments will grow to 4.2M this year (up from 345K in 2011), with total shipments to reach 12.6M by 2015. "While the set-top has been the heart of the home media environment... the residential gateway will be the next step up as it is able to link together an even wider range of devices," iHS analyst Jordan Selburn said. The firm says leading service providers will adopt the server/client model now seen in DIRECTV and Comcast whole-home DVR services.

Service: Comcast launched its Xfinity Home service in Washington State Tuesday offering home security protection, remote monitoring, and secure live video streaming from wireless cameras. The service also comes with the Xfinity Home app, which is available for free on iTunes.

Tech: Interested in the iPad 3? Reports say Apple will unveil the new tablet on March 7. Get details here. --- Outdoor weatherproof TVs? Yup. SunBright TV showed them at CES. Check 'em out.

Mobile: Viacom's MTV launched a mobile, social TV app called Under The Thumb. Developed by Viacom International Media Networks and AKQA in Viacom’s European offices, the free service is available for Android and iOS devices. The company said it will also introduce paid sections with premium content.

Online: The Street says users of social networks are "finally starting" to realize that what they post online can come back to haunt them. Citing a new study from Pew, the pub says Facebook users are de-friending people from their network at a faster clip than ever before. The study says 63% of social network users are culling friends (compared to 56% in 2009) and 58% are restricting their profiles with heightened security efforts.

Programming: Verizon added Spanish-language movie channel Cine Estelar to its FiOS TV lineup. --- 3net, the joint venture 24/7 3D network from Sony, Discovery and IMAX, will air "Fields of Valor: The Civil War" - the first native 3D war documentary - on Saturday, March 24 (8PM ET).

Retail: WSJ has details about a plan Wal-Mart is working on that would create an in-store service for customers to register their DVDs with UltraViolet. Interesting, if not pointless.

Over, Up & Under: Rogers added Tribeca Film titles to the Rogers On Demand and Rogers Anyplace TV movie lineup. --- France's CanalSat is dropping three NBC Universal channels from its lineup on March 1: E! Entertainment, 13eme Rue HD, and SyFy HD after the two sides failed to reach a new carriage agreement. --- SkyItalia is prepping a new software release to offer subscribers access to IP-delivered video content.

Events: The Hollywood Radio and Television Society is hosting its 'Cable Programming Summit' on Wednesday, March 7. The event will feature David Janollari, Head of Programming, MTV; Kate Juergens, Programming EVP, ABC Family; Joel Stillerman, Original Programming EVP, AMC; Michael Wright, Programming EVP, TNT/TBS/TCM and Carmi Zlotnik, Managing Director, Starz Media. Information and registration, here. --- Standard & Poor's is hosting its Media, Entertainment and Cable Industry Breakfast on March 7. Guest speakers and more information can be found here.

People: LightSquared said CEO Sanjiv Ahuja has resigned from his position and the company is looking for his replacement. Doug Smith, current chief network officer, and Marc Montagner, current CFO, will serve as interim co-COOs. --- Former TiVo senior exec Todd Juenger has joined the crew at Bernstein Research for market analysis of the U.S. media sector.

Misc.: CTAM issued its 2011 Report Card this week saying its CableMover program generated 1.8M leads for cable companies from customers that moved to new addresses last year; secured 1B 'earned media impressions' selling cable services; and increased the amount of money spent by new Movies On Demand users to an average of $7.71 per week. More details about CTAM's 2011 can be found here.

Wow!: Music from Fox's hit show "Glee" is #8 in the top-10 selling digital artists of all time. SoundScan says consumers have downloaded more than 32M songs from the show, bringing the program's total of 'Hot 100' hits to 193... surpassing Elvis, The Beatles and James Brown. The apocalypse can't come fast enough.

--- Catch today's media market news in The Evening BRIDGE. •