Time Warner Cable (TWC:US) Inc. Chief Executive Officer Glenn Britt threatened to drop networks with low ratings when their programming contracts expire to combat rising pay-television costs.
Distribution on Time Warner Cable, the second-largest U.S. cable company, “is not a birthright,” Britt said at a conference today in New York hosted by UBS AG.
Time Warner Cable’s programming costs since 2008 have increased about 30 percent, leading to a 15 percent increase in cable-TV prices, Britt said. The trends are unsustainable as prices rise too quickly for many people to afford, he said.
“If you have a network that is getting hash-mark ratings and no real sign it’s going to get any better, we’re going to have a different kind of conversation that we might have had five, six or 10 years ago,” Britt said.
Dropping low-rated networks can be a tricky decision because their owners often bundle them with higher-rated channels, forcing U.S. cable companies to pay for all of them or lose access to networks they would otherwise want to keep.
Britt declined to say how New York-based Time Warner Cable would deal with the dilemma of potentially losing popular channels.
“We’re going to have to do things where we can,” Britt said in an interview after the conference. “Stay tuned.”
Time Warner Cable gained (TWC:US) 0.7 percent to $95.53 at 10:47 a.m. in New York. The shares had climbed 49 percent this year through yesterday.
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