US Cable giant focuses on broadband rather than TV

It's not just Virgin Media who see the future as broadband over traditional TV services. As my earlier post about Virgin's strategy has provoked what's best described as a "mixed" response (sorry, Square Eyes!) I thought the following would be of interest as it illustrated that the VM strategy is not unique. The full article can be found at Gigaom.com

The majority of [US cable company]Time Warner Cable’s subscribers and the bulk of its revenue still come from its traditional pay TV service, but that is changing — and fast. As a result, the company is betting on broadband to lead it into the future, due to wider adoption of high-speed data services at the same time TV subscribers are declining. In an interview with the Wall Street Journal Monday, CEO Glenn Britt talked up the company’s broadband business as the company’s “anchor service” of the future.“Clearly the relative importance of the video business has declined over time,” Mr. Britt said in an interview. “I think broadband clearly is becoming the anchor service.” Pay TV services still account for more than half of Time Warner Cable’s top-line revenue, according to the WSJ. But the gap between TV revenues and broadband revenues continues to narrow, as pay TV subscribers depart and new broadband users join. Time Warner Cable isn’t alone — the broader [US] pay TV industry lost a record number of subscribers in the second quarter, due in part to the down economy and weak housing formation. But there’s also the specter of cord cutting hovering over the industry, as a growing number of viewers turn to online video services for entertainment. It’s not just that broadband continues to make up a bigger portion of Time Warner Cable’s revenue and users, but the margins on broadband are much better than those for TV services.