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Time Warner Cable Threatens to Drop Channels

Rising programming fees are driving subscription price jumps


With subscription rates for cable TV rising steadily amid continued consumer gripes, Time Warner Cable‘s (NYSE:TWC) CEO is talking tough.

Glenn Britt told attendees at a UBS (NYSE:UBS) conference in New York that his cable system will not renew the contracts of low-rated, high-cost cable channels, saying distribution on TWC was “not a birthright,” Bloomberg noted.

TVs: Great to Watch, Terrible to Invest In
TVs: Great to Watch, Terrible to Invest In

Britt did not indicate how TWC would deal with the bundling of low-rated channels with high-rated ones, a practice that ensures subscription TV distributors have to take an entire slate of channels to get the most popular ones.

Squabbling between subscription TV service providers and cable channel operators over rising fees is nothing new. Earlier this year Dish Network (NASDAQ:DISH) dropped AMC Network’s (NASDAQ:AMCX) over AMC’s fee demands and other issues.

In April, DirectTV (NASDAQ:DTV) temporarily dropped local Tribune Broadcasting channels from its service over a fee dispute.

TWC says programming fees have risen 30% in the last four years, prompting it to boost subscription prices by 15%. Britt noted that the escalating costs made it necessary for the company to take action or risk losing subscribers who can’t afford additional increases.

Shares of TWC slipped fractionally in Tuesday morning trading.

Article printed from InvestorPlace Media,

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