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Jun 5 - The Days of Getting a Cheaper Cable Bill by Threatening to Leave May Be Over


 


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 4 months ago '11        #1
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Sin  topics gone triple plat - Number 1 spot x2
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Jun 5 - The Days of Getting a Cheaper Cable Bill by Threatening to Leave May Be Over
 

 
When Joshua May learned recently that his TV bill would increase by about $40 a month, he called Charter Communications Inc., expecting his cable company to negotiate a better price.

His previous provider, Time Warner Cable, had extended a cheap promotional rate several times so May wouldn’t cancel. But that was before Charter took over the company. When he called this time, the rep wouldn’t budge on the 29% jump for his bundled TV, internet and phone service. So May cut the cord.

“I expected they’d at least offer free HBO or Showtime,” said May, 34, who lives in Springfield, Ohio, and processes loans for a financial institution. “They did nothing.”

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May’s experience reflects a growing trend, as pay-TV companies pull back discounts they’ve used for years to retain video subscribers. With internet service growing faster and more profitable, subscribers like May are becoming expendable.

“I’m sort of indifferent,” Charter Chief Executive Officer Tom Rutledge said at an investor conference last month. Two years ago, he said the second-largest U.S. cable company planned to add video customers. Now, they’re not even “a material driver” of Charter’s business, he said.

Over the past few years, pay-TV stocks have suffered wicked swings as investors reacted to growing subscriber losses. But they’ve recovered as the companies shift their focus to lucrative broadband services. Comcast Corp., the largest U.S. cable provider, is up 22% this year and Charter is up 36% to a 21-month high, outpacing the 12% gain for the S&P 500. That’s despite accelerating pay-TV subscriber losses at both companies last quarter.

‘It’s Been Fun’

“It used to be when customers would call and said, ‘I’m thinking of cutting the cord,’ they’d throw all sort of promotions to keep them from leaving,” said Craig Moffett, an industry analyst at MoffettNathanson LLC. “Now they’re saying, ‘Goodbye, it’s been fun, enjoy the broadband subscription.’”

Cable One Inc., a smaller cable company with about 305,000 residential video customers, even helps cord cutters choose between online alternatives like YouTube TV or Hulu’s live TV service, according to Moffett.

Executives at big cable companies say they have no plans to stop selling TV altogether, because offering more services along with internet access gives customers more reasons to stay. At the conference, Rutledge said Charter wants to create “relationships” with customers and “to the extent that video helps drive that or helps us market that, it’s a valuable a*set.”

But cable executives are now focused on what they call “profitable” or “high-quality” video subscribers and less interested in cutting deals. At another investor conference in May, Comcast Chief Financial Officer Mike Cavanagh said he wants a subscriber who “really values video and our bundle despite the increases in prices,” and has “the wallet for a fuller video experience.”

Culling Customers

At the same conference, AT&T Inc. CEO Randall Stephenson said his company, which owns the satellite provider DirecTV, is “cleaning up the customer base” by letting go of subscribers who insist on keeping promotional prices when their contracts expire.

Pay-TV providers are making up for the lost revenue by charging everyone more. When subscribers cancel cable TV, they no longer get a discount for bundling TV with internet. When Optimum customers around the New York area cancel TV service, they also typically upgrade to faster -- more expensive -- internet, Altice USA CEO Dexter Goei said last month.

As customers drop pay TV, cable companies will actually see their profit margins widen, Moffett said. That’s because much of their pay-TV revenue goes right to channel owners, like Walt Disney Co. and its ESPN network, in the form of subscriber fees. Fueled by expensive sports rights, those fees are even rising faster than cable TV bills, hurting profits for companies like DirecTV and Comcast. Selling high-speed internet is far more profitable.

Profits Grow

Last quarter, Charter lost 26% more residential TV subscribers than a year ago. But it also added 19% more internet subscribers, fueling a 4.2% gain in adjusted earnings.

Charter appears to be courting internet-only subscribers through recent price changes, according to BTIG LLC analyst Rich Greenfield. Last year, the company raised the price of broadband bundled with other services by $5 a month, he said, while increasing internet-only service by $1. Internet without TV still costs a few dollars more, but Charter is closing the gap, he said.

“It appears as if you are purposefully pushing subscribers toward abandoning your video service,” Greenfield said in a note last fall addressing Charter executives.

‘Turkish Bazaar’

Since taking over Time Warner Cable in 2016, Rutledge has tried to end its promotional culture. He described Time Warner Cable as a “Turkish bazaar,” where customers called in and bargained with customer service reps. At one point, the company offered 90,000 different prices designed to keep cable-TV subscribers from cutting the cord.

When May called about his bill, Charter did offer him one alternative: a $15-a-month online-TV service called Spectrum TV Essentials. The new streaming service, which debuted in February, has more than 60 channels from programmers like Viacom Inc., Discovery Inc. and AMC Networks Inc.

May canceled after a few months because he missed the sports channels. Now, his Spectrum internet service costs $70 a month, and he gets Sling TV from Dish Network Corp. for another $40.

Since Charter acquired Time Warner Cable, efforts by customers to negotiate lower rates have gotten “much tougher,” according to Phillip Dampier, founder of the blog “Stop The Cap.”

“Do not be surprised if they shrug their shoulders and agree to your request to cancel your account on the spot,” Dampier said on his blog last month. “Spectrum, like many cable companies, has gotten pickier about who they offer promotions to, and are willing to say goodbye to barely profitable customers, especially those only subscribed to cable TV.”

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74 comments
 

 4 months ago '09        #2
messy marv stan  topics gone triple plat - Number 1 spot x6
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for the additional extortion internet victims are charged the cable mafia could easily triple the speeds and get rid of the phony data caps


the cable mafia would still make more than enough money if it slashed prices 75% including all hidden extortion charges
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 4 months ago '19        #3
Gold Face  11 heat pts11
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I was gonna @ cause he always talks sh*t about cable companies

But he’s already in here

Keep the good f*ght roaring good sir

+12   

 4 months ago '11        #4
Sin  topics gone triple plat - Number 1 spot x2 OP
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 Gold Face said
I was gonna @ cause he always talks sh*t about cable companies

But he’s already in here

Keep the good f*ght roaring good sir

I want to hate them but i own Comcast and AT&T stock its a love hate relationship
+17   

 4 months ago '19        #5
Gold Face  11 heat pts11
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 Sin said
I want to hate them but i own Comcast and AT&T stock its a love hate relationship



sh*t I’d invest in heroin if they made it a tradeable commodity

Interesting plays by you tho. Don’t know why I never kept an eye on Comcast
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 4 months ago '10        #6
ajayones  1 heat pts1
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you ever tried getting a older person to learn a firestick?

they rather complain and pay that cable bill
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 4 months ago '19        #7
Bucks414  72 heat pts72
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cable free since 2015

+11   

 4 months ago '17        #8
Green Ranger  17 heat pts17
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n*ggas still got cable?

I been cut the cord. Too many options online.
+16   

 4 months ago '11        #9
Sin  topics gone triple plat - Number 1 spot x2 OP
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 Gold Face said



sh*t I’d invest in heroin if they made it a tradeable commodity

Interesting plays by you tho. Don’t know why I never kept an eye on Comcast
CVS I down 50% since its all time high of 108 in 2016 around the time they bought Aetna healthcare and now they announced this



I started buying shares
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 4 months ago '19        #10
Gold Face  11 heat pts11
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 Sin said
CVS I down 50% since its all time high of 108 in 2016 around the time they bought Aetna healthcare and now they announced this



I started buying shares
I’ve seen Walgreens put to many cvs out of business round here but 50% drop and a new launch. Sounds like a play.

Watchin AMC crumble today might grab some shares. Been on the sidelines last couple weeks launchin new store. Hope to b back with some plays next week
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 4 months ago '11        #11
Sin  topics gone triple plat - Number 1 spot x2 OP
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 ajayones said
you ever tried getting a older person to learn a firestick?

they rather complain and pay that cable bill
I gave my aunt my old roku and she still has cable but all she does is complain her HBO won’t work on roku but does on cable

I tried explaining she needs to login her reply is i don’t have to login the cable box
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 4 months ago '11        #12
SomeOnesoN  230 heat pts230
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 Sin said
I want to hate them but i own Comcast and AT&T stock its a love hate relationship
Im pretty sure you heard this before, but the best investments to make would be on the Seven Deadly Sins: Pride, Greed, Lust, Envy, Gluttony, and Wrath.


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 4 months ago '11        #13
Sin  topics gone triple plat - Number 1 spot x2 OP
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 Gold Face said
I’ve seen Walgreens put to many cvs out of business round here but 50% drop and a new launch. Sounds like a play.

Watchin AMC crumble today might grab some shares. Been on the sidelines last couple weeks launchin new store. Hope to b back with some plays next week
Cvs is transitioning to a health care company and opening clinics and pharmacies moving away from selling chips and batteries and other consumer products

Walgreens will have to compete with amazon and Walmart in the long run while cvs has its own lane
+13   

 4 months ago '14        #14
freezetag 
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Internet bills gonna reach 140+ watch
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 4 months ago '06        #15
"SS"  32 heat pts32
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Free internet and firesticks on all my TV'S fu*k the cable mafia
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 4 months ago '19        #16
Gold Face  11 heat pts11
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 Sin said
Cvs is transitioning to a health care company and opening clinics and pharmacies moving away from selling chips and batteries and other consumer products

Walgreens will have to compete with amazon and Walmart in the long run while cvs has its own lane
+1   

 4 months ago '11        #17
Sin  topics gone triple plat - Number 1 spot x2 OP
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 SomeOnesoN said
Im pretty sure you heard this before, but the best investments to make would be on the Seven Deadly Sins: Pride, Greed, Lust, Envy, Gluttony, and Wrath.


I do have my limits, Genie energy is an Israeli oil and gas company i really liked and could have bought at $8 a share but morally i hate what they do to Palestine so i chose not to and now it’s currently 10% since then

fu*king morals
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 4 months ago '07        #18
joshdogg26  196 heat pts196
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this is true even for internet if you're a cord cutter. I had gigabit for $50 and it went up to $80. they told me even the new customer rate for 300 mbps wouldn't get me there. we need more competition. fiber please come through and crush the buildings
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 4 months ago '14        #19
NineDime  1 heat pts1
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 freezetag said
Internet bills gonna reach 140+ watch
data caps for everyone

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 4 months ago '11        #20
Sin  topics gone triple plat - Number 1 spot x2 OP
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 Gold Face said
I’m looking at 5 years down the road not a quarter or two
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 4 months ago '15        #21
Lito Guapalot  40 heat pts40
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 Gold Face said
I’ve seen Walgreens put to many cvs out of business round here but 50% drop and a new launch. Sounds like a play.

Watchin AMC crumble today might grab some shares. Been on the sidelines last couple weeks launchin new store. Hope to b back with some plays next week

+12   

 4 months ago '14        #22
freezetag 
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 NineDime said
data caps for everyone

Sick sh*t man.
+4   

 4 months ago '19        #23
Gold Face  11 heat pts11
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 Sin said
I’m looking at 5 years down the road not a quarter or two
They shorting the news...with no due diligence I like the idea of a big company getting into strictly healthcare and scripts. I applaud the creativity and the risk even tho it may be out of desperation.

I don’t like to play quarters or earnings and I’m not a day trader either

I agree with the buy and hold strategy. I compare myself to a person waiting in line for concert tickets for days at a time

I may be early but I won’t be late

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 4 months ago '16        #24
ishVicious  1 heat pts1
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 ajayones said
you ever tried getting a older person to learn a firestick?

they rather complain and pay that cable bill
Currently work for a cable company and that is facts.. let your company fu*k around and update the remote with ONE new button... brah all hell breaks loose like the remote design was changed drastically.. it’s a pain but funny as sh*t lol
+5   

 4 months ago '11        #25
QB Eagles  304 heat pts304
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 SomeOnesoN said
Im pretty sure you heard this before, but the best investments to make would be on the Seven Deadly Sins: Pride, Greed, Lust, Envy, Gluttony, and Wrath.


LinedIn is not greed, lmao. LinedIn doesn't offer anything. Everything else on the diagram is on point though.


Last edited by QB Eagles; 06-05-2019 at 05:03 PM..
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