Commentary

Time Warner: We Still Like Metered Billing

Last month, when Time Warner backed off an unpopular plan to roll out pay-per-byte billing to four additional cities, it was pretty clear that the company hoped the retreat would be temporary.

Today, CEO Glenn Britt confirmed that the cable giant continues to favor metered billing. "I still think some notion of, you-use-less-you-pay-less, use-more-you-pay-more, will ultimately be what happens, but we'll see," he said this morning at a Sanford Bernstein investor conference,

Britt also continued to frame the controversy as a public relations failure. "Clearly we did not handle the public relations very well and had a bit of a debacle to be honest."

The company said much the same thing last month, when it announced it was delaying the roll-out. "While we continue to believe that consumption based billing may be the best pricing plan for consumers, we want to do everything we can to inform our customers of our plans and have the benefit of their views as part of our testing process," Britt said at the time.

It's hard to see what kind of spin doctoring would have made consumers embrace the plan. People tend to know when a company tries to charge them more for less, and public relations campaigns aren't likely to convince people otherwise.

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2 comments about "Time Warner: We Still Like Metered Billing".
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  1. Lynne Tierney from Nightly Business Report, May 29, 2009 at 6:35 p.m.

    Absent any specifics, you assume that customers will be charged more and get less. That's exactly why this is a public relations problem.

  2. The Librarian from Retired, May 30, 2009 at 7:51 a.m.

    The Public Relations nightmare for Time Warner is really simple on its face. It was an attempt by Time Warner to make up for lost revenue because more and more people are dropping their television subscriptions. People are dropping the cable tv portion because they can watch their favorite movies, shows and documentaries via the internet. People are not having to pay up to $6 to watch a movie when they can download it for less up to free.

    Right now with Time Warner, if you want to watch a movie that just went to DVD you pay $4.95 for what they call movies on demand. You could download it for nothing as part of a subscription service but it is 4 gig of download. Under Time Warner's plan they would charge $1 or more for each gig you go over their set limit. So you download the same 4 gig movie - Time Warner would charge you $4 or more because you went that much over your limit. Hmmmm, put the spin on that will you?

    Also they are not paying for a slew of cable channels they never watch. Some pay over a hundred dollars a month because the channel they want requires a package of other channels. My wife likes HGTV but it doesn't come with the $19.95 basic backage. She can watch it online for free and when she wants. Why not let people select metered or selective channel lineups - I don't watch the Golf channel so let me substitute Turner Classic Movies? To get the channels you want you have to get 15 you don't and you pay for that.

    The way their metered plan would have worked is anyone that downloaded up say three movies would have been over the limit. The other problem is that, like here in San Antonio, Time Warner has an exclusivity contract with the city. If you live in certain areas you can only have Time Warner even though there are two other cable companies. This results in no real viable competition in matters of pricing or availability. Then there is the problem of speed. We have the lowest speed rating of most countries in the world and we already pay more for this privilege. I have their fastest connection offered by Time Warnernthat is supposed to deliver 15 Mbps download speed. The best I have ever received is a little over 9Mbps. Their answers - we say up to ? MBPS and it depends on how many in your neighborhood are logged on and using the net. Why don't they have that problem in European countries?

    So let's sum up the nightmare for their PR people, no choice in going to another cable high speed internet provider because of exclusivity contracts with cities where Time Warner bars other cable companies from offering services in those certain areas - wasn't Ma Bell broken up over this sort of thing, not delivering on the speeds they are advertising now - yet to get 15 Mbps here even at 4 AM in the morning , up to $6 for movie on demand versus over $4 for a download movie - sounds like a backdoor movie on demand charge to me, and the fact that they are making millions per quarter in profits with all this pricing and extra protection from competition.

    Because of the internet, the very thing they want to charge a use based fee on, consumers are not as dumb or gullible as we used to be. We can go online and shop for the best price BUT the problem in this case is that you can't get maybe a lower price from a company offering the exact same offerings because they are barred from giving it to you by exclusivity contract.

    Congress was ready to move on this issue through changes in the law and that is when Time Warner backed down. The problem was not consumers but lobbying - they didn't give enough to Congress to overcome the wants of consumers. Consumers will always wind up paying more for less as someone has to pay back companies for all the lobbying cost. Time Warner - you want an easier PR situation - how about metered billinb on television - you don't watch a channel you get a credit of say $1 a month for that channel? How about delivering 15 Mbps internet speeds instead of up to 15Mbps? We pay for 15 Mbps but get 8 or 6 or 4 Mbps which are DSL speeds.

    You are already charging more for less. Why should we be charged even more for this failure based solely on your promise that it will free up more broadband to increase speeds. The way most business owners, including the the wife and I, is take some of the profits and reinvest it in more equipment and product to give" the customer what they want and already pay for when they buy from us." Now there is a novel idea for a company - to deliver a quality product and what you say it is supposed to be. You would not buy a car that the manufacturer say is a big 8 cylinder car with all kinds of power but after you get it you find that it is power up to that of an 8 cylinder but is closer to a 4 cylinder. <P>

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