The Time Warner Cable company (TWC) which is the second largest in the US has revealed that during the 4th quarter of 2008, it lost 119,000 customers. This is a massive increase in the loss for 2007 and much more than expected. And part of the blame is being pointed to online TV streams

Time Warners CEO Glenn Britt had warned that they were seeing a “significant slowdown” in subscribers. But even with Britt’s gloomy forecast, analysts had expected more in the region of nearer 50,000 reduction in subscriptions. The year closed with TWC having around 14.6 million customers using one of its services.

In light of the economic downturn, TWC revealed that it is planning a cut of 1,250 employees in a bid to cut costs, giving a loss of around 2.7% of its existing 46,000 employees.

We are seeing the first shockwaves from the recent economic downturn, but maybe not the last. It was expected that cable companies would be able to ride out the economic slump, but now all eyes are on Comcasts earnings report due on February 18th.

Time Warner added 175,000 revenue-generating units — combined voice, video and data subscribers — in the fourth quarter, one of its lowest tallies in years.

Citigroup cable analyst Jason Bazinet said in a note last week TWC’s RGU growth missed his estimates by 64% and “raised questions.”

Bazinet said that despite Britt’s earlier warning, “the sheer magnitude of the net add miss caught us by surprise. The actual net adds missed our estimates by a wide margin in every category: analog, digital, data and voice.”

Interestingly Britt has portioned part of the reason for the decline in subscribers on customers leaving cable and watching online TV free of charge.

He has been opposed to networks streaming content online for free whilst charging cable companies to broadcast the same content. He described it as a “self-defeating system”.

Britt further commented:- “In other words, free wins. If we don’t have a customer, then the programmers don’t get paid for the customer that we don’t have anymore.”

Plans for this year include adding to its existing 57 High Definition TV channels and concentrating on expanding its Hispanic channels.

I dont think that will be enough to stop the slide. Cable companies need to get in tune with the market and embrace internet tv. It is the future and those that refuse to adapt will die.

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1. Cable companies muscle in on internet TV
2. Internet TV killing Cable
3. Cable companies offering internet TV for free!
4. Cable TV Cannot Compete With Internet TV. So Its Joining It Instead.
5. Cable TV feeling the pich as the recession kicks in