Bread and Circuses: Time Warner Offers $30-$40 Basic Cable Services To Stem Cord-Cutting

Time Warner, one of America's largest cable TV service providers has been dinged by declining cable subscriptions thanks to the ongoing recession. In response, it is taking a step few would have thought necessary a few years ago: offering service so basic that it doesnt include sports channel ESPN.

The implication is that wage stagnation and unemployment is beginning to cut into consumer spending once thought to be immune to economic cycles. The challenge for entertainment providers - film, sports, TV and even online gaming - is how to package services in such a way that customers dont cut them off and then discover that life without them isnt so bad.

Providing a truly spartan level of service (by American standards) is a test to see what will keep the screen flickering. Looking at the offerings included, one senses that keeping the family, particularly the children, entertained is considered key to the lifeline proposition. Whether that will be sufficient given the opportunity now being handed to online providers will be put to the test for at least another year as the economy continues to flounder. JL

Noah Davis reports in Business Insider:

Time Warner Cable plans to increase its slate of low-cost programming packages, Deadline reports. The company tested a "TV Essentials" service, which doesn't include ESPN, TBS, TNT, and USA Network, in Ohio and New York.

"The numbers are still pretty small, but the results are sufficient enough that we're going to roll it out more broadly," COO Rob Marcus said at a Goldman Sachs conference on Wednesday. The services will be available on the East Coast initially and cost somewhere between $30 and $40 a month

The move is an effort to keep subscribers from cutting the cord. ESPN charges the highest fee of any cable channel and by removing it, TWC can pass along the savings to its customers.

It seems like a reactionary product to us -- it's hard to think there are too many cable subscribers who want to order the service without all those channels -- but perhaps there are people who just want the news and other basic channels.