Before we get into the news of Timer Warner’s potential investment in Hulu I want you to ponder this…
If you’ve ever heard someone joke about how much they hate their Time Warner Cable subscription it’s because TWC is quantifiably the worst at what it does.
Last year, the American Customer Satisfaction Index (ACSI) ranked TWC dead last in not just all cable companies but of all companies in the entire Index. Sadly, this was familiar territory for Time Warner. It’s cable division ranked second to last in 2014, and in that same year its internet division received the worst overall ACSI score from any company.
In announcing the 2015 rankings, the ACSI Chairman and founder told Consumerist.com, “There was a time when pay TV could get away with discontented users without being penalized by revenue losses from defecting customers, but those days are over. Today people have more alternatives than ever before. Consumer abandonment of pay TV is shaking up the industry and lower satisfaction could mean even more cord cutting by subscribers ahead.”
How is TWC going to redeem itself? Oh, the usual – merge with another company (specifically Charter Communications, pending regulatory approval), threaten to buy out and ruin its competition (kind of).
The problem: Fed up with years of poor service, TWC customers are leaving, either running to rival cable companies or cutting the cord altogether and joining Netflix and Hulu.
The partial solution: Why not just buy a stake in Hulu and ruin it from the inside?
Time Warner believes that the presence of full, current seasons on Hulu—or anywhere else outside the bounds of pay-TV—is harmful to its owners because it contributes to people dropping their pay-TV subscriptions, or “cutting the cord.”
In the discussions about taking a 25% equity stake in Hulu, Time Warner has told the site’s owners that it ultimately wants episodes from current seasons off the service, at least in their existing form, although that is not a condition for its investment, according to the people familiar with the discussions.
Hulu is currently co-owned by Disney, 21st Century Fox and Comcast, and adding Time Warner to that group should ostensibly provide an interesting new wrinkle. As SlashFilm pointed out, this could hypothetically mean that “[Time Warner’s] network HBO would start putting content on Hulu, and Warner Bros. Pictures and Television would start adding more of their movies and TV shows to the streaming service.” However, Time Warner really just wants a seat at the table to potentially take away Hulu’s primary advertising hook, which is that it’s the place to go to see new episodes the day after they air, covering all of the current shows on ABC, NBC, Fox and The CW.
To be fair, TWC isn’t losing nearly as many subscribers as it used to meaning the cord-cutting argument might be overblown. You can also understand the developing perception among the various media conglomerates controlling the Hollywood studios that their deals with Hulu and Netflix have amounted to cutting off their own nose to spite their face. That’s why all of The CW shows, co-owned by Time Warner, might soon leave Netflix and Hulu and transfer over to a CW-specific streaming service, accessible for a small monthly fee. It’s also why the BBC just yanked Doctor Who off of any streaming service in America.
That much I get. Something about this story, though, seems so much more insidious. It’s important to remember that WSJ mentioned that Time Warner’s preference to fundamentally alter Hulu’s business model will not actually be something it tries to force through as a conditional element of its proposed purchase of a 25% interest in the company. However, this feels like a move being made by a highly detested company which is desperate to cling to old ways and protect its graying business model. Pull your shows from the service after certain contracts expire, sure, but buying your way into it to tear it down from the inside? Dick move, Time Warner.
Of course, Hulu doesn’t have to accept TW’s investment offer nor does this have to mean that anything will actually change since the other co-owners would theoretically have a say in things. Plus, we are ultimately stressing over thoroughly first-world problems, but, still, dick move, Time Warner.