Lazlow
join:2006-08-07
Saint Louis, MO
1 edit | reply to Matt
Re: Metered Billing Has Its Place
Matt
They really cannot justify it. Just look at TWC's 10K. The cost of Revenues for HSI was $146 million(page 60) but the Revenues generated by HSI was $4.159 Billion (page 89). That is a cost of less than 4%. Someplace in the other 96% they should be able to find the money to do the D3 upgrade without increasing rates one bit. Just look at Cablevision's statement last week, they expect that the D3 upgrade will cost them between $70-120 per customer. Considering CV only holds a 2.5% market share and TWC holds 9%, TWC should be able to get a better rate (cost/customer) just due to its size. |
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espaeth
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| said by Lazlow  :They really cannot justify it. Just look at TWC's 10K. The cost of Revenues for HSI was $146 million(page 60) but the Revenues generated by HSI was $4.159 Billion (page 89). The 10K balance sheet only shows direct costs (power, hardware, maintenance, vendor fees) and not indirect costs like operating the service vehicle fleet, developing tech training programs, paying employee salaries + benefits, call center operation costs, etc. |
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Matt
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| reply to Lazlow
said by Lazlow :Matt They really cannot justify it. I have looked at their 10k. I've linked to it several times.
Regardless, I am not opposed to a company making money. My thought is that usage based billing can be implemented without blatant disregard for your customer nor as a greedy, "consumer-be-damned" money grab. There is absolutely nothing wrong with Time Warner trying to increase earnings for their shareholders. There is if you try to do it in a dishonest way that is extremely anti-consumer.
I also don't feel that they should necessarily have to shoulder the burden of the entire DOCSIS 3.0 upgrade, especially considering they haven't raised rates in 10 years. I think a modest rate increase to cover the rollout of DOCSIS 3.0 and one which would allow them to keep their same profit margin would be beneficial to both sides.
This "usage based billing is good for consumers" crap is just that, crap. It's not good implemented the way Time Warner is attempting to implement it -- but it can be good if implemented properly. |
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Lazlow
join:2006-08-07
Saint Louis, MO
1 edit | Matt
If you really have looked at the 10K then you know that HSI costs have gone down(11% 2007/2008) over the last few years, while at the same time HSI revenues have gone up(12% 2007/2008). |
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Metatron2008
join:2008-09-02
Stockbridge, GA | reply to espaeth
You would need 200,000 employees being paid $50,000 each to get to even 1 billion. This indirect excuse is bullshit too. |
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delltechkid
join:2004-11-09
Hermitage, TN
 ·AT&T U-Verse
| reply to espaeth
All of the indirect costs you mention would exist even if they didn't provide HSI, as they must have these for TV. Sure there are a few extra people that they might of had to hire to cover the people who buy only internet, but I'm sure the majority of their HSI customers probably have cable TV as well. |
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jimbo2150
join:2004-05-10
Youngstown, OH
| reply to Matt
said by Matt :There is if you try to do it in a dishonest way that is extremely anti-consumer. This is exactly the kind of poor thinking of companies and those who support it today. ONLY being dishonest is anti-consumer? Falsifying data (which is what most are doing now) to support their own agenda is not dishonest? What about greed? $1/gb is not excessive greed? $0.20/text message is not excessive greed?
I am all for companies making money, but legitimate money. They can make a decent profit going somewhere in the middle or less without today's view that whatever business does is good for the consumer. Sorry, but I won't stand for this greed going on invading internet too. It is bad enough most places do not have competition, but taking more fees and gross tiering is getting out of line...
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espaeth
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| reply to delltechkid
said by delltechkid :All of the indirect costs you mention would exist even if they didn't provide HSI, as they must have these for TV. Sure there are a few extra people that they might of had to hire to cover the people who buy only internet, but I'm sure the majority of their HSI customers probably have cable TV as well. There are a number of dual-purpose employees, which is why it's difficult to tie them to a specific product. Still, if you needed 40 FTE hours/week to serve a function specific to video that same person isn't going to be able to have more time dedicated to HSI. As workload increases you need more people, even if some of their duties may be shared.
The HSI call center support staff are different from the video support staff. There are still many data-only field service techs, and without the HSI product they wouldn't need the CMTS layout they have (and associated employees who manage that), they wouldn't need the abuse staff to deal with DMCA complaints, they wouldn't have as much to manage in terms of ARIN IP netblock allocations, DNS assignments, mail server operations, DNS/DHCP server operations, etc.
No matter how you look at it, direct costs of a specific service alone are a poor way of relating the total cost of providing that service to revenue. |
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TKJunkMail
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3 edits | reply to jimbo2150
said by jimbo2150 : What about greed? $1/gb is not excessive greed? $0.20/text message is not excessive greed? I am all for companies making money, but legitimate money. And what exactly is greed? At what point does making a profit become greed? Well, that is strictly in the eye of the purchaser. For some people, greed is any company that makes a profit greater than 1%. And for a very few, greed is when a company makes any profit at all. So what is the % that fits your definition of greed? Is it a profit tied to the Cost of Capital? Is it a risk weighted return better than you could earn in a so-called safe investment like treasury bills? Is it some % above the rate of inflation?
So, what is your definition?
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Metatron2008
join:2008-09-02
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2 edits | I'd call greedy any broadband based company that is attempting to get more money for less service during a rough recession that will stiffle recovery
For all the talk of defending corporations TK, I'm surprised your defending this. If the economy doesn't recover, which steps like these may make it happen, their won't be any way for corporations to survive.
With all this said, I think greed is something that works outside of the free market. If you set your product to be any price, and the customer pays it, then good. Even if it's billions of dollars.
If they don't want to pay that, then you go down. Greed is destruction of free market IMO. |
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Lazlow
join:2006-08-07
Saint Louis, MO
| reply to TKJunkMail
Tk
Lets say, for the sake of argument, that Espaeth has a point and we move the total HSI revenue cost from $146 million to an even $1 Billion, which should cover ANY imagined costs. You are still making over four times as much as your costs. I do not hold it against any company to make an honest profit, but can you really say that anything over 100% profit is honest? ($4.159 - $1)/$1=316%(profit) |
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Metatron2008
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1 edit | said by Lazlow :Tk Lets say, for the sake of argument, that Espaeth has a point and we move the total HSI revenue cost from $146 million to an even $1 Billion, which should cover ANY imagined costs. You are still making over four times as much as your costs. I do not hold it against any company to make an honest profit, but can you really say that anything over 100% profit is honest? ($4.159 - $1)/$1=316%(profit) I don't see a problem with it, as long as customers keep paying it and WANTING to pay.
The TWC CEO must be a complete idiot, if you are making that much revenue, why piss off your customers?
Make a few network upgrades, add new speeds, make people pay more for the new speeds! Not piss them off, lose customers and business.
When did executives forget how to treat customers? You are supposed to kiss their ass, make them feel good, even if you aren't going to fill their needs... |
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Matt
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| reply to jimbo2150
said by jimbo2150 :said by Matt :There is if you try to do it in a dishonest way that is extremely anti-consumer. This is exactly the kind of poor thinking of companies and those who support it today. ONLY being dishonest is anti-consumer? Falsifying data (which is what most are doing now) to support their own agenda is not dishonest? What about greed? $1/gb is not excessive greed? $0.20/text message is not excessive greed? I think everything you mention would fall under the umbrella of "dishonest." I also mention several times in my posts that their plan penalizes their existing customers, I think that covers greed too.
Also, I'm not sure I like the implied insult that I am somehow pro-Time Warner or pro any corporation. I most definitely fall onto the pro-consumer side of things, but I'm not naive enough to fall so far to the pro-consumer side that I can't see and understand both sides. |
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Matt
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| reply to Lazlow
said by Lazlow :Tk Lets say, for the sake of argument, that Espaeth has a point and we move the total HSI revenue cost from $146 million to an even $1 Billion, which should cover ANY imagined costs. You are still making over four times as much as your costs. I do not hold it against any company to make an honest profit, but can you really say that anything over 100% profit is honest? ($4.159 - $1)/$1=316%(profit) Most companies that I have worked for would consider a profit that is 4 times documented costs as a pretty terrible margin. You simply can't expand with that kind of limited revenue flow and the subsequent cash reserves it would allow for.
I think you'd be surprised to know that most companies have profit margins that are 1000's of percentage points higher than the physical cost. |
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Lazlow
join:2006-08-07
Saint Louis, MO
| reply to Metatron2008
Lets flip this around a little bit. Lets compare the video numbers. Cost of Video Revenues $3.75Billion, Video Revenues $10.5 Billion. Now keeping Espaeth point in mind we will add the same $.85 Billion we did for HSI.
3.75+.85= 4.6
(10.5-4.6)/4.6=128%(profit)
So I think disparity in percent profit shows that it is about how much they can convince the user to pay versus what it costs. |
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Matt
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Jamestown, NC | Lazlow, can you please provide the link to where you are getting your numbers? Thanks. |
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Lazlow
join:2006-08-07
Saint Louis, MO
| It is from TWC's 10K, usually pages 60 and 89.
»investing.businessweek.com/resea···ype=10-K |
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jimbo2150
join:2004-05-10
Youngstown, OH
1 edit | reply to TKJunkMail
said by TKJunkMail :And what exactly is greed? Such an easy way to attempt to say nothing is greed. I can certainly ask the same question... what exactly is NOT greed? 800% pofit? 8000%?
So why is to SOOOOO bad to have a profit aimed at giving decent consumer products and make a decent return 5 years in vs. 0.5 years in? I don't know why so many companies seem to think that if they are not making an immediate return, it should not be done or it is the wrong way to go. When did instant gratification become part of business?
Edit: Also, what about COMPETITION?? They do everything to keep it out and in the Internet business there seems to be very little in most places in the U.S. (with exception to very large metro areas).
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S_engineer
join:2007-05-16
Chicago, IL
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| reply to Matt
I think theres a certain trap that people are falling into, and that's your view falls into one extreme or another. This is the same polarization that is paralyzing Washington DC.
Everyone has the right to a profit. And what one person sees as greed another sees as profit. But here you have a case where a company tries to make drastic detrimental changes to service of the consumer for no reason other than more profit. Then they insult the consumer by implying they're ignorant. On top of that, they then tell you your not worth upgrading. This is consumer rape!
There is a discussion that should have happened a long time ago. A sort of stress test for broadband providers. That is what happens when broadband reaches saturation point?
How would the already oversold services hold up to the expanding web with expanding content. This is nothing new, we were having these discussions years ago. So to me, the basic argument is that are we going to let the already profitable mega carriers extort more money from the consumer because they see an even more profitable business model.
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jimbo2150
join:2004-05-10
Youngstown, OH
| reply to Matt
said by Matt :I think you'd be surprised to know that most companies have profit margins that are 1000's of percentage points higher than the physical cost. And my entire point is... why? Why do they have to have an immediate return at the expense of their customers? What ever happen to long-term investments? And why is it seen as such a bad thing that a company not make a 1000+% profit margin when they could make a 100%. It may take a bit more time for a full return but it would most likely come.
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