Time Warner Cable Earnings Again Beat Estimates > Most profitable quarter ever... what?!

Most profitable quarter ever... what?!

reply to espaeth
Yeah, because 7 cents a dollar on a billion dollar industry isn't much profit.

reply to espaeth

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reply to texans20
well at least the Apple/Mac line of stuff is of Quality and not crap like Time Warner gives out, i recall paying them over $100/mo for a year for cable and internet, and my service going out several times a week (i had quad rg-6 throughout the house so it was not my wiring) and fuzzy/missing channels, roadrunner dropouts, etc...

so when you recieve the quality of service that you do from someone like Time Warner, then yeah, you will complain about the profit being made.

reply to espaeth
Profit margins vary widely among different industries.

The grocery business sees just 2 or 3 cents profit on most items you buy, while many retailers have near 100% or more mark up.

With marketing tricks and varied products and services it is difficult to speculate a companies success on profit margin alone.

My 2 cents worth.

reply to espaeth
You're missing the point. I think intentionally. Nobody's dictating how much profit Time Warner Cable should make. That's a straw man.

Time Warner Cable previously indicated that flat rate broadband pricing wasn't sustainable financially. Here we have repeated evidence that this isn't the case, all while Time Warner Cable stock has risen 40% this year largely on the faith of investors who like the financials. So....

Bad analogy... oil is a limited quantity that WILL run out at some point... backbone / last-mile capacity is not. Unlike oil, capacity on a broadband network (backbone or last mile) can be upgraded by denser DWDM (if it's a backbone issue) along with upgraded core routers and line cards. On the last mile, capacity can be (with somewhat higher expense / difficulty) be upgraded through removal of analog channels, node splits, edge bandwidth upgrades, DOCSIS 3.0, channel bonding, and further compression of HD channels using more efficient codecs. Ultimately, TW also has the option of slowly switching to an active FTTH network. They actually have quite an advantage over telcos, since a lion's share of their network is ALREADY fiber, all the way up to the CMTS. Case in point: Unlike oil, which we KNOW is a FINITE resource, broadband capacity, at least for the next few decades, is DEFINITELY not. While TW is whining about these upgrades and attempting to justify completely absurd usage-based plans (with over 10x bandwidth cost markup), they don't seem to realize that these upgrades are a fact of life in the telecom industry. You simply cannot survive by turning over all of your profits to investors and executives, leaving little for capex.
Now, it's not as if I don't support metered billing. However, TW's twisted version of it it a con act, pure and simple. IMO, the future either lies in uncapped (bandwidth-wise) and metered-by-usage, or the current unlimited and rate-limited system. Also, for metered billing to succeed, TW needs to realize that customers simply won't accept wildly marked-up overages per-GB. Many would say that these markups cover the supposed cost of the last-mile. However, it is my impression that that's the point of the initial per-month fixed cost. Just like electrical companies charge a fixed rate just for the line and overall maintenance, TWC ought to charge around $30 - $ 40 for the line itself, along with say, 50 - 75 GB of included data usage, with an overage of around $0.10 per GB. They could also make a killing selling extra usage in bulk. Obviously, TW executives are absolutely terrified of taking this fair route, since it would actually result in a DROP in profits. Solution? Make insanely low caps and outrageous overages, and subsequently go around "educating the consumer". Brilliant...
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Physics: Will you break the laws of physics, or will the laws of physics break you?
If physicists stand on each other's shoulders, computer scientists stand on each other's toes, and computer programmers dig each other's graves.

I was using the oil analogy to describe forward looking strategy, not directly relating it to bandwidth being a limited quantity.

Yes, capacity can always be added for additional cost. The problem will result when the cost of augmenting capacity exceeds the revenue generated under the current pricing model.

I don't want to get specifically into TWC's test implementation of metered billing because enough data simply isn't available to make an educated evaluation of how "fair" that was structured. People like to relate the costs of operating a DOCSIS network to that of providing bandwidth in a carrier neutral data center facility. The equipment, design, and support models are completely different. That's like trying to compare the manufacturing production costs of producing shoes in a sweat shop in China to manufacturing shoes in a shop in Seattle that pays its workers a living wage. The shoes from the Seattle shop would indeed cost more, but that doesn't necessarily mean the profit margins are higher.

reply to espaeth

reply to espaeth
7% isn't bad in this industry. Plus breaking away from Time Warner, this isn't too bad at all. When they were trying to get it's customer base to accept low caps and high overages, they claimed they had no choice but they wouldnt be 'able to turn a profit' etc..
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I tie a rope around my penis and jump from a tree. Dont you want to grow up and be just like me.

reply to texans20
What? So now its our fault they are trying support one more system than they need? Lets face it. The Systems they use to deliver Television is Obsolete and should have already been in the process of transitioning to internet delivery. For all I care they could still charge for both but using a percentage of profits from both to upgrade and maintain one network.

reply to texans20
Exactly.
If I put money into a CD and was told it would yield 1%, I'd look elsewhere. TWC and others work on the same principle. If ROI isn't high enough, they'll lose investors, and the stock will drop.

reply to brad152
Time Warner is nothing but quality. Blazing fast internet, crystal clear calling and one of the most innovative MSOs around when it comes to HD deployment. All with rock solid reliability. After over seven years with satellite (overrated crap) and a life time of dial up, got Road Runner in 2004, Digital Cable in 2006 and Digital Phone this past April. Very few times have I ever needed service, and the few times I did it wasn't their fault and they were out here to fix it promptly. Anywhere from being out here within 2 hours to next day service. Can't really complain.

Super fast internet with no slowdowns, great calling features, one of the best HD channel line ups around, I love it! TV and internet are my life, I feel like I should be paying much more than the $300/month I currently pay for cable services, for the quality I get I should be paying $400 maybe even $500 a month. I'm glad to see they're making a profit. Not sure why people on this site can't grasp the concept that businesses are not charity cases, they should be setting record profits every quarter.

Apple on the otherhand. Yeah they're 'quality' alright. Let's make a cell phone that can't make calls when you hold it. Evo > iPhone. Android > iOS. 'Nuff said. 1 iPhone and 2 iPods are plenty for one lifetime, I'll never own another Crapple product again as long as I live.
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Time Warner Cable Subscriber, Fanboy, Shill & Lover - Providing an advanced fiber network since before fiber became popular
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reply to Karl Bode