Thousands ditch Spectrum, but not all seeing red with Time Warner Cable switch

Todd Clausen , Jeff Platsky | Democrat and Chronicle

Show Caption Hide Caption VIDEO: Former Time Warner customers finding higher bills Since last year's acquisition of Time Warner Cable by Charter Communications, many customers are finding the cost for monthly service rising as Spectrum adjusts pricing, eliminating promotional deals for established customers

Some say not much has changed in the Time Warner Cable-Spectrum changeover.

Spectrum claims it has gained TV customers despite some churn in the transition.

Nancy DeTaye Garbato said she found frustration — and higher prices — when Time Warner Cable changed over to Spectrum earlier this year.

While the change has riled up many customers, some have been pleased with the change. Others say it hasn’t made any difference.

In Garbato's case, her bill for bundled services jumped from $150 to $200.

Negotiating with customer service and trying to detach services got her nowhere. She said a discount promised in March never came through, and she's upset with the treatment after nine years with the company.

"Spectrum is the worst," the Irondequoit resident said.

Former Time Warner Cable customers throughout Monroe County have faced similar increases as their promotions run out and are put on pricing plans offered by Spectrum, the phone, cable and Internet provider run by Charter Communications Corp.

"There were 90,000 separate offers and many of them were deeply discounted and they were piled on top of each other," Charter Chief Executive Thomas Rutledge said during a recent investment summit. "It was a Turkish bazaar. You'd call in and bargain and you'd get a package."

Bottom line: Deals for existing customers are fading away. Promotional pricing is for new customers only, not Time Warner Cable customers. Calling customer service and threatening to leave doesn’t carry the sway it once did with Time Warner Cable.

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Further price adjustments for former Time Warner Cable customers may be on the way. Rutledge said just 17 percent of the Time Warner legacy customer base is on Spectrum pricing. The remaining 83 percent may be in for surprise when they open their next Spectrum bill.

Charter has already paid a price for its pricing shift.

It lost 100,000 customers, mostly cable customers pushing back against the new rates (TV starting at $64.99 per month; Internet at $53.99).

Rochester resident Jeanna Janssen has a phone, Internet and cable TV package with Spectrum for about $149 a month. She's been satisfied with the transition.

"Great service, excellent speeds," she said. "Gave us a credit for outage during the windstorm with no hassle, (just a) simple phone call."

Rutledge expects churn among former Time Warner customers will be a short-term trend, but others are not so certain.

"In order to continue to grow, you have to keep the customer happy," said Jeff Kagan, a telecommunications analyst based in Marietta, Georgia.

Rochester-based Greenlight Networks, which plans to provide internet service to the entire county in roughly five years, said it hasn't seen a bump in customers tied to those fleeing Spectrum.

Greenlight’s plans start at $50 per month. A $100 install fee is also required. The company declined to disclose its customer count.

"Our demand from word of mouth continues to be amazing and we will continue to meet that demand as quickly as possible," said Casey Henninger, a spokesperson for Greenlight.

Cord cutters

Cable television stands at the crossroads.

More subscribers are abandoning conventional services for alternatives available through broadband, surviving with an on-demand stream of either Netflix, Hulu or Amazon Prime, or a combination.

Emerging alternatives such as Sling and PlayStation VUE offer a smaller a la carte menu of popular channels to those looking to trim bills and channels.

Michael Huffman cut the cord on cable television a while ago. He’s waiting for Greenlight to enter the city before he leaves Spectrum completely.

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"We don't have enough options. Whatever happened to competition?" the Rochester resident said. "I dropped (Time Warner) cable before the transition for several reasons: It costs ways too much; I don’t like paying money to watch reruns with commercials; (and) I believe that we should be able to choose from an a la carte menu."

Even with many vowing to bolt for new providers, there's continued debate on the impact of cord-cutting on cable television services.

Accounting firm Deloitte recently released its "Digital Democracy Survey," which said the percentage of American households subscribing to paid cable has remained relatively stable since 2012, even with more streaming services now available.

Hulu has a basic plan for $7.99 a month. It also is offering a new $39.99 monthly plan with live TV. Sling’s basic plan costs $20 and provides some of cable television's most popular channels.

Henrietta resident Amy Olson picks up 17 channels with a $20 antenna from Amazon. She uses a Roku device and has Spectrum's internet.

"Once Greenlight comes to our neighborhood, I will never give Spectrum another dime," she said. "And I will do a happy dance."

Vera Plotkin uses Netflx, Hulu and Amazon Prime for about $25 a month. Amazon Prime also comes with other services, such as a music app, the Penfield resident said.

"The technology part is pretty easy to figure out," she said. "My parents, who are older and retired, actually stream Russian TV and love it."

The loss of customers is having an impact.

Popular cable sports network ESPN, cable television's most expensive service on a per subscriber basis, has already felt the impact of customers fleeing, losing 12 million subscribers over the past six years.

That’s a significant revenue loss for the Disney-owned network.

ESPN charges cable outlets $7.21 per subscriber every month. Impact from the loss took a large toll, with a bevy of high-priced on-air personalities cut earlier this year.

"The traditional cable television industry has crested," Kagan said.

Charter closed the complex $67.1 billion merger deal for Time Warner Cable and Bright House Networks last year, catapulting it to the second largest cable television provider in the nation after Comcast.

After the deal, Charter counted 17 million cable subscribers and 19 million broadband subscribers in its fold. Spectrum internet customers pay no modem rental fees. They've also been promised better speeds with no data cap.

Changing habits

While demand for high-speed broadband is expected to continue unabated — Charter gained 428,000 residential internet customers in the first quarter of 2017 compared with 520,000 a year ago — few project anything better than a flat line, at best, for video services.

"Video is important as ever," Kagan said, but how we watch is changing. "We’re going to be watching, but we’re going to watch what we want when we want."

Not always on the large screen either. Laptops, as well as mobile devices such as smartphones and tablets, will command more viewer attention.

Strategies to deal with ever changing technology and consumer demands are in the works at Charter, Rutledge said.

Those may include easier customer interfaces for video services such as Hulu and YouTube, he indicated at the media summit. Other options may include specialty video offerings designed solely for Charter subscribers.

"Our fundamental obligation to our customer is to make our customer's life easier in terms of using video," Rutledge said.

Wall Street, for one, still believes in Charter’s strength. Since closing the Time Warner deal last May, Charter stock is up 54 percent at $352 a share.

Last year the company reported net income of $3.5 billion on revenues of $29 billion.

The company also opened a Henrietta call center earlier this year with plans on employing roughly 225 at the Calkins Road site.

Spectrum recently announced an internet package for $14.99 a month in the city available to families receiving free or reduced-priced lunches, Community Eligibility Provision meals and to those 65 or older who receive Supplemental Security Income.

Participants, which doesn't include those on Social Security, can't have a Time Warner Cable of Bright House broadband subscription within 30 days of signing up.

Many former Time Warner Cable customers are continuing to review their options, looking for the best prices and offers.

Ian Mowatt left DirecTV for Spectrum a few months ago after his bill slowly increase over several months. He said the issues faced by Spectrum and DirecTV customers are similar.

"No carrier so far lives up to the hype," the Albion, Orleans County, resident said. "It's, in my opinion, proof that bigger is not better."

TCLAUSEN@Gannett.com

JPLATSKY@Gannett.com