With the swirling influx of competitors - telco, satellite and Internet-based - the cable industry is becoming more vulnerable to market share loss. Dick Parsons, the CEO of the industry’s number two cable company, Time Warner, apparently agrees. Speaking at Goldman Sachs’ Communacopia conference this morning, Parsons hinted that Time Warner is starting to think about “dialing down” on its cable ownership interests.
“We have a cable company that will sail into a sea of new and large and well-financed competitors. It will eventually in time have to evolve into a robust telecommunications company,” he said. “Right now I believe that cable is still a strategically important asset choice. Now would not be the time necessarily to sort of cast it off. But will that change over time? We’ll see.”
AOL, the former ugly step-child of Time Warner, is quickly becoming the parent’s favorite. “The big growth opportunity for us is in AOL, and that’s why it’s sort of the number one focus for us right now,” he said. “I really do believe that not only does AOL represent an under-valued asset in our portfolio..if we can get it to work, if the way I think we can get it to work, it will not only increase the value of AOL but all the other properties in our portfolio.”
Parsons wouldn’t discuss the rumored talks between Time Warner and Microsoft that center on merging AOL with MSN, but he did say that the only component missing from AOL’s platform for revenue growth is paid search. Microsoft is supposedly looking at an AOL deal to swipe some search market share from its arch-rival, Google.
As the video world moves to an all-digital platform, whether on TV, the web or in physical form, the biggest threat Time Warner sees is piracy, Parsons said. “The privacy threat - that to me is the single biggest challenge that digital technology presents.” He is particularly concerned about China, where an estimated 950 million DVD units, out of a total billion units sold in that country last year, were pirated.
Cynthia Brumfield at 9:09 AM|Comments(0)
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