After Comcast Rolls Out a Great New Cable Plan, Time Warner Follows Suit. Sort Of.

Rich Smith
Updated
Cable boxes are stacked before being stored at the Time Warn
Andrew Harrer/Bloomberg via Getty Images

They say that imitation is the sincerest form of flattery. So, Comcast (CMCSA), consider yourself flattered, because Time Warner Cable (TWC) is copying off your homework.

A couple of weeks ago, we told you about Comcast's "Great New Secret Cable Plan" to try to halt the exodus of subscribers from its services. The Comcast plan allows subscribers to sign up for:

  • A menu of 45 or so of the most-watched, most useful cable channels

  • The premium pay-TV channel HBO -- plus included HBO GO service for mobile devices

  • High-speed Internet access at speeds up to 25 Mbps

  • A subscription to XFINITY Streampix, Comcast's service for streaming video of complete seasons of popular television shows from recent years past...

... all for the low, low price of just $40 or $50 a month (depending on location).

The plan was "secret" because Comcast didn't make much of an effort -- or really any effort -- to publicize it. There's hardly even a mention of the plan on the company's website. In other words, it seems like Comcast would prefer to keep the new plan hush-hush so you continue paying for one of their more expensive bundles.

However, word of Comcast's under-the-radar new plan did get out -- nearly 5,500 DailyFinance readers printed, emailed, commented on, Tweeted, or Facebooked our story on Comcast's "Internet Plus" bundle last month.

So Comcast competitor Time Warner did what any good competitor does: It copied the model and, this week, began offering a similar plan of its own:



Dubbed "Starter TV with HBO," Time Warner's plan is an even more slimmed-down version of Comcast's idea. It features:

  • "20+" cable channels, including the five biggies -- ABC, CBS, NBC, Fox, and PBS

  • HBO and HBO GO

  • and... well, actually, that's about it.

At $30 a month, Time Warner handily undercuts Comcast's Internet Plus offer on price. And yet, it's hard not to wonder if customers aren't still overpaying.

%VIRTUAL-article-sponsoredlinks%For one thing, Time Warner's Starter TV with HBO offers only about half the channels included in Comcast's deal. Time Warner also doesn't include Streampix (which is a Comcast-only service). Most crucially, Time Warner's deal does not include Internet (although one imagines you can bundle it... at a cost, of course).

Adding the insult of surcharges to injury, Time Warner also includes a bit of fine print informing customers that the $30-a-month fee for the service (which is only guaranteed for 12 months. Did we mention that?) doesn't include the cost of equipment. Just renting a simple cable box will jack up the cost by more than $10 -- meaning it will cost as much as some customers are paying for Comcast Internet Plus, despite giving only about half the service.

So Long, Time Warner, We Hardly Knew Ye

One-third the size of Comcast (by annual revenues), Time Warner Cable has been losing customers at a rate 66 percent faster than its larger rival. Over the past couple of years, more than 1.13 million TWC customers cut the cord.

Like Comcast's plan, Time Warner's appears designed to stop the wave of customers defecting from cable to satellite TV providers DIRECTV (DTV) and DISH Network (DISH), and telcos AT&T (T) and Verizon (VZ), all of which have experienced net gains in subscribers over the past two years.

But Time Warner's "me-too" plan is a poor imitation of Comcast's gambit. It may look a little bit cheaper, but with the Starter TV with HBO plan, you really are getting only what you pay for.

And that's not much.

Motley Fool contributor Rich Smith has no position in any stocks mentioned. The Motley Fool recommends DIRECTV.

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