Time Warner Cable is proposing to revolutionize cable television by offering "a la carte" programming packages through a new streaming device and app. This would allow customers to choose only the channels they want and reduce costs compared to traditional bundled cable plans. TWC expects this new model to attract new customers frustrated by high cable bills for unwanted content, as well as gain defectors from competitors. An extensive marketing campaign is outlined to target different customer segments over the product life cycle. Financial projections estimate acquiring 3 million new customers in the first year, with profits increasing after a small price increase that is not expected to impact sales.

1. Time Warner Cable:
Revolutionizing Cable
Television
(offering “a la carte” program packages)
Presented by:
Kevin Dunsmore
Brian Korver
Matthew Reynolds
Inga Shivers

2. Time Warner Cable
 TWC Mission – “to connect people and businesses with information,
entertainment and each other and give customers control in ways that are
simple and easy”
 Products/Services Offered:
 Cable television service
 Internet service
 Telephone service
 Strengths
 Experience in industry
 Infrastructure
 No annual contracts for customers (unlike competition)
 Weaknesses
 A long history of bad customer service (very true)
 Reputation for inferior products and services (not true)

3. Competitors
 Comcast, AT&T/Direct TV, Verizon & Dish Network
 Similar pricing structures
 Offer special intro pricing with contracts
 Try not to compete with one another
 Geographic availability
 Unwritten/publicized agreements to divide up territories
 Force customers to pay for programming they don’t want or need
 All are afraid to change the status quo
Customers
 Need access to live programming (news)
 Want access to specific entertainment (personal tastes)
 Tired of paying high monthly costs for unwanted content
 Switching to online streaming services for specific content

4. Problem
 Online streaming services do not offer viable option for live content
 Streaming service competitors cannot get contracts with networks to offer
such content (don’t want to rock the revenue boat)
Opportunity/Solution
 TWC to use its current subscriber base as leverage to break the mold of cable
television
 TWC to introduce new streaming device (comparable to Apple TV and others)
 TWC to offer “a la carte” program packages through an app within the new
device (customers choose only the channels they want and reap the savings)
 TWC revolutionizes cable television

5. Product
Stream:
• Sets users free – allows them to choose
what they want to watch and simply pay
for that
• A simple app – access the app through the
Stream Box
• Live-streaming – never miss your shows!
Watch them as their showing live, or DVR
them for later
Stream Box:
• Designed to look and feel premium –
charcoal aluminum finish
• Access all your apps - YouTube, Amazon
Instant Video, and Netflix available for
download
• Required to access Stream

6. Price
The Competitors:
Time Warner Cable Verizon Fios
Pricing
Starter TV ($20/month)
Standard TV ($40/month)
Preferred TV ($50/month)
Preferred TV HD-DVR Service ($65/month)
Preferred TV Whole House Service
($80/month)
Preferred HD ($75/month + $30
after Year 1)
Extreme HD ($80/month + $30
after Year 1)
Ultimate HD ($90 + $30 after Year
1)
Channels
Starter TV - 20+
Standard TV - 70+
Preferred TV - 200+
Preferred HD - 245+
Extreme HD - 325+
Ultimate HD - 435+
AT&T Uverse Dish Sling
Pricing
Select ($20/month for 12 months with 24-
month agreement)
Choice ($30/month for 12 months with 24-
month agreement)
Ultimate ($40/month for 12 months with 24-
month agreement)
Best of Live TV ($20/month)
HBO ($15/month)
Additional Channels ($5/month)
Channels
Select - 145
Choice - 175
Ultimate - 240
Best of Live TV - 20
PlayStation Vue
Pricing
Access ($50/month)
Core ($55/month)
Elite ($65/month
Channels
Access - 50+
Core - 60+
Elite - 85+
Time Warner’s Plan:
• Stream Box – Sell for $99, or rent for $9.95/month
• Channel Plans:
• Starter Pack ($25/month) – Pick 20 core
channels (mandatory)
• 40 Pack ($35/month) – Pick 40 core channels
• 60 Pack ($45/month) – Pick 60 core channels
• OR Purchase Channels a la carte:
Core Channels ($1/month each)
Premium ($15/month
each)
ABC ABC Family CBS FOX HBO
NBC AMC Animal Planet BET Starz
Boomerang Bravo
Cartoon
Network CNBC Showtime
CNN Comedy Central Discovery
Disney
Channel
Disney XD E! ESPN ESPN 2
Food
Network Fox Business Fox Sports FX
MTV
National
Geographic Nick JR Nickelodeon
Nicktoons OWN Oxygen Syfy
TBS Teen Nick TLC TNT
Travel
Channel TCM USA

7. Promotion/Advertising Segments
 Current Switchers: Customers who are on the verge of leaving or have
just left TWC. Approximately 110,000 customers in FY2014.
 Targeted during Introduction Phase
 Brand awareness thru targeted mail
 Brand imaging of putting “customer wants first and loyal to our customers”
through new channel packaging options and HBO Go promotion.
 Educated Defectors: Individuals who have left cable/satellite
competitors all together. Approximately 6,800,000 in FY 2014.
 Targeted during Introduction Phase
 Brand awareness thru online advertising
 Brand imaging of putting “customer wants first” through new channel
packaging options, HBO GO Promotion.

8. Promotion/Advertising Segments
Continued
 New Starters: Potential customers who are entering the market. There are
approximately 14 million people ages 20-25 who have some some college
education.
 Targeted during Introduction Phase thru Growth Phase
 Brand awareness thru targeted mail, online advertising.
 Brand imaging of “forward thinking” through new channel packaging options, new set-
top-box
 Defectors: Individuals who leave cable/satellite competitors and switch for a
better cable/satellite offer. Targeted during Growth thru Decline Phase.
Estimate to peak around year 3 with 3.8 million defectors.
 Brand awareness thru online advertising, cable/satellite advertisements, retail store
end-cap displays.
 Brand imaging “of superior deal and forward thinking” through new channel packaging
options, HBO GO Promotion.

9. Year 0 Year 1 Year 2 Year 3 Year 4 Year 5
Introduction:
HBO GO promotion
International Trade, Showing for
Set Top Box,
Heavy Advertising on 20,40, 60
channel option.
Targeted Segment: Educated
defectors, new starters, current
switchers
Spending: $47million
Growth:
Heavy advertising
Targeted Segment:
Defectors, New starters,
Educated Defectors
Spending: $35 million
Sales
Maturity:
Stress product value through
continue advertising
Targeted Segment:
Defectors
Spending: $15 million
Decline:
Unveil product updates/new system
Targeted Segment:
Defectors
Spending: $7 million
Estimated Segment Populations:
New Starters: 14 Million
Educated Defectors: 5.6 million
Current Switchers: 110k
Defectors: 3.8 million defectors at year 3 peak
Promotional Strategy at Different Stages of the Product Life
Cycle w/ Targeted Segments & Marketing Spending by Phase

10. 1 $2,000,000
2 $20,000,000
3 $5,000,000
4 $20,000,000
$47,000,000
2 $15,000,000
4 $20,000,000
$35,000,000
2 $5,000,000
4 $10,000,000
$15,000,000
2 $2,000,000
4 $5,000,000
$7,000,000Total=
Growth Phase
Onine Advertising
Cable/Sat Advertising
Total=
Maturity Phase
Onine Advertising
End-Cap Displays
Introduction Phase
Promotional Budget for PLC
Cable/Sat Advertising
Total=
Cable/Sat Comparative
Advertising
Trade Shows
Onine Advertising
Total=
Decline Phase
Onine Advertising
Cable/Sat Advertising
Promotional Budget

11. Place/Distribution
 TWC Support Centers: Projected primary distribution method for current
switchers.
 Hundreds of Support Centers located throughout US.
 Online Sales: Projected primary distribution method for new starters and
educated defectors. Set-top-boxes will be available online through:
 TWC Store website
 Amazon.com
 Target online store
 Walmart online store
 Physical Retail Locations: Projected primary distribution method for the
defector segment.
 Target
 Walmart

12. Long Term Plan & Profitability Projection
 Customer Acquisition and Financial Revenue Goals Driving Actions
 Disruption of the current TWC offerings are time sensitive
 CURRENT and NEW competitors developing new strategies to compete
 CURRENT and NEW competitors will have a major impact on “a la carte” growth in
12 to 18 months

13. First 12 Months
 Customer Acquisition – Segment First 200,000 Customers
 Drill down into the first 200,000 customers
 Segments Include:
 Current Switchers
 Defectors
 Educated Defectors
 New Starters
 Market Research:
 Big Data
 Surveys
 Qualitative and Quantitative Research
 Find 2 Target Markets we will pursue

14. Survey Results
From 128 online respondents and
130 in person respondents
Question: Would You be interested in subscribing to only
the live channels you want to watch to save money?
 YES 117 45.3%
 MAYBE 86 33.3%

15. Projections
 3 million new customers the first 12 months
 5 year product life cycle
 8% growth year 1
 10% growth year 2
 7% growth year 3
 5% growth year 4
 3% growth year 5
 Average Customer’s Lifetime Value: $1,100

16. Financials
 Introduction Phase
 Cost to acquire 1 new customer = $23
 Penetration Pricing – the practice of offering a new product at a low cost
 Break-even Volume = fixed cost/price – variable cost
 Fixed Costs: $3,000,000
 Variable Cost Per Unit: $18.00
 Selling Price Per Unit (average): $32.50
 Break-even at 206,897 units

17. Table Profits Before and After a Price Increase
Before After
Price $25 $26.75 ( 7% price increase)
Units sold 100 100
Revenue $2500 $2675
Costs - $2300 -$2300
Profit $200 $375 ( 8.75% profit increase)
Our survey found most respondents surveyed, watch 11 to 20 channels.
The table above shows, profits before and after a price increase. For
our “a la carte” choice of 20 channels, a 7% increase in price, will yield a
8.75% increase in profit. We anticipate that this increase in price will
have no effect on sales.
Financials Continued

18. Questions?