Time Warner's (NYSE:TWX) cable division wants to differentiate itself from its rivals in an industry increasingly beset by online downloads and ad-skipping digital video recorders. Case in point: News reports indicate that Time Warner is talking to the major broadcast networks about starting a channel dedicated to reruns of hit TV shows.
According to the reports, Time Warner Cable is in "high-level" talks with General Electric (NYSE:GE) and Vivendi's NBC, Disney's (NYSE:DIS) ABC, CBS (NYSE:CBS), and News Corp.'s Fox to offer this premium rerun channel, allowing Time Warner Cable subscribers to catch up on episodes they initially missed. (A New York Times article suggested that a subscription might cost $10 per month, although Time Warner didn't confirm that number.)
While this strategy sounds interesting, I have my doubts. Although a company spokesman described this as a service that could be complementary to DVRs like TiVo (NASDAQ:TIVO), it seems to me most DVR users are recording the shows they want to watch anyway, and therefore wouldn't miss an initial broadcast to begin with. The sole exception might be viewers who are trying to get into a new show.
It's hard to imagine that the networks would be completely amenable to the idea, unless the deal was sweet enough. It might benefit them by getting viewers hooked on their shows, but I'd also think the networks would risk rerun-induced audience fatigue. (Lost fans are famously frustrated by the frequent reruns aired between new episodes.) Reruns may be good for folks who didn't catch the episode the first time, but for those who did, they're often a good excuse to channel-surf for other options. It's also worth noting that Comcast (NYSE:CMCSA) and DirecTV (NYSE:DTV) announced a similar deal with CBS late last year.
You've got to give the players credit for trying to innovate in these days of rampant time-shifting. Time Warner Cable recently started testing a service called Start Over, which gives viewers the opportunity to play a show from the beginning if they stumble across it mid-episode. And of course, cable providers are trying everything from video on demand to things like Comcast's new on-demand exercise channel, designed as a forum for advertising and product placement.
At any rate, Time Warner Cable's rumored hits-based channel is yet another example of the changing face of television. A rerun channel might end up a big bust, since television shows are increasingly available online through legal services like Apple's -- and illegal but widespread file-sharing networks. Considering the disruptive influences currently at work on the TV industry, I'm not sure this idea thinks far enough outside the box.
Time Warner is a longtime Motley Fool Stock Advisor selection; TiVo is also a recommendation. To find out what companies David and Tom Gardner have more recently selected as recommendations for subscribers, click here for a 30-day free trial.
Alyce Lomax does not own shares of any of the companies mentioned.
