Time Warner Battles Satellite TV With 400 Channels By CARLOS MARTINEZ Staff Reporter West Valley cable television viewers are the first in the United States to have a 402-channel lineup, say Time Warner Cable officials, who have tripled their channel choices in the last two months as part of an effort to compete with satellite television. “We’re now on a par with satellite companies and we hope to improve upon that,” said Max Herbas, director of new products for Time Warner Cable’s Los Angeles Division, which oversees the West Valley. Since Dec. 27, Time Warner has offered 402 channels as part of its conversion from an analog to a digital cable system, and touted it as the nation’s only cable system offering more than 400 channels to choose from. The changeover means residents can opt to keep their 80-channel analog cable service for $42.50 per month or upgrade it to the 402-channel digital system for about $70 a month (depending on the premium movie channels they choose), Herbas said. “Going digital is what brought us all these channels and different choices, but our non-digital customers can keep their service without penalty,” he said. Time Warner says it spent in excess of $60 million to upgrade to a digital system in the Los Angeles area. The digital channel lineup includes all 21 on-air channels in the Los Angeles metropolitan area, basic cable channels like CNN or MTV, 10 HBO channels, 10 Showtime channels, four channels of The Movie Channel, STARZ and Encore premium movie channels. Less-known channels available are the Style Channel, Ovation, the Inspirational Network and five versions of the Discovery Channel. Analysts say cable companies feel the pressure to upgrade to more expensive digital systems to reduce the continued migration of its customers to satellite television systems. “Cable television has become more expensive while offering fewer channels than satellite TV systems,” said Lara Warner, an analyst for Lehman Brothers. “They have to keep these customers and, in order to do that, they have to offer a wider variety of channels.” Even so, satellite companies have little to worry about, said Mark Lumpkin, a spokesman for Dish Network, owned by EchoStar Communications. “We have 6.5 million customers and we’re continuing to draw customers away from cable at a rapid pace,” Lumpkin said. “People just prefer satellite television to cable.” Federal law now requires all pay television providers to carry every on-air channel in markets where they provide local channels. Satellite TV providers have had to limit the number of markets they serve because they say they don’t have enough capacity to beam all local channels for every community they serve. That has given cable companies a strong selling point as they harp on the satellite companies’ inability to supply viewers with local channels. But analysts say satellite companies have the edge over cable companies as they continue to lose viewers to popular satellite services like EchoStar’s Dish Network and DirecTV, owned by General Motors’ Hughes Electronics. The two satellite companies are seeking regulatory approval of their planned merger first proposed last year. Regardless of whether the government signs off on the deal, viewers will continue to be attracted to the $30 to $40 monthly fee in exchange for nearly 500 channels, as opposed to nearly double that to watch digital cable, Lehman Brothers’ Warner said. Even though new satellite TV subscribers initially pay more than $200 for the dish and related equipment, Warner said, the deal is attractive to those fed up with escalating cable prices. “Cable companies are forced to spend hundreds of millions of dollars to upgrade to digital systems in order to compete with a more efficient satellite system,” Warner said.
