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Sinking porn sales have left a gaping hole in Time Warner Cable's revenue.  (Source: AP Photo)

Cable companies like TWC typically rely on video on demand (VOD) content like porn or pay-per-view sporting events, a profitable backend to their general services. But customers would rather find porn online than pay expensive fees to their cable provider.  (Source: AP Photo)
It's getting harder and harder to get customers to submit to loads of porn purchases

When it comes to its video on demand (VOD) profit line, Time Warner Cable Inc. (TWC) can't seem to get it up.  The company's leadership blames the drooping figures mostly on a single culprit -- internet pornography.

While the company is going hard at trying to generate new revenue, it's finding an increasingly gaping hole in revenue that it can't seem to fill -- declining adult video sales.  States CFO Rob Marcus in an interview with All Things Digital:

One of the things going on with VOD is that there’s been fairly steady trends over some time period now for adult to go down, largely because there’s that kind of material available on the Internet for free. And that’s pretty high margin. That’s been not just this quarter, but going on for some time period.

It seems rather than paying $9.99 to rent HD adult movies, dirty customers would rather find them online for free on streaming video sites or file-sharing sites/services.  As porn was typically among the high margin items that dominated cable TV revenue, the decline has sent revenues into submission.

To be fair, porn sales isn't the only factor nailing Time Warner.  While it accounts for a third of the drop in revenue, movie rentals and pay-per-view revenue (to events like boxing or the Ultimate Fighting Championship) is also down.  The net result is that while cable subscriptions remain pumping in at a steady rhythm, declining revenue from the premium content back end is sticking it, overall, to profits.

When it comes to companies like Netflix, Inc. (NFLX) and Apple, Inc. (AAPL) taking movie rental sales from Time Warner, though, Mr. Marcus emphasizes caution.  Unlike the porn sales, he says that decline may reverse its current position.  He remarks, "I wouldn't draw any conclusions quite yet."

The question, though is whether Time Warn will truly be able to come up on top of such savvy competitors.


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Mick, You..
By Sazabi19 on 8/5/2011 2:52:16 PM , Rating: 5
Had waaaaay too much fun writing this article :P




RE: Mick, You..
By Sazabi19 on 8/5/2011 2:54:14 PM , Rating: 2
Hey Mick, how about some links to the free stuff? That would give this page ALOT more hits ;)


RE: Mick, You..
By dark matter on 8/5/2011 4:00:00 PM , Rating: 5
You don't know how to get free porn on the internet. Dude, your internet sucks..


RE: Mick, You..
By spamreader1 on 8/5/2011 4:27:21 PM , Rating: 4
An opportunity for an apple pun too.
He must be holding it wrong...


RE: Mick, You..
By 4745454b on 8/7/2011 12:36:15 PM , Rating: 2
"You can't whack it internet porn like everyone else?"

"You know I don't have a credit card."


RE: Mick, You..
By andylawcc on 8/5/2011 10:17:39 PM , Rating: 2
this article is a win!


RE: Mick, You..
By inperfectdarkness on 8/8/2011 9:39:42 PM , Rating: 3
$9.99 for a movie? most guys are only going to watch 5 minutes of it anyways. seems like a pretty much no-brainer here.

p.s.
comcast sucks, and not in a good way.


whoa is the cable companies
By phatboye on 8/5/2011 3:15:17 PM , Rating: 5
So the cable companies are back at it. Whine about declining sales figures from a high profit margin area where for years they have been literally fucking over the customer harder than the whore in the X-rated movies that they scream about.

Who would have ever thought that one day customers would one day wake up and realize that paying 9.99 for a 4 hr VOD rental is such a shitty deal and that if they could only look to the internet they could find that exact same movie for cheaper. Now I am not advocating stealing movies from the internet but when your only other option from the cable company is something as ridiculous as what they are offering any sane minded individual would probably not pay for VOD either.

Cable TV is slowly being replaced by the internet and if these Cable companies want to keep from totally being replaced by the internet they need to stop screwing their customers, lower their fees and make their services more attractive.

Lately I've been thinking about cutting my Cable TV off as I rarely even have the time to watch it and half the crap that comes on isn't worth my time. There are only a few shows that I even watch so I won't miss much. And even with ISPs starting to throttle bandwidth or impose download caps it's still cheaper for me to have 2 internet ISPs in my home than is is just to have cable TV.




RE: whoa is the cable companies
By gorehound on 8/5/2011 3:49:39 PM , Rating: 5
great !!!
greed will bring down these asshole corps not their loss of customers.they just won't work with what is the new reality.
they are like dinosaurs.


RE: whoa is the cable companies
By Hyperion1400 on 8/5/2011 8:38:06 PM , Rating: 2
Dude, if you think those prices are bad, you should walk into an actual porn shop. The CHEAP ones are $30; good ones cost even more and even then you will only watch for like 5-10 minutes! And the porn industry wonders why we flock to Redtube?


RE: whoa is the cable companies
By runutz on 8/6/2011 1:45:57 PM , Rating: 2
Forgive my ignorance on the subject, but...

You pay by the hour to watch porn? Is that like the seedy whorehouse where you rent the room by the hour, except you are at home...alone?


RE: whoa is the cable companies
By Hyperion1400 on 8/7/2011 4:25:03 PM , Rating: 2
No, I was just pointing out that no one watches an entire porno; so paying $30 for a "movie" that you will only watch 10 minutes of is a bit ridiculous.


RE: whoa is the cable companies
By just4U on 8/8/2011 12:42:25 AM , Rating: 3
It's not only to do with porn though .. it's Video on Demand movies in general. Look at the pricing!! Used to be you could rent a movie from one of a 1000 places in your area for 2 bucks.. prices right now on VOD rentals are obscene.


IF they were smart...
By EricMartello on 8/5/2011 2:32:41 PM , Rating: 3
Rather than charging a per-rental or per-viewing fee that is outdated and excessive (on top of the $150 a month fee they're already charging for internet/TV access), they should offer an option that mimics netflix. A flat $10 per month extra to have unlimited access to all on demand content, or perhaps a particular category of content.




RE: IF they were smart...
By amanojaku on 8/5/2011 4:19:51 PM , Rating: 5
I'm surprised PPV porn still exists. I hear it's censored (?!?), expensive, and you can't keep it. It's like renting a video tape of the Superbowl, only to have someone cover your eyes every time there's a touchdown. That's why I have BitTorrent and eMule. Er, I mean, a harem of supermodel alien ninja cat girls. In sailor fukus. Because I'm not so lame that I need porn.

I think back to when I had cable, and TWC regularly tacked on random porn PPV charges to my bill. I had to cut the service off eventually to stop the charges. From then on you have to call in and pay a $2 manual activation fee for a movie. Five PPVs in a year would be $10, way cheaper than the $50-$60 I got hit with every month for something I never saw. All I ever watched was Wrestlemania and such, cuz I love it when the Undertaker does it old school.

I finally got the charges removed when I explained that there's this little thing called the Internet. I can get all the porn I can afford to store for free. Funny how TWC now is suffering from the very thing I warned it about years ago. It didn't see this coming any more than it saw people using the bandwidth they were sold.


RE: IF they were smart...
By Flunk on 8/6/2011 9:32:15 AM , Rating: 3
PPV porn exists because it's the single most profitable thing that TV providers sell. I used to work for a major satellite TV company and the profit margin on porn is absurd. If you're paying then $10, chances are the producers of the film are only getting about $0.50. Porn is inexpensive to make but expensive to purchase making it a very profitable industry.


RE: IF they were smart...
By tng on 8/6/2011 11:31:46 AM , Rating: 3
quote:
...on top of the $150 a month fee they're already charging for internet/TV access...
Wow, $150? You are paying that much?

I dumped cable TV when the combined cost went to $110 and they dumped my basic cable "...to increase bandwidth...", then wanted to charge me rental for the STB, plus this whole thing made my QAM Sony HD DVRs useless, and there was a rental for a DVR as well.

Dumped the TV portion and kept the internet, went to Satellite and have been very happy since.


RE: IF they were smart...
By EricMartello on 8/8/2011 8:49:33 PM , Rating: 2
Did I say I was paying that? Cable bills are in that ballpark of $150 for TV and Internet. If you don't mind the drawbacks of satellite TV then it's a cheaper alternative, but for my needs I got the best value with FIOS using a combo deal.


RE: IF they were smart...
By tng on 8/9/2011 11:37:59 AM , Rating: 2
quote:
Did I say I was paying that?

No, you didn't say that, but plenty of people out there are in that boat. I have not found any drawbacks to satellite yet, sure there are some, but so far it has met my needs.


The o$$@ thing this article is missing..
By FUXX on 8/5/2011 2:42:23 PM , Rating: 1
is some bad puns.




RE: The o$$@ thing this article is missing..
By FUXX on 8/5/2011 2:43:26 PM , Rating: 2
only is a bad word?


RE: The o$$@ thing this article is missing..
By Obujuwami on 8/5/2011 2:52:50 PM , Rating: 2
It's not, for some reason the website is having issues with the "ly" type of words in the title. Its been going on for a few weeks now.


By Samus on 8/5/2011 3:13:22 PM , Rating: 4
Gaping hole. Really, Jason?


By OS on 8/5/2011 4:25:34 PM , Rating: 3
"..GOES DOWN ON.."


Imagine that?
By Concillian on 8/5/2011 6:01:11 PM , Rating: 5
Jack up the prices of VOD to astronomical levels and people start looking for alternatives instead of opening their wallet to the vacuum cleaner.

Seriously, Time Warner, Comcast, Cox and all the other cable companies: Stop blaming the internet for your own failed pricing tactics.

Back in the day, PPV prices were like a buck or two. I'd watch occasionally.

Now I can buy the DVD / Blu ray and if I watch it TWICE I'm money ahead of watching it twice on VOD. Pricing is the problem, not the internet. What you call "high margin" your customers call "poor value".




RE: Imagine that?
By mcnabney on 8/8/2011 10:00:34 AM , Rating: 3
quote:
What you call "high margin" your customers call "poor value".


Truer words have never been spoken (or typed)


Seriou#*! ?
By shaidorsai on 8/6/2011 9:15:06 AM , Rating: 5
TW is complaining about falling revenue due to lack of porn sales? How about the lack of sales period.

4 things to fix the CATV industry and make it profitable:

1 - sell user defined packages and stop force feeding crap to people that they dont want to buy...example # 1 Spanish TV channels...example # 2 Oxygen...seriously let me pick my own channel lineup. I could really care less if Oprah's channel, or any other, would go under without forced revenue streams. If your customers don't want a channel then stop buying it and forcing it on them.
2 - stop over charging for movies on PPV...anything over 3 dollars is a complete rip off. There is no building, seat, bathroom, concession stand, employees or anything else related to an actual movie theater so stop charging like one. I refuse to pay you more than 3 dollars to watch a movie on my own couch using my TV and drinking my beer. Bugger off.
3 - stop over charging for internet service. The cable and all of the routing equipment was written off as a business investment and has been making you millions for years without you doing jack besides forging FCC bi-annual inspection reports so stop the BS and lower the price.
4 - Hire some people that actually speak English and use your service so when I call in a trouble they have some freakin idea of what I mean when I say channel 3 is out...again.




3D is needed
By proflex957 on 8/5/2011 10:00:19 PM , Rating: 2
Profits will go up again




RE: 3D is needed
By FaceMaster on 8/6/2011 7:58:34 PM , Rating: 2
Along with something else...


No gay porn
By superstition on 8/7/2011 10:16:41 AM , Rating: 2
Their whining about sagging profits makes me smirk. They've long chosen to refuse to offer gay porn, despite its profitability. While, of course, the heterosexual male audience is larger, there is revenue they could have been bringing in -- especially in the past when fewer people relied on free Internet videos.




RE: No gay porn
By superstition on 8/7/2011 10:21:24 AM , Rating: 2
They may need to stop getting approval for their videos from Pat Robertson.

Time Warner, the company that shows the 700 Club and offers no gay porn.

I wonder which dinosaur is more profitable.

lol


By gevorg on 8/5/2011 10:13:14 PM , Rating: 3
Took them this long to find out that...
.
.
.
.
.
THE INTERNETS IS FOR PR0N!




Time Warner = Crap
By tayb on 8/6/2011 10:58:44 AM , Rating: 2
The only good thing about this company is that they don't throttle or cap your bandwidth, yet. Complaining because people are watching free porn instead of you $10 rental is just hilariously stupid. $10 for a rental!

They are horribly unreliably about installations and setup, their television and home phone prices are outrageous, and if you sign up for JUST internet they'll harass you with phone calls at all hours of the day asking if you are interested in signing up for more service. I've been called on Sunday at 8AM and because I'm a customer they aren't technically doing anything illegal.

Unfortunately the only other option I have is AT&T. And people act like there isn't a monopoly.




Arrrrghhh
By garagetinkerer on 8/7/2011 2:08:32 AM , Rating: 2
Time Warner has just been pr0ned!

I mean seriously. I didn't even google much and i found this:
http://healthymind.com/s-porn-stats.html

Now you're saying that with your multi-million dollar marketing execs, you didn't thought it would be prudent to look at how you're doing business?

Instead of forming a special interest group and lobbying for taxing internet more, or netflix for more... just consider how you market your services, and more importantly at a cost viable for your customers. I mean you don't really want to kill your golden goose, do you?

Having worked in customer services for 3 years i find this shoddy behaviour shocking to say the least. The fact that these corporations would go onto blame customers, is just plain asinine.




PPP
By wallijonn on 8/10/2011 11:33:03 AM , Rating: 2
quote:
pay-per-view revenue (to events like boxing or the Ultimate Fighting Championship) is also down.


That's what happens when boxing dies from the public consciousness from lack of free TV viewing. Pay $100 to watch a boxing match on PPP? Is it any wonder why boxing is dying?

The same will happen if baseball, football, basketball or hockey goes to PPP: people will forget that it even exists and will not be willing to pay $100 to view a game.




Porn Scorn
By Super Speed Train on 8/11/2011 7:41:49 PM , Rating: 1
Reading all the comments I forgot what the original issue was/is. All I can say is this, were it not for on-line porn, we would not have the internet as it is today. Porn Sites have built the internet and will always drive it. That said, am i really the only guy that watches the entire movie? Dam.. no wonder I am sore the next day. hah! No, seriously, The porn industry while a little seedy has pioneered much of what we experience online. We will see more growth and improvement across all levels provided we keep the internet free. I read today Britain is looking at shutting down social media because of the riots. That;s scary. Visit Super Speed Train for more sexy news http://superspeedtrain.com




Is it just me?
By dxf2891 on 8/5/11, Rating: -1
Jason, You're Doing it Wrong
By The Insolent One on 8/5/11, Rating: -1
RE: Jason, You're Doing it Wrong
By bigboxes on 8/6/2011 12:35:34 AM , Rating: 5
It was funny. When you try too hard to be critical of a certain writer using tired overused criticisms, the effect is not deep wrought groanings. It's more like the readers wincing and waiting for your diatribe to be over.

Check this out and give it another try: www.lightenupdickhead.com


RE: Jason, You're Doing it Wrong
By bupkus on 8/8/2011 3:53:16 PM , Rating: 2
Why do I have the feeling that "someone" is stuffing the ballot box?


"Well, we didn't have anyone in line that got shot waiting for our system." -- Nintendo of America Vice President Perrin Kaplan














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