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Time Warner Cable plans for TV on the Internet

Posted at 12:25 PM, Oct 29, 2015

NEW YORK (AP) — Hate your cable box? In a few weeks, Time Warner Cable is going to start testing in New York City a cable service that doesn't need one and is delivered over their customers' home Internet.

"Where we're headed is the ability of customers to access the complete video product without having to rent a set-top box from us," said CEO Rob Marcus on a call with analysts. He said one thing the company had to do was make sure that every channel was available for an Internet TV alternative that worked through a streaming-TV device like a Roku.

Marcus said ditching the box would make it easier for the company to set up cable for customers, and you wouldn't need a tech to install it for you. "You can simply type in your username and password and you have video," he said.

That could appeal to younger people who have grown comfortable watching TV via Netflix or Hulu. The number of people skipping cable service is increasing as more people choose the Internet for their video fix.

To try to capitalize on that trend, Comcast has a plan in the works too, with a service called Stream that it's been testing for free Boston. Comcast spokesman Steve Restivo says the service, which is just broadcast networks and HBO, will launch this quarter in a few markets.

Time Warner Cable's TV app is already available on a Roku or Xbox for cable subscribers, who can use it in place of a 2nd cable box. If you had two TVs in your house and one cable box, the app would serve as a second cable box, just without DVR functionality or the ability to buy video-on-demand movies.

With the new trial, Time Warner Cable is eliminating the need for that first cable box, which usually comes with a monthly fee for customers, and throwing in a free Roku. It'll have a couple options for TV service packages.

The New York company, which Charter Communications is trying to buy, said Thursday that cable customers fell by 7,000 in the July-September quarter, to 10.8 million. (Like Comcast, Time Warner Cable said that it was its best third-quarter result since 2006.) The company said that the number of people signing up and the number of people who were leaving both improved in the third quarter, and that its internal measures of customer service showed gains.

But the real driver is the Web. It gained 232,000 Internet customers, to 12.4 million. The company said more customers are signing up for faster, more expensive Internet speeds.

Its net income fell 12 percent to $437 million, or $1.53 per share, hurt by costs related to merger activity. Adjusted earnings per share topped analyst expectations. Revenue grew 3.6 percent to $5.92 billion, which was short of Wall Street's prediction.

Time Warner Cable shares gained 2.2 percent to $189.27 in afternoon trading.