Time Warner Cable
), the second largest cable multi-service operator ('MSO') in the
U.S. has collaborated with Roku Inc. to offer TWC TV through Roku
streaming devices in the US. Time Warner Cable, for the first
time is allowing its TV application for streaming on a consumer
device connected to a television.
The agreement between the two companies will allow Time
Warner's subscribers to stream TWC TV services via Roku boxes,
which will feature up to 300 live television channels. Time
Warner Cable's video service customers, who already own Roku
boxes don't have to pay any additional fees for the service.
Additionally, the deal will allow Time Warner Cable's
customers to access live TV and Internet-based video from
streaming sites such as
) YouTube using the same set top box.
Online video streaming service providers like Netflix Inc.
), etc. have become sources of potential threat to the
traditional cable TV operators as they offer an extremely cheaper
source of TV programming.
The demand for streaming service over-the-top ('OTT') set top
box market has been growing for quiet some time and has been
mostly dominated by
) Apple TV and Roku. The space is expected to get more
competitive as Google TV and
) are expected to enter the OTT set top box market.
Saratoga, California-based Roku develops and supplies set top
boxes, when adhered to the monitor provides clear access to more
than 700 channels including online streaming companies like
Netflix and Hulu.
We view this agreement as a win-win for both the companies.
This is going to be a milestone deal for Roku as it is
expected to increase the sales of its set top device, Roku
Simultaneously it will allow Time Warner to popularize its TV
application and capture the gaining popularity of streaming
services. Time Warner Cable recently launched a video streaming
application for Apple's iPad, iPhone and iPod touch
We believe that availability of such services on an open
platform will allow Time Warner Cable to provide both traditional
cable and streaming service under the same platform thereby
reducing customer churn.
We maintain our long-term Neutral recommendation on Time
Warner Cable. Currently, it holds a short-term Zacks #3 Rank
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