In an effort to boost its ‘TV Everywhere’ service, Time Warner Cable Inc. (TWC - Analyst Report), the second-largest cable operator in the U.S., is joining hands with Media giant Viacom, Inc. (VIAB - Analyst Report) to view popular channels like BET, COMEDY CENTRAL, MTV, Nickelodeon, Spike and VH1 on customers PC’s, tablets and smartphones at no extra cost.
The subscribers of Time Warner Cable can easily access the Viacom channels by visiting the Viacom site and logging into the site through Time Warner Cable ID.
Growing popularity of online video streaming companies like Netflix Inc. (NFLX - Analyst Report) and Hulu Inc. have induced other pay TV operators to offer live TV viewing options to its subscribers. This is expected to not only help these pay TV operators to counter threat arising from the online video streaming companies but will also offer greater flexibility to its subscribers to watch their favorite TV shows whenever they want.
Higher proliferation of tablets and smartphones, coupled with rollouts of high speed internet services has further elevated the demand for flexible TV viewing options for the subscribers. To offer such enhanced services to its customers, Time Warner Cable is continuously teaming up with different network giants to view their popular TV shows online through multiple devices.
Last year, Time Warner Cable faced huge criticism from most media companies for launching an application, which allowed streaming of TV shows on iPad devices. It also faced lawsuits from Viacom for launching such applications, which will violate the program distribution rights of most media companies.
However, things are changing as more network companies are teaming up with cable companies to provide the live streaming of TV services to their subscribers. Therefore, the latest deal between Time Warner Cable and Viacom seems to be a win-win situation for both the companies in terms of customer retention as well as audience expansion.
We maintain our long-term Neutral recommendation for Time Warner Cable Inc. Currently, it has a Zacks#3 Rank, implying a short-term Hold rating on the stock.