Time Warner Cable Inc (TWC), CBS Corporation (CBS): Be the Victor in the Battle Over Content

Page 1 of 2

Note: The original article incorrectly identifies Time Warner Cable Inc (NYSE:TWC) as Time Warner. This has been corrected and Motley Fool apologizes for the error.

“In the midst of chaos, there is also opportunity.”

2,500 years ago, Sun Tzu wrote the Art of War. Its unlikely modern military generals still prescribe to his practices, but there is one battlefield where his guidance is still headed: Wall Street.

Technology will continue to evolve, but the principles of war are timeless. The current battle between content providers and content distributors is no exception. This war isn’t over, and I believe a diligent investor can predict who’s going to come out on top. Here are two battles happening right now and how you can be on the winning side.

Cable digs in

Time Warner Cable Inc (NYSE:TWC)In the battle for content, Time Warner Cable Inc (NYSE:TWC) and CBS Corporation (NYSE:CBS), have both hunkered down into their respective camps. Last week, the two companies’ programming agreement expired without a new contract being signed, and both companies believe the other is in the wrong. Neither will concede ground, and investors may be faced with a prolonged siege.

The argument comes down to re-transmission fees (the rights to re-transmit a signal back to customers). CBS Corporation (NYSE:CBS) is the number one prime-time network in America, and in an internal memo, argued that it is not in the top 10 of Time Warner Cable Inc (NYSE:TWC)’s fee recipients. The second largest cable provider in America, Time Warner Cable Inc (NYSE:TWC), fired back by saying that CBS Corporation (NYSE:CBS) is asking for a fee raise of 600%, a price increase that the rest of the market does not reflect.

While both sides have made their trenches and don’t appear to be moving, a deal must be struck before July 30th or else CBS Corporation (NYSE:CBS) may go dark to Time Warner Cable Inc (NYSE:TWC)’s customers. If you’re worried about trying to get on the winning side of this battle, don’t be overly concerned. I believe both companies will be victorious.

Sun Tzu said it best when he wrote “There is no instance of a nation benefiting from prolonged warfare.” Each company stands to make money on the deal and the siege shouldn’t last long. The way each company’s stock has performed, investors can even profit on both fronts of this battle.

The companies release earnings soon and things should be looking up for both factions. CBS Corporation (NYSE:CBS)’s board has authorized a $6 billion dollar buyback program to increase shareholder value, and Time Warner Cable Inc (NYSE:TWC) has reported strong earnings in 3 of the last 4 quarters.

Contents shifting alliance

Last month, the biggest names in content and streaming went head to head. Streaming giant Netflix, Inc. (NASDAQ:NFLX) opted to let its contract with Viacom, Inc. (NASDAQ:VIAB) expire. Household Netflix subscribers immediately voiced their concern as Viacom provided Netflix with content such as Dora the Explorer and SpongeBob for younger demographics.

Page 1 of 2
blog comments powered by Disqus
Insider Monkey Headlines
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months Click to see monthly returns in table format!

Lists

The Top 10 States With Fastest Internet Speeds

10 Best Places to Visit in USA in August

Top 10 Cities to Visit Before You Die

Top 10 Genetically Modified Food In the US

15 Highest Grossing Movies Opening Weekend

5 Best Poker Books For Beginners

10 Strategies Hedge Funds Use to Make Huge Returns

Top 10 Fast Food Franchises to Buy

10 Best Places to Visit in Canada

Best Summer Jobs for Teachers

10 Youngest Hedge Fund Billionaires

Top 10 One Hit Wonders of the 90s

Fastest Growing Cities In America

Top 10 U.S. Cities for Freelancers

Top 9 Most Popular Free iPhone Apps

Top 10 Least Expensive Private Business Schools in the US

Top 15 Most Expensive Countries in the World – 2014

Top Businesses to Invest In

Top 5 Things You Might Be Doing Wrong With Your Business

Top 5 Strategic Technology Trends in 2014

Top Rags to Riches Stories

Parenting Behavior That Promotes Future Leaders

Top 5 Mistakes Made by Small Businesses

Top 5 Most Common and Potentially Devastating Financial Blunders

Top 5 Highest Paying Jobs for Web Designers

Top 6 Most Respected Professions that Also Pay Well

Top 5 Pitfalls Investors Should Avoid

Top 6 Lawyers and Policy Makers Under 30

Top 6 New Year’s Resolutions for Entrepreneurs

Top 7 Locations to Check in on Facebook

Top 5 Mistakes made by Rookie eBay Sellers

Top 7 eBook Publishers in 2013

Top 6 Health Industry Trends in 2014

5 Lessons for Entrepreneurs from Seth Godin

Top 5 Success Tips from Jordan Belfort – the Wolf of Wall Street

Best Master’s in Finance Degree Programs

Top 6 Earning Celebrities Over 50

The most expensive sports to play

Top 7 Earning Celebrities Under 25

Best 7 Online Courses to Take: Free Finance MOOCs

Top 6 Bad Habits that Promote Failure

20 Most Valuable Soccer Teams in the World in 2013

12 Most Expensive Countries for Foreign Students

Top 30 Most Influential Women in the World

Top 20 Most Expensive New Year Eve Shows

Top 5 Best Vocational Careers

Top 10 Jobs for 2014 by Salary Gain (Predictions)

Top 5 Digital Trends for 2014

Top 6 Things You Can Do To Increase Your Productivity

Top 9 Trending Smartphones in 2013

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 47.6% in its first year! Wondering How?

Download a complete edition of our newsletter for free!