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Time Warner Cable Sees Rivals Join in Bidding

NEW YORK TheStreet.com -- Time Warner Cable (TWC) is in play, its name likely to slip under the waves of its acquirer.

Last week we heard that Charter Communications (CHTR), then Comcast (CMCSA), were lining up bids for the country's second-largest cable provider. Now it seems both may move together.

The moves are not being made out of strength, but weakness. Time Warner Cable lost 191,000 customers during the last quarter, This was partly due to an argument over rights costs with CBS (CBS) but not entirely.

MoffettNathanson Research says there is a general move toward "cord cutting," people shedding cable subscriptions because they cost too much or they can't see the value. Cable services are regularly seen as the companies Americans dislike the most.

The number of cable subscribers peaked recently at just over 100 million and is now headed down, as cash-strapped consumers turn to DVDs and streaming entertainment to tablets on free WiFi connections. Cable's losses are not being made up with Internet broadband subscriptions.

Cable alone lost 687,000 customers in the last quarter. While satellite TV and phone companies gained, the whole industry had a net subscriber loss of 113,000.

Internet services like Hulu, Amazon (AMZN), Netflix (NFLX) and Aereo stream shows on-demand, charging under $10/month. Amazon offers some services free to those who buy its $79/year shipping service. Google (GOOG) has only just begun offering paid services on top of YouTube.Comcast has a strategy to get out of this box.

It dominates the market for broadband Internet service, which you need to get Netflix, so it has begun bundling data with Disney (DIS) Watch ESPN sports service. Internet subscribers get Watch ESPN whether they want to or not, and pay for it whether or not they watch it -- just like cable.

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