Charter details ‘modern’ linear/streaming deal with ViacomCBS

Charter recently renewed its carriage agreement with ViacomCBS and looped the company’s streaming video services in for future distribution to Spectrum customers.

During today’s earnings call, CEO Tom Rutledge provided some further details about what he called a modern agreement that recognized that the video business is changing.

“It addressed our legacy relationship and it addressed our new direct-to-consumer relationship with ViacomCBS. It’s different than prior agreements because they have direct-to-consumer products and those were integral to the discussion,” he said. “It’s consistent with our view that we’d like to be part of the marketplace and to enhance our video relationship with customers through managing transactions for them.”

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The new deal announced earlier this month includes licensing for Paramount+, Pluto TV, BET+ and Noggin, which Charter said will factor into its strategic interests around offering an “aggregated video store.”

While Charter continues to explore new ways to sell video products to its customers, it’s still managing to keep its traditional video subscribers low relative to peers like Comcast and AT&T. Charter lost 50,000 video subscribers during the quarter after dropping 63,000 residential customers but adding 13,000 business customers. The company ended the quarter with 16.01 million total video subscribers.

Rutledge attributed his company’s video subscriber trends to selling different video packages that he said are more tailored to consumer needs. He said that newer direct-to-consumer products in the market are churning at higher levels and that it’s leading to a “re-adoption process” for Charter’s video products.

“To some extent, we think our video business is stabilizing. But, on the other hand, the fundamentals trends haven’t stopped, which is that prices are being continuously passed through to consumers and there’s real pressure on the total cost of the bundle,” he said. “The reason we’re relatively better is that we’ve been moderate with our pricing and we’ve created new packages that cost less.”