Charter says less than 5% of sales are single-play video

Charter's updated logo
During Charter’s most recent quarter, the company pulled in nearly $4.3 billion in revenue from video services, almost half of the company’s total residential revenues. (Charter Communications)

Charter CFO Chris Winfrey said that while video still represents a big chunk of his company’s overall revenues, less than 5% of sales come from single-play video.

That means most of Charter’s cable video subscribers are picking it up along with either broadband, phone or both.

“We like video. I know that’s not really a popular thing to say. On one hand I can sit here and tell you that video has a declining margin and has had that for the past 10 years. And yet, despite all that, we’ve been able to continue to grow our total revenue and EBITDA because we use video as a way to drive connectivity,” said Winfrey during a Deutsche Bank investor conference.

Sponsored by Signiant

BIG FILES, BIG CHALLENGES: Why Dropbox, FTP and shipping hard drives are no longer viable for media and what you can do about it

Large file transfer software — SaaS that makes it easy to move any size file with speed and security, no matter over what distance — is essential to your media business. Read this paper to learn why you should move on to a next-generation solution.

During Charter’s most recent quarter, the company pulled in nearly $4.3 billion in revenue from video services, almost half of the company’s total residential revenues. Charter has about 10.7 million single-play customers, compared with about 6.5 million double-play and about 8.6 million triple-play.

Despite video still driving a lot of revenue for Charter, Winfrey said the company doesn’t necessarily sell video. Rather, it sells connectivity services and video is an application that goes along with it. But when asked whether Charter would launch its own streaming service away from its managed network, Winfrey suggested it wouldn’t be sound business.

“I don’t think there’s any margin in going and doing that. I don’t think there’s any margin in anybody who’s doing that today. Unless you have a connectivity service attached to it, anybody who’s running an OTT service today—and by that I’m specifically talking about virtual MVPDs—from all the work that we’ve done, we think all of that is being sold at a loss,” Winfrey said.

RELATED: Charter CEO says video is no longer a standalone product

Winfrey’s comments today echo those made by Charter CEO Tom Rutledge in July, when he said that video alone was no longer a sustainable business.

“We’re going to use video aggressively. But what we’re saying is, it really isn’t a standalone product in its current situation,” Rutledge said during an earnings call.

Rutledge said that video consumption is still fairly high but that virtual MVPDs and TV Everywhere apps that have weak security and allow many users to access their content lineups for free, or password sharing on OTT products, may be causing those numbers to rise while still eating into the traditional video distribution business.

“All of that is putting pressure on traditional video but at the same time, [traditional video distribution] is the perfect way of selling content so it isn’t just going to go away overnight. How fast? I don’t know. But I think we can manage our way through it and use video to drive relationships for the foreseeable future,” Rutledge said.

Suggested Articles

SK Telecom and Sinclair Broadcast Group launched Cast.era, a U.S.-based joint venture focused on cloud infrastructure for broadcasting.

Nexstar Digital, a wholly owned subsidiary of Nexstar Media, entered into a multiyear partnership with Mediaocean and its Connect Partner Program.

Antennas Direct is acquiring Mohu in a deal that will combine the companies’ indoor and outdoor antenna specialties.