Charter CEO navigates shifting video landscape with different tactics

Charter said its video app now has 8 million customers. (Getty Images)

Charter Communications CEO Tom Rutledge said the cable company is using a variety of tactics to navigate the treacherous waters of cable video, including offering non-sports bundles and providing a video application in lieu of a set-top box. “We haven’t done what Charlie Ergen has done, which is to put significant sports holes in the bundled sports product,” said Rutledge.

Speaking at a MoffettNathanson investor conference today, Rutledge said Charter is getting some benefits to its video business via its broadband business and also from “converting satellite customers.”

In its recently reported first-quarter 2020 results Charter said it lost 70,000 video subscribers, fewer than half of the 152,000 it lost in the same quarter one year ago. The company ended the quarter with 15.55 million residential video subscribers, down 2.5% from where it was the year prior.

RELATED: Charter trims video subscriber losses to 70K in Q1

Charter has also created some non-sports-based skinny packages to increase video subscriptions. Although he said Charter has difficulty doing that in significant way because its video contracts often require it to sell a minimum threshold of sports programming before it can sell other tiers. “We have limitations on how much creativity we can exhibit in marketing and product sets,” said Rutledge. Nevertheless, the company as created some plans such as Latino plans, Pick-10 plans and a product called “Essentials” that allow it to sell lower priced video plans without sports programming.

Rutledge also said that the company’s video app now has 8 million customers. It reduces Charter’s revenue for set-top-box rentals, but it meets a customer demand and allows Charter to be on more devices. “Being an app-based provider will allow us to be a better marketer of new video,” said Rutledge.

The sports dilemma

Charter’s sports package “is still pretty much intact,” said Rutledge, “and we haven’t chosen to try to destroy it or do anything but continue to sell it.” But, as is well-known, a lot of cable video subscribers don’t watch sports and don’t want to pay for sports.

“The downside to selling that is people’s ire about their bill is projected onto us as opposed to the content companies,” said Rutledge. “It’s becoming more of an exclusive product, slowly because of its high cost. We’ve not had any control of our video pricing. But suddenly you’re seeing this secular trend toward a la carte.”