Charter Bets on New Name
Following in the footsteps of Comcast and Cablevision Systems, Charter Communications intends to start pitching its video and broadband services under a new brand name early next year.
Charter Communications Inc. , the fourth largest MSO in the US, said it will begin marketing its core cable services under the Charter Spectrum banner some time during the first quarter of 2014. The re-branding will be rolled out in conjunction with Charter's upgrade of its markets to all-digital networks, a process that has shifted into high gear and is expected to be completed by the end of next year. (See Charter Rolls Out TV Everywhere.)
Charter is thus heading down the same paths as Comcast Corp. (Nasdaq: CMCSA, CMCSK) and Cablevision Systems Corp. (NYSE: CVC), which have also introduced new brand names for their cable products because of poor reputations for customer service. Cablevision adopted Optimum as its brand more than a decade ago while Comcast started using Xfinity as its moniker of choice in 2010. Both companies have enjoyed great success with the re-branding.
But, unlike the other two big US MSOs, Charter will keep the parent company name in its new brand. So the impact of its re-branding efforts could be more muted.
The re-branding move comes just a week after Charter CEO Tom Rutledge strongly hinted that a new moniker for the company's products was in the works. Speaking on the MSO's third-quarter earnings call last week, Rutledge said the time had come for Charter to re-brand itself because of its all-digital push, the corresponding doubling of its HD channel lineup, its recent introduction of a TV Everywhere service, and other efforts to beef up its video product portfolio. "It's time for us to more aggressively promote Charter video," he said.
Indeed, hampered by high debt, tight budgets, and a lack of major metro markets, Charter has lagged behind its big MSO counterparts on the video front for years. At least partly as a result, Charter, which closed the third quarter with nearly 4.2 million video subscribers, now delivers video services to just 34 percent of the homes that it passes, far lower than most major cable operators. It also has 1.3 million broadband-only customers, up 26 percent from slightly more than 1 million a year ago. That number is relatively high in an industry that has emphasized double-play and triple-play bundles for most of the the past decade.
"Our broadband-only growth has been greater than I thought it would be," Rutledge said, noting his surprise. In large part, he attributed this development to Charter's "inferior" video portfolio over the past few years.
Yet the Charter chief views the company's rapidly growing non-video customer base as an asset as well, because it gives the MSO a sizable target audience for its new video products. "I see the 1.3 million broadband-only customers as a real selling opportunity for us," he said.
The re-branding move also comes as Charter seeks to burnish its customer service reputation, which has also lagged behind the service reputations of other major MSOs. Despite some recent improvements on that scale, Rutledge has set his sights higher.
"We've gone from worst to average customer service," he said. "I think we need to be more than above average."
— Alan Breznick, Cable/Video Practice Leader, Light Reading