Light Reading
Reclaiming analog spectrum is just one of the big operational changes underway as Charter looks to duplicate the Cablevision playbook

Charter Sets All-Digital Path for Video

Jeff Baumgartner
LR Cable News Analysis
Jeff Baumgartner
11/6/2012
50%
50%

As Charter Communications Inc. continues to execute the Cablevision Systems Corp. (NYSE: CVC) playbook under new President and CEO Tom Rutledge, an all-digital video migration appears to be near the top of the operator's agenda. (See Can Charter Repeat the Video Feat? and Ex-Cablevision COO Becomes Charter CEO.)

"We intend to progressively move to an all-digital platform over the next two years, starting with seeding the market with boxes today," Rutledge said on the company's third-quarter earnings call Tuesday. That migration will put Charter on the way to reclaiming precious bandwidth "and eventually switching off inferior analog product altogether."

The early phase of this set-top seeding process caused Charter's capex to spike to $488 million in the quarter, versus the $412 million expected by analysts. Rutledge hopes those costs will go down as baseline set-top functionality goes inside tablets, TVs and other connected devices.

Part of Rutledge's thinking while at Cablevision was that he could keep set-top costs down by using a network-based DVR rather than relying on more expensive set-tops with local DVRs. But that's a longer-term play at Charter. "I wouldn't say that we have an immediate capability at Charter to go to network DVR or other cloud-based services like it," Rutledge said. (See Charter Keeps RS-DVR on Sidelines.)

Rutledge did not say precisely how Charter will seed the market with boxes ahead of the switchover. Comcast Corp. (Nasdaq: CMCSA, CMCSK), for example, has deployed millions of low-cost Digital Terminal Adapter (DTA) devices to power its analog reclamation strategy. (See Comcast's $1B Bandwidth Plan .)

Charter, however, hinted in a waiver request filed with the Federal Communications Commission (FCC) late last week that it intends to use the sort of software-based security system that Cablevision -- Rutledge's former company -- put into play for its all-digital strategy. While at Cablevision, Rutledge envisioned that boxes based on that system could eventually be had for about $50 each. So far, Samsung Corp. is the only box maker that Cablevision has deployed with the new security system. (See Charter Video Plan Good News for Cisco, Samsung and Cablevision Eyes $50 Set-Top.)

"We have a strategy of buying CPE from world-class vendors and trying to get ... in a position where we can buy CPE from multiple providers and therefore get competitive pricing," Rutledge said.

Going all-digital is just one component of a larger strategy Rutledge is using to change Charter's operational model, with the hope of generating a higher rate of cash flow per home passed. That strategy also includes the centralizing of Charter's network operations, and simplifying the pricing and packaging of its video and broadband products.

Financial update
Charter's strategy is the early phases and the results haven't shown up yet in earnings.

Charter posted a third quarter loss of $87 million (87 cents per share) on revenues of $1.88 billion, up 3.9 percent. Analysts were expecting a loss of 44 cents per share and revenues of $1.84 billion.

Charter also lost 73,000 video subscribers, of which 56,000 were basic TV customers. The MSO gained 69,000 cable modem customers and 52,000 voice subs.

— Jeff Baumgartner, Site Editor, Light Reading Cable

(0)  | 
Comment  | 
Print  | 
Newest First  |  Oldest First  |  Threaded View
Educational Resources
sponsor supplied content
Educational Resources Archive
Flash Poll
From The Founder
Is your network built on 'The Old IP,' or are you part of 'The New IP' revolution?
LRTV Documentaries
A Cultural Shift for an OTT World

9|26|14   |   01:41   |   (3) comments


Telcos need to embrace a new approach to partnerships if they are to generate extra revenues quickly and give customers what they want.
LRTV Documentaries
New Skills Needed as Telecom, IT Collide

9|26|14   |   4:07   |   (1) comment


As telecom and IT collide, new technologies are emerging, new skills are needed and new opportunities for women are arising.
UBB Forum News
Do IP Networks Need An Overhaul?

9|25|14   |   02:01   |   (0) comments


As traffic levels ramp, do IP networks need new technologies and topologies?
LRTV Documentaries
Sprint Wields Its Influence in the Valley

9|25|14   |   3:09   |   (11) comments


Anne-Louise Kardas, Sprint's connection to startups in the Valley, explains how telcos can be innovative and find new opportunities with partners.
LRTV Documentaries
SDN, NFV & The Future of XO's Network

9|25|14   |   3:47   |   (1) comment


XO Communications COO Don MacNeil explains how cloud, SDN and NFV are altering its network requirements as well as changing data centers of the future.
UBB Forum News
The OTT Conundrum

9|24|14   |   01:39   |   (0) comments


What is holding back prosperous partnerships between telcos and the OTT players?
LRTV Documentaries
Putting Broadband to Work

9|24|14   |   01:26   |   (0) comments


High-speed broadband network rollout is key to telco strategies, but it's what happens after the network is built that counts.
Light Reedy
Light Reading's Women in Telecom Recap

9|24|14   |   0:55   |   (4) comments


Our first Women in Telecom breakfast was a huge success, and we hope you'll join us in London for the next event on November 6.
UBB Forum News
Monetizing Ultra-Broadband

9|24|14   |   01:43   |   (2) comments


Ultra-broadband networks need to be built, with fiber-to-the-premises the ultimate goal, but they need to be monetized, too.
LRTV Huawei Video Resource Center
Sales Director of INIT on Plug & Play Switch Devices

9|19|14   |   3:21   |   (0) comments


INIT Italy uses both the Huawei S5700 and S7700 series switches for the campus LAN environment. Sales Director Andrea Curti says their company chose these Huawei devices over others because of their performance, flexible scalability and plug-and-play features.
LRTV Huawei Video Resource Center
Saudi Arabia Upgrades Vocational Training System

9|19|14   |   3:31   |   (0) comments


The Technical and Vocational Training Corporation (TVTC) has 100,000 students, 150 government-owned institutions and oversees 1000 private institutes. The CIO of TVTC explains that Huawei devices have allowed them to manage multiple datacenters using just one software program, scientifically tracking the progress of students and teachers, saving them millions.
LRTV Huawei Video Resource Center
Huawei's Media Solutions Are Here to Stay

9|19|14   |   4:35   |   (0) comments


The current media revolution requires rapid upgrades in technology. New formats (HD, 3D, 4K etc.) and the subsequent explosion of file sizes demand sophisticated network and storage architecture. Social media and the multiple distribution channels require a robust asset management system. Gartner analyst Venecia Liu speaks about the current technological trends in ...
Upcoming Live Events
October 29, 2014, New York City
November 6, 2014, Santa Clara
November 11, 2014, Atlanta, GA
December 2, 2014, New York City
December 3, 2014, New York City
December 9-10, 2014, Reykjavik, Iceland
June 9-10, 2015, Chicago, IL
Infographics
Half of the world's population will be connected to the Internet by 2017, but not just by smartphones and desktops.
Hot Topics
Facebook Pokes Around LTE Direct
Sarah Reedy, Senior Editor, 9/25/2014
Sprint Wields Its Influence in the Valley
Sarah Reedy, Senior Editor, 9/25/2014
Is Redbox Instant Shutting Down?
Mari Silbey, Independent Technology Editor, 9/30/2014
US Ignite Cultivates Gigabit Apps
Jason Meyers, Senior Editor, Utility Communications/IoT, 9/25/2014
Like Us on Facebook
Twitter Feed