& cplSiteName &

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        ADD A COMMENT
From The Founder
Light Reading today starts a new voyage as part of a larger Enterprise.
Flash Poll
Live Streaming Video
Charting the CSP's Future
Six different communications service providers join to debate their visions of the future CSP, following a landmark presentation from AT&T on its massive virtualization efforts and a look back on where the telecom industry has been and where it's going from two industry veterans.
LRTV Interviews
Fixing IoT Security Is an Ecosystem Challenge

12|9|16   |   05:34   |   (0) comments


Level 3 Communications' Chief Security Officer Dale Drew says service providers, manufacturers and even consumers must combine to halt massive DDoS attacks using IoT devices in botnets. The solution he has in mind includes reputation-based routing by the service provider but also more secure endpoint devices and greater consumer awareness.
LRTV Interviews
Cox Clears $2B in Business Revenue

12|8|16   |     |   (0) comments


Cox's Jeff Breaux discusses how the third-largest US MSO will reach the $2 billion revenue mark this year and plans to hit $3 billion by 2021
LRTV Interviews
Can Cable Climb Upmarket?

12|7|16   |     |   (0) comments


Carol Wilson and Alan Breznick assess cable's prospects for winning more enterprises in a landscape rocked by corporate M&A activity.
Women in Comms Introduction Videos
TalkTalk Exec: Find Your North Star at Work

12|7|16   |   3:38   |   (1) comment


Women need to find their purpose, a professional North Star, and create a personal board for themselves, according to Alex Tempest, director of partners at TalkTalk Business.
LRTV Interviews
Verizon: Beware Unknown Unknowns

12|7|16   |   04:58   |   (0) comments


Chris Novak, director of the Verizon Enterprise Solutions Risk Team, explains that enterprises who don't conduct a thorough audit of their assets often leave some things unprotected because they don't know they exist. Many times these unprotected assets are part of corporate M&A activity but left unshielded they can become a hacker's playground, he tells Light ...
LRTV Interviews
ETSI's CTO Talks NFV, 5G & NGP

12|5|16   |   09:45   |   (0) comments


Adrian Scrase, CTO at standards body ETSI, talks about the various initiatives and specifications developments related to NFV, 5G and NGP (next-generation protocols) that will underpin next-gen networks.
Women in Comms Introduction Videos
Korn Ferry Consultant: How to Find, Cultivate & Be the Best Talent

11|30|16   |   4:10   |   (2) comments


Erin Callaghan, a managing consultant for Korn Ferry Futurestep, shares strategies for companies to improve how they recruit and for women to ensure they don't get lost in the pipeline.
LRTV Custom TV
We Can Make the World More Sustainable

11|29|16   |     |   (0) comments


GeSI is a global e-Sustainability Initiative organization bringing together 40 big multinational companies around the world. According to GeSI's report, information and communication technology can make the world more sustainable. Luis Neves, chairman of GeSI, shared with us his opinion at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
Finding a New Way to Engage Customers & Drive Revenue

11|29|16   |     |   (0) comments


Mobile revenues are declining. Digicel, a player in the Caribbean telecommunications/entertainment space, has found a new way to engage customers and drive revenue. John Quinn, CTO of Digicel, shared with us its story at Ultra-broadband Forum (UBBF2016)
LRTV Custom TV
Do You Really Need Gigabit Infrastructure?

11|29|16   |     |   (0) comments


Altibox is the biggest fiber-to-the-home (FTTH) player and the largest provider of video and TV in Norway. They started out with zero customers in 2002. Now they have close to half a million households and companies attached to their FTTH business. Nils Arne, CEO of Altibox shared with us their story and insight on 5G at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
BTís Openreach Strategy & Its Updates in 2016

11|29|16   |     |   (0) comments


A lot of developments at Openreach this year in terms of strategy and planned investments. Peter Bell, CIO of Openreach BT, shared with us the updates of Openreach at Ultra-broadband Forum (UBBF2016).
LRTV Custom TV
ITU: The Broadband Is Our Future

11|29|16   |     |   (0) comments


At Ultra-broadband Forum, Houlin Zhao, Secretary General of ITU, discussed how important it is for countries, companies and everybody to be working together to help to build the broadband and digital economies (UBBF2016).
Upcoming Live Events
May 16-17, 2017, Austin Convention Center, Austin, TX
All Upcoming Live Events
Infographics
Hot Topics
Cable Nodes Becoming a Choke Point
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 12/5/2016
WiCipedia: After-School Coding, Salary Probing & Pro-Parenthood Companies
Eryn Leavens, Special Features & Copy Editor, 12/2/2016
Consolidated Snaps Up Fairpoint for $1.5B
Iain Morris, News Editor, 12/5/2016
Like Us on Facebook
Twitter Feed
BETWEEN THE CEOs - Executive Interviews
Eyal Waldman, CEO of Mellanox Technologies, speaks to Steve Saunders, CEO of Light Reading, for an exclusive interview about the 100 GB cable challenge, cybersecurity and much more.
Join us for an in-depth interview between Steve Saunders of Light Reading and Alexis Black Bjorlin of Intel as they discuss the release of the company's Silicon Photonics platform, its performance, long-term prospects, customer expectations and much more.
Animals with Phones
A Mobile Safari Click Here
Literally.
Latest Comment
Live Digital Audio

Even when there's a strong pipeline of female talent in the comms industry, it tends to leak all the way to the top. McKinsey & Company says women experience pipeline leakage at three primary points: being unable to enter, being stuck in the middle or being locked out of the top. Each pipeline pain point presents its own challenges, but also opportunities to stop the leak. Wireless operator Sprint is making a conscious effort to improve its own pipeline from new recruits to the C-suite, and it wants the rest of the industry to do the same. In this Women in Comms radio show, WiC Board Member and Sprint Vice President of Enterprise Sales Nelly Pitocco will give us her take on the industry's pipeline challenges. Pitocco, who joined Sprint in May and has spent 20 years in the comms industry, will also offer solutions, share how Sprint is tackling the challenge within its own organization and take your questions live on air.