Light Reading

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 sits down at CES with the head of Cisco's service provider video business, Conrad Clemson, to discuss how NFV and cloud security relate to video, the challenge of managing 4K/8K traffic, the global expansion of Netflix and virtual reality.
Flash Poll
Live Streaming Video
CLOUD / MANAGED SERVICES: Prepping Ethernet for the Cloud
Moderator: Ray LeMaistre Panelists: Jeremy Bye, Leonard Sheahan
LRTV Documentaries
EANTC Tests Nokia IP Routing & Mobile Gateway VNFs for Real World Deployment

2|9|16   |   5:08   |   (0) comments


Nokia obtained validation of its virtualized router and virtualized mobile gateway capabilities through rigorous testing performed by EANTC. The results set a new industry benchmark for outstanding performance, scalability, resiliency and manageability. Nokia VNFs are ready for telco cloud deployment, so that service providers can accelerate mobile, business and ...
Between the CEOs
CEO Chat With Level 3's Jack Waters

2|8|16   |   26:15   |   (1) comment


Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
LRTV Custom TV
The Composable Telco

2|8|16   |   24:46   |   (0) comments


Heavy Reading's Principal Analyst Caroline Chappell presents the keynote at Light Reading's 2020 Vision Executive Summit in Dublin.
LRTV Custom TV
Join Us at the Digital Operations Transformation Summit

2|4|16   |   03:52   |   (0) comments


The Digital Operations Transformation Summit on February 21, 2016 at the Crowne Plaza Barcelona Fira Centre will bring together 50 senior executives to engage in a unique debate on the opportunities and challenges presented by the transformative evolving digital landscape. RSVP now at events@lightreading.com.
LRTV Custom TV
Making the Test: ADVA Ensemble Connector vs. Open vSwitch

2|4|16   |   01:28   |   (0) comments


Light Reading, in partnership with EANTC, recently tested ADVA's Ensemble Connector, which replaces open vSwitch and offers carrier-grade capability and interoperability. The test results strengthen ADVA's credibility as a provider in the virtualization space.
LRTV Custom TV
Bridging the Gap Between PoCs & Deployment in NFV

2|4|16   |   31:50   |   (0) comments


Charlie Ashton of Wind River presents the keynote at Light Reading's 2020 Vision executive summit in Dublin.
Between the CEOs
CEO Chat With Mike Aquino

2|3|16   |   17:34   |   (0) comments


The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Shades of Ray
MWC: Buckle Up for 5G & the IIoT

2|2|16   |   02:28   |   (0) comments


This year's Mobile World Congress looks set to be a 5G land grab and a chance to get down and dirty with the Industrial Internet of Things (IIoT) – but what will the 5G discussions actually be about?
LRTV Custom TV
Case Study: Building China's Next-Gen TV Networks

2|2|16   |   5:01   |   (0) comments


With over 2 billion viewers worldwide, Shenzhen Media Group is one of China's largest content producers. By partnering with Huawei and Sobey, SZMG was able to modernize media operations with the Converged News Center, a production studio that is a model for next-generation workflows.
LRTV Custom TV
Quad Channel Modulator Driver with 46 Gbaud Capability from MACOM

1|28|16   |     |   (0) comments


MACOM's MAOM-003427 is the industry's first surface-mount modulator driver with 46 Gbaud capability to support next generation 200G and 400G applications.
LRTV Custom TV
Video Infographic: Validating Cisco's NFV Infrastructure

1|26|16   |   02:24   |   (1) comment


We all know that the network of the future will be virtual, but when will virtual become a reality? This video infographic covers the four key areas in which Light Reading, in partnership with EANTC, tested Cisco's NFV infrastructure: performance, reliability, multi-service capabilities and single pane of glass management.

For the full report, see

Between the CEOs
CEO Chat With Phil McKinney, CableLabs

1|22|16   |   13:36   |   (1) comment


At CES in Las Vegas, we met with Phil McKinney, CEO of CableLabs. Phil provides an update on the rollout of DOCSIS 3.1, his views on the future of open source and how consumer interest in virtual reality could affect network traffic.
Upcoming Live Events
March 10, 2016, The Cable Center, Denver, CO
April 5, 2016, The Ritz Carlton, Charlotte, NC
May 23, 2016, Austin, TX
May 24-25, 2016, Austin Convention Center, Austin, TX
All Upcoming Live Events
Hot Topics
Google's 5G Radio Ambitions Are Expanding
Dan Jones, Mobile Editor, 2/5/2016
Cincinnati Bell Joins Weight Watchers Club
Alan Breznick, Cable/Video Practice Leader, 2/5/2016
Yahoo & Verizon Sitting in a Tree...
Brian Santo, Senior editor, Test & Measurement / Components, Light Reading, 2/8/2016
Vodafone: Flexible Work Policies Boost Profits
Sarah Thomas, Editorial Operations Director, 2/8/2016
It's Time to Integrate OTT Video
Alan Breznick, Cable/Video Practice Leader, 2/8/2016
Like Us on Facebook
Twitter Feed
Webinar Archive
BETWEEN THE CEOs - Executive Interviews
Light Reading CEO and founder Steve Saunders sits down with Level 3 Communications' CTO Jack Waters to discuss hot topics like virtualization, 4K and the future of telecom...
The former CEO of Overture Networks, Mike Aquino, discusses why truly open virtualization solutions provide service providers with the greatest choice.
Animals with Phones
Retro Is the Way to Be Click Here
Some animals are too cute for smartphones.
Live Digital Audio

Broadband speeds are ramping up across Europe as the continent, at its own pace, follows North America towards a gigabit society. But there are many steps to take on the road to gigabit broadband availability and a number of technology options that can meet the various requirements of Europe’s high-speed fixed broadband network operators. During this radio show we will look at some of the catalysts for broadband network investments and examine the menu of technology options on offer, including vectoring and G.fast for copper plant evolution and the various deployment possibilities for FTTH/B.