Mere weeks after CEO Tom Rutledge made it clear that he doesn't love the idea of launching an over-the-top video service, Charter is now reported to be in talks with cable networks about creating an inexpensive streaming bundle -- $15 to $20 per month -- that excludes major sports channels. The news, which comes from a report by The Wall Street Journal, ties Charter to cable networks that include A&E, AMC, Discovery, Scripps and Viacom.

A Charter spokesperson said the company would not comment on the report.

The possibility of Charter Communications Inc. creating an online skinny-bundle service sounds at once contradictory to the company's party line and entirely plausible. Although Charter executives emphasize that they don't want to cannibalize their higher-value services, they've also declared that they have the technical capacity, and in some cases the content rights, to introduce an OTT product. Further, Rutledge acknowledged in Charter's recent earnings call that "there is a general decline in the MVPD marketplace that is mostly price-driven," suggesting that he's keeping a wary eye on the economics to determine if and when it becomes necessary to offer a cheaper pay-TV bundle. (See Charter Remains Cautious as Earnings Lag.)

The Charter CEO may be one of the most cautious cable executives in the industry, but he's also one of the most pragmatic.

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There's another piece of evidence that lends credibility to the skinny-bundle rumor. Charter recently announced an agreement with AMC Networks Inc. that gives the cable company the exclusive rights to distribute original AMC programming during a temporary release window. (See Charter Does Exclusive Content Deal With AMC.)

Charter could use that content as a way to stem further losses from its traditional set of video subscribers, but it could also use the programming to build a new revenue stream much the way CBS Corp. (NYSE: CBS) has done with its CBS All Access product. If Charter bundled the AMC content with shows from other cable networks as well, it could conceivably create a new package that doesn't cannibalize its existing services, but rather adds a new source of income.

Whatever Charter decides to do, it does have some ground to make up, both in terms of the OTT competition already on the market, and in terms of the video subscribers it continues to shed from its traditional customer base. Last quarter, the company lost 100,000 video subs. Most were in legacy Time Warner Cable markets, but legacy Charter regions also reported losses.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading