Charter introduced the video packages and new DVR add-on component on Wednesday and has made them available in all markets, a spokeswoman confirmed. It's not yet known if or when Charter's new strategy will take advantage of the MSO's partnership with TiVo Inc. (Nasdaq: TIVO), which is off to a slow start. (See Charter Picks First TiVo Market .)
The DVR strategy is one of Charter's first major moves since Tom Rutledge started as CEO in February. (See Ex-Cablevision COO Becomes Charter CEO.)
It also represents an ironic counterpoint to Rutledge's former company, Cablevision Systems Corp. (NYSE: CVC), which was weaning itself off of set-tops with integrated DVRs, instead deploying a network DVR service with less-expensive client devices. A network DVR isn't high on Charter's priority list. (See Charter Keeps RS-DVR on Sidelines, Cablevision Eyes $50 Set-Top and Cablevision's Network DVR Debuts in the Bronx .)
Charter didn't comment about how the new DVR plan will affect its current multi-room DVR offering, but there's some evidence that the company plans to do away with that option. Charter says a four-DVR set-up provides "up to 780 hours" of storage.
Charter's video penetration (34.6 percent) significantly lags that of cable operator peers, such as Comcast Corp. (Nasdaq: CMCSA, CMCSK) (42.5 percent) and Time Warner Cable Inc. (NYSE: TWC) (42.6 percent), so its past troubles (i.e. bankruptcy) have put in a strangely advantageous spot -- being under-penetrated could present it with some decent opportunities to increase its video customer base, if it can find the right product and pricing mix.
Charter's shown some progress even without the new video tiers, having added 20,000 video subs in the first quarter. It's doubtful it can repeat that in the second quarter, which is historically cable's worst as college students and snowbirds move and cancel cable service. (See Can Charter Repeat the Video Feat? )
Here's a summary of the new video packages, which all support the mega-DVR offer and Charter's VoD library:
- Charter TV Select: Basic service and expanded service for $59.99 per month.
- Charter TV Silver: Basic service, expanded service, one tier of digital channels, plus HBO, Cinemax, and Showtime for $79.99 per month.
- Charter TV Gold: Everything in the Silver package, plus a larger set of digital channels, TMC, Starz, Encore and EPIX, for $99.99 per month.
In a recent research note about the new packages, ISI Group Inc. analyst Vijay Jayant said Charter's aim is to drive higher bundles and advanced services. According to his analysis (see this snapshot), it appears that the new low-end tier, without any big add-ons, is more expensive than its predecessor, while the opposite is true if customers take the high-end packages or go with the four-DVR set-up.
— Jeff Baumgartner, Site Editor, Light Reading Cable