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November 6, 2013
Furiously playing catchup with other major US MSOs, Charter Communications is racing ahead on multiple fronts as it introduces multi-screen video services, carries out all-digital upgrades, and gears up to deploy WiFi service.
Charter Communications Inc. executives spelled out all these initiatives during the company's upbeat third-quarter earnings call Tuesday, which highlighted subscriber and revenue gains on the broadband, voice, and commercial services fronts and lower customer losses on the video front. They also said they plan to boost broadband speeds significantly and roll out new cloud-based interactive video services in the coming year.
In arguably the most notable move, Charter announced the launch of its first TV Everywhere (TVE) service. The new streaming video app offers more than 100 live, linear TV channels from Charter's standard programming lineup. Plans call for adding video-on-demand (VOD) content shortly.
Charter CEO Tom Rutledge said the new TV app, available now on Apple devices and coming later to Android devices, will be limited to video devices inside the home for now. But he said Charter is working diligently to offer out-of-home video viewing as well by striking new deals with content providers.
"There are no technical constraints on where the signal can go," Rutledge said. "The only thing that constrains it from a technical perspective is the contracts that you enter into with content providers."
For now, Rutledge said Charter will use multi-screen video to boost customer satisfaction and retention, like its fellow MSOs. But down the line he's eyeing several different monetization options, including "download-to-go services," "video-on-demand everywhere," and "subscriptions everywhere."
At the same time, Charter is moving ahead with its all-digital network upgrades across the nation as it seeks to boost the number of HD channels it offers and rebrand its lagging video service. After upgrading its systems in California and Michigan over the summer, the MSO is now extending all-digital service to its South Carolina footprint. Plans call for completing all the upgrades by the end of next year.
Rutledge told analysts that the all-digital upgrades will continue to drive up Charter's capital expenditures through 2014. He expects the bulk of that capex to be spent on new digital set-top boxes and other consumer premises equipment (CPE) in the home.
Charter is also moving ahead with its plans to roll out a cloud-based user interface and guide for its video customers. Rutledge said the MSO, which announced plans in June to test the CloudTV platform of ActiveVideo , will start a trial with ActiveVideo and Zodiac Interactive in Fort Worth, Texas in "the next few days." He said the trial, largely using legacy set-top boxes with embedded DOCSIS cable modems, will start with MSO employees and extend to customer homes by the end of the year. (See ActiveVideo Tightens Its Cable Ties.)
If the trials go well, Rutledge said Charter aims to start deploying the cloud-based service commercially late next spring. He said the aim is to offer customers "a consistent, cloud-based user interface across all devices," whether managed or unmanaged. "We're confident it can work and add value," he said.
But if the CloudTV technology should falter, Rutledge appears to have a backup plan in mind. Going out of his way to praise the cloud-based X1 user interface that Comcast Corp. (Nasdaq: CMCSA, CMCSK) is now rolling out throughout the US, the Charter chief said he'd be interested in licensing the technology from his fellow MSO. Comcast has been pitching the idea of licensing X1 to other cable operators. (See Comcast Spreads IP Video Love.)
"We haven't had those discussions with Comcast," Rutledge said. "But they've certainly built a nice piece of art. We respect it, and we respect them."
Turning to broadband, Charter is counting on the all-digital system upgrades to clear much more capacity for its high-speed data services. Rutledge said the MSO is also counting on the new DOCSIS 3.1 spec to aid that cause by the end of 2016. "We have enormous power at our disposal coming down the pike," he said.
Further, Charter, which has been a cable laggard in the WiFi space, aims to dive into the market in 2014 as well. On the earnings call, Rutledge said the MSO will start by launching a WiFi service for commercial customers. Plans call for using wireless gateways with dual SSIDs at commercial locations.
"While we don't have a complete rollout plan yet, we're working on beginning to deploy WiFi at Charter," he said. He didn't say whether the MSO intends to join the national Cable WiFi program that the other five biggest US MSOs have formed with CableLabs . Under that program, cable operators have already deployed more than 200,000 hotspots across the country.
— Alan Breznick, Cable/Video Practice Leader, Light Reading
Cable/Video Practice Leader, Light Reading
Alan Breznick is a business editor and research analyst who has tracked the cable, broadband and video markets like an over-bred bloodhound for more than 20 years.
As a senior analyst at Light Reading's research arm, Heavy Reading, for six years, Alan authored numerous reports, columns, white papers and case studies, moderated dozens of webinars, and organized and hosted more than 15 -- count 'em --regional conferences on cable, broadband and IPTV technology topics. And all this while maintaining a summer job as an ostrich wrangler.
Before that, he was the founding editor of Light Reading Cable, transforming a monthly newsletter into a daily website. Prior to joining Light Reading, Alan was a broadband analyst for Kinetic Strategies and a contributing analyst for One Touch Intelligence.
He is based in the Toronto area, though is New York born and bred. Just ask, and he will take you on a power-walking tour of Manhattan, pointing out the tourist hotspots and the places that make up his personal timeline: The bench where he smoked his first pipe; the alley where he won his first fist fight. That kind of thing.
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