Following reports last month that it was exploring a low-cost skinny bundle TV service, Charter has now confirmed that it's testing Spectrum Stream, "an IP-delivered in-home Cable TV product" with out-of-home streaming features.
Reporter Jared Newman was first to highlight the news for Fast Company, with a link to a Reddit thread showing a promo ad for the service. The online video offering retails for $20 per month with no contract required, and includes add-on options for premium channels and additional on-demand titles.
Charter Communications Inc. did not verify the price point noted in the Reddit post, but a spokesperson did say that the company is testing Stream with "a group of pre-qualified and current Spectrum Internet customers to see if this smaller package resonates with a certain segment of non-video customers. It includes local broadcast channels, 25 popular cable networks and access to thousands of On Demand choices -- along with options for additional news, sports and premium channels -- delivered to connected and mobile devices, without requiring a set-top."
According to the promo flyer, Charter is offering a sports and news tier with Stream that includes ESPN and Bloomberg Television for an additional $12 per month.
Given all of the other skinny bundle products available, why does it matter that Charter is launching its own? Because CEO Tom Rutledge has been loath to introduce any service that would cannibalize the company's higher-margin video products. The fact that he's capitulated now means the cable veteran thinks it's necessary to offer a low-cost service in order to compete with over-the-top rivals.
Rutledge isn't going wild with the new IP service, however. Like Comcast Corp. (Nasdaq: CMCSA, CMCSK) with its tepid introduction of its own Stream product (soon to be rebranded Xfinity Instant TV), Charter isn't making its new product available to everyone. In all likelihood, Charter is hoping to attract new video customers that are only buying broadband service today, while also making it difficult for existing video customers to downsize to the skinny bundle package. (See also The Skinny on Comcast's Skinny Bundle.)
Charter has suffered in the video sector of late, reporting a loss of 100,000 video subs in the last quarter. Many customers haven't been pleased with rate hikes in the wake of Charter's buyout of Time Warner Cable and Bright House Networks. (See Charter Remains Cautious as Earnings Lag.)
That said, Charter has begun to experiment with ways to break out of its video rut. In addition to the trial with Stream, Charter announced a partnership deal with AMC in April to provide some temporarily exclusive content to customers. (See Charter Does Exclusive Content Deal With AMC.)
Comcast too is trying out a new deal with AMC, although it doesn't involve exclusive content. Comcast is planning to offer a $5-per-month upgrade option that gives viewers commercial-free access to current AMC shows.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading