Changes Ahead for New Charter Markets
It appears Charter CEO Tom Rutledge is making good on a promise to shake up the pricing and packaging of cable products in legacy Time Warner Cable and Bright House Network markets. And some customers may not be happy with the changes.
According to a series of marketing slides apparently leaked on a DSLReports user forum, Charter Communications Inc. is looking to consolidate its cable services into three tiers under the Spectrum brand name. Those include Spectrum TV Select for $65 per month, Spectrum TV Silver with additional premium channels for $85 per month, and Spectrum TV Gold with yet more premium channels (including NFL Redzone) for $105 per month. All prices are for standalone TV service without bundled Internet connectivity.
It's not the prices that are likely to upset customers, however.
Although Charter has not yet confirmed the information (Light Reading will update this story once Charter responds), it appears that the cable company plans to drop a Whole House DVR service that was previously offered by both TWC and Bright House. The multi-room feature allows subscribers to access programs originally recorded on one DVR on any other connected set-top in the home.
If the leaked marketing documents are correct, customers who have Whole House DVR now will have to move to another plan without the feature as the Spectrum TV packages are introduced.
Rutledge has made no secret of his plan to simplify cable service offers across legacy TWC and Bright House markets. In fact, Rutledge stated earlier this month on the Charter earnings call that "the pricing and packaging and the variability of offers is the most interesting opportunity to fix quickly." He also added that "there's a lot more complexity there than even I thought was there, all of which means there's more upside." (See Post Acquisitions, Charter Posts Solid Q2.)
But neither Rutledge nor any other Charter executive to our knowledge has previously mentioned getting rid of video features like the in-home networked DVR solution.
In a Charter presentation from May 2015 regarding the TWC and Bright House acquisitions, the company instead focused on "a quicker rollout of advanced video technology." Charter was referring to transitioning legacy analog video markets to all-digital video delivery, and indeed that move is still a part of the cable company's plan for TWC and Bright House markets. In fact, Charter says it will upgrade the user experience for new all-digital customers by moving them to a two-way set-top platform rather than a one-way digital terminal adapter as some cable operators including Time Warner Cable have used in the past. Charter expects the entire process of migrating to all-digital systems will be complete by 2018.
However, a faster and potentially smoother transition to all-digital cable isn't likely assuage the power users who currently take advantage of multi-room DVR service. For many years Verizon Communications Inc. (NYSE: VZ) was the only US pay-TV provider to offer a whole-home DVR feature, but in recent times, most of the largest cable operators have followed suit. Charter offered its own multi-room DVR service once upon a time, but quietly discontinued it in 2012 or 2013.
On a related note, it also appears Charter has also veered away from Time Warner Cable broadband upgrades that were on track to deliver speeds up to 300 Mbit/s in select markets. On the company's most recent earnings call, Rutledge acknowledged that TWC's all-digital upgrades (better known under the campaign brand of TWC Maxx), have been put on hold. Those upgrades were paired with a new 300 Mbit/s data service, which may now be on hold as well. Charter previously committed to "embracing TWC's and BHN's rollouts" of a 300 Mbit/s service tier, but its own Internet speeds have topped out at 100 Mbit/s.
Charter will have to deliver speeds of 300 Mbit/s throughout its footprint in New York by 2019 according to merger approval conditions that were imposed by the New York Public Service Commission.
— Mari Silbey, Senior Editor, Cable/Video, Light Reading