Charter Communications has launched its first App Store as part of a major effort to promote its broadband and video services by offering not only cable channels but also easy access to a range of streaming platforms.
With its “Seamless Entertainment” campaign, led by Tracy Morgan in a series of cheeky spots, Charter aims to position itself much like Amazon Prime Video and Roku do with subscribers as their portal to subscriptions to Netflix, HBO Max, Disney+, Paramount+ et al.
Charter hosted an event on October 9 in Manhattan as part of Advertising Week to showcase the new features and positioning of its pitch to customers. The goal is to convince consumers that Charter can be a one-stop shop for the high-performance broadband service required to watch all those bandwidth-hungry streamers. It also seeks to explain the complex concept that Charter customers who currently subscribe to traditional TV packages also have access via authentication to major streaming apps. This includes the ESPN app that Disney launched in August.
The ESPN streamer offers a large amount of games and shows that don’t run on linear ESPN. But anyone who pays for linear ESPN through a traditional Charter cable package can access the streaming app at no extra cost. The problem for Charter and ESPN is that most traditional cable consumers aren’t aware of it.
The landscape of how TV packages are bought and sold has changed significantly over the past 15 years, since Netflix enhanced its streaming menu with acquired and original series. Charter’s efforts are part of a gradual industry return to bundled entertainment packages from multiple programming sources. Cable operators such as Charter and its biggest rival, Comcast, are working to correct past customer service mistakes in order to sell themselves as the most cost-effective option for consumers.
Chris Winfrey, Charter’s chairman and CEO, sees the App Store as a channel for consumers to access a broader video and broadband package provided by Charter, once they become aware of the cost of paying for streaming apps a la carte. In all respects, the pay TV sector is moving back toward consolidation.
“We have a much larger distribution platform than our video subscribers, because the broadband connectivity service we provide offers several things. One is the opportunity to think about the video business a little differently. But we also have 30 million broadband customers, the majority of whom no longer have video, and that gives us the opportunity to sell a la carte. To a much broader base of broadband customers, we will sell AMC+, ESPN, Paramount+ and HBO Max. ” said Winfrey. “Whatever the customer wants to have, we can offer it in this video app store, and maybe, ideally, one day they’ll say, ‘Look, that’s a lot of money. For $100 I could include the video in this frame.”
At the Spectrum event, Winfrey was pressed in a question-and-answer session with CNBC reporter Alex Sherman about miscalculations over the past decade and a half that have led U.S. cable operators to lose about 35 percent of their customers. Winfrey, a 15-year Charter veteran who was named CEO in December 2022, highlighted the sea change in Hollywood’s content licensing strategies as streaming platforms had big budgets for acquired and original series. This happened gradually, but it hurt programmers and distributors in the long run.
CNBC’s Alex Sherman, Charter Chris Winfrey, AMC Kri of networkssESPN’s Tin Dolan and Jimmy Pitaro
“The idea that you could sell content that was not protected from an authentication point of view, without advertising, without branding, [and thinking] it was going to be additional subscribers, it was a big one
mistake,” Winfrey said. “And once that happened and you started using entities that for long periods of time could sell your content at a discounted rate and take a loss for a long period of time, the cat was out of the bag.” Winfrey noted that Disney et al “naturally started going after direct-to-consumer content and grabbing the content.” And the fact that Netflix’s being a Wall Street darling has encouraged the spending boom that has also upended Hollywood.
Cable still has an image problem, Winfrey acknowledged, but it’s now drawing the most heat from investors because its broadband service remains fundamental to residential and business customers. Essentially, Hollywood learned the benefits of distribution partnerships rather than going it alone with direct-to-consumer divisions that racked up huge startup costs.
“And now we look pretty good, because we can piece it together in a way that I think is good for the consumer, does our best for the programmer’s bottom line as well, and gives us utility value,” Winfrey said.
Charter’s presentation also highlighted enhancements to the voice remote service that Charter developed in tandem with Comcast. Charter and Comcast also partner on the Xumo Stream Box platform designed to allow consumers to easily move from a linear to a streaming platform.
Also joining Winfrey at the event were Jimmy Pitaro, head of ESPN, and Kristin Dolan, CEO of AMC Networks. AMC and ESPN have worked closely with Charter in recent months to strike distribution deals integrating apps such as Disney+, Hulu and ESPN and premium drama service AMC+. Programmers must integrate streaming applications to provide value to cable distribution partners. The days of getting big automatic rate increases with every new cable transaction are long gone.
The conversation between Winfrey, Dolan and Pitaro highlighted how the pay TV market has diversified with the introduction of more options, including the rise of free streaming channels and apps. Whether small (AMC) or large (Disney), programmers need the support of MVPDs because the ability to bring together disparate services and content from multiple providers makes for a more compelling consumer offering.
“There are two different customers, a streaming-only customer or a broadband-only customer who takes streaming products is one type of customer, and then someone who still watches traditional linear for the most part.
part. The Venn diagram is not as big as you might think,” Dolan said.
Pitaro hailed the “continuous entertainment” initiative as the right approach at a time of rebuilding the television ecosystem. The end result of a difficult negotiation that included a nearly two-week blackout of Disney Channels on Charter in 2023 was a much closer working relationship between the two.
Even though ESPN first went standalone, “we also decided internally that we were going to stay committed to the pay-TV environment, and the best way to demonstrate that commitment was to add value once we launched,” Pitaro said. “We’ve made all the product enhancements of the ESPN app available to Charter subscribers. So fire up the ESPN app, you authenticate it and you have access to deeper customization, all the interactive features that we now have in the app, like Fed Fantasy, stats integration, trade integration, everything that’s available to the Charter subscriber. And so this is our way of adding more value to that, to that environment.”
Here is one of Tracy Morgan’s spots which aims to translate Spectrum’s message to consumers:
