Charter's Down With OTT
Sees Over-the-Top Video As Opportunity
Mike Farrell -- Multichannel News, 12/6/2010 7:55:14 PM
New York - Charter Communications CEO Mike Lovett told an audience at an investment conference Monday that operators should embrace, not fear over-the-top video, hinting that while the mid-market MSO could have product to address that market in the next several months, it will likely take a next generation of set-top boxes to deliver them.
Lovett, speaking at the UBS Global Media & Communications Conference here Monday, said that over the top video (which some analysts abbreviate as OTT) could be a way for cable ops to sell more broadband and at the same time gain an inroad with a younger demographic. Charter currently is trialing cross-platform capabilities like TV Everywhere, the cable online initiative, and other online content.
Asked about his top three priorities, Lovett said near-term objectives are focused around improving customer services, rolling out switched digital and DOCSIS 3.0 service.
"Longer term in the video business, it's looking at what is going on from an over-the-top standpoint. How do we embrace some of the new services and some of the new providers," Lovett said, adding that Charter is uniquely positioned because it has a relationship with the customer already, and a robust broadband infrastructure.
" It's really about migrating a new platform that brings simplicity to the consumer," Lovett said.
Lovett pointed to Charter's home network service, which has bout 19% penetration of its homes passed. About one-third of new connects opt for the home networking service.
"The fact that consumers are taking that service ... that tells me that the consumer is looking for a solutions provider," Lovett said. "Our focus strategically is ‘How do we put ourselves in a position to have a product portfolio that is innovative and brings the wants and desires to the consumer in a very simple and easy to use fashion.'
"I actually don't think that the set-top boxes that we have today, put us in a position to do that," Lovett continued. "I actually think it is the Achilles heel for the industry today. We have this robust capability that comes right up to the set top and then goes to a box that really puts some barriers in place. We're exploring next-generation television capabilities, and it starts with the user interface on a set-top."
Executive vice president and chief marketing officer Ted Schremp, speaking at the same conference, said that new products centered around viewing content on multiple devices could come as early as next year.
"We're putting the finishing touches on the strategy and partner selection," Schremp said. "We don't have a lot to say today. Look for more from us early next year."
Lovett added that Charter also sees growth in commercial services -- estimates put the business telecom spend in its foot print at about $5.5 billion annually -- and the CEO sees another $3 billion opportunity in wholesale and cellular backhaul services. Charter commercial services should generate about $500 million in annual revenue this year.
"We've got $8.5 billon of addressable spend from that segment that we've barely scratched the surface on," Lovett said. He added that while commercial is an opportunity for all MSOs, Charter has a unique position because it has less competition - it has only one regional Bell company (AT&T) in 98% of its footprint - and it has invested in the network.
"Now we can really put our foot to the gas," Lovett said.
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