If Charter Communications is successful in acquiring Time Warner Cable and Bright House Networks for $78.7 billion, Charter is already well-positioned to rapidly expand its new cloud-based Spectrum Guide (pictured) across a combined footprint of 17.3 million video subscribers.
Charter gained the ability to run that guide on new IP-capable devices as well as older, QAM-locked set-tops last month when it and Arris teamed up on the $135 million acquisition of ActiveVideo Networks (Arris owns 65% of the J.V. and serves as the sales channel for ActiveVideo’s Cloud TV platform).
Charter had previously indicated that it planned to use ActiveVideo’s technology to speed up the deployment of its Spectrum Guide (pictured) following its first attempt to acquire Bright House. Charter’s expected to use the ActiveVideo game plan in newly acquired Bright House and TWC properties.
While the money tied to Charter’s part of the purchase of ActiveVideo (about $47 million) is dwarfed by what it’s proposing via the proposed TWC/Bright House purchase, the technology Charter acquired from ActiveVideo has “undoubtedly played a critical role” in today’s mega-deal, MoffettNathanson analyst Craig Moffett said in a research note issued Tuesday.
“ActiveVideo will allow Charter to much more rapidly deploy its cloud-based graphical user interface to acquired subscribers in a cost-effective manner, by making that interface backward-compatible with Time Warner Cable and Bright House set-top boxes,” Moffett wrote. “In the process, it will neatly sidestep what otherwise would be the large merger integration expense of compatibility testing between user interfaces and pre-existing headend and customer premise equipment. The importance of this development cannot be overstated.”
He said ActiveVideo’s technology will not only save Charter a tremendous amount of capital spending that would otherwise have been spent on new set top boxes, but it will also make for a speedier integration for Charter in the newly acquired properties.
“It is only a small overstatement to say that this deal may not have been possible, at least at this price, without ActiveVideo's technology,” Moffett said.
Charter has been testing Spectrum Guide in Fort Worth, Texas. The MSO expects to introduce it in other markets, including Reno, Nev.; and St. Louis, “in the coming months,” Tom Rutledge, Charter’s president and CEO, said on the company’s first quarter earnings call on May 1.