Rutledge: Charter Talking to Comcast About ‘Flex’

No. 2 cable operator considers similar streaming offering
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Charter Communications chairman and CEO Tom Rutledge told analysts Friday that he is considering the possibility of incorporating a streaming video offering into its product lineup similar to Comcast’s Xfinity Flex product.

With XFinity Flex, Comcast broadband-only customers receive a free box and voice remote that allows them integrate online SVOD services like Netflix, Hulu and Amazon Prime on their TVs along with music and Comcast transactional services. 

Xfinity-Flex-Hero

“We have discussed that with Comcast,” Rutledge said of the Flex product on Charter’s Q3 earnings call with analysts Friday. “It’s an interesting idea. We’re considering it and it has advantages. We have a significant number of app-based relationships we’ve developed on multiple devices. That strategy is working for us, but putting inexpensive devices out with your service makes some sense to us.”

Whether those talks will materialize into an actual product remains to be seen. Rutledge didn't elaborate on the Flex talks and in the past discussions with the No. 1 cable company in the country have been just that -- discussions. 

On its Q1 call in April, Rutledge noted that Charter also was having conversations with Comcast around the latter’s X1 operating system. So far, nothing material has come out of those conversations.

Charter chief Tom Rutledge speaking at CableTec Expo 2017

Tom Rutledge

Rutledge also touched on one of his favorite topics -- mitigating content piracy, particularly through password sharing. At least two recent Charter content carriage deals -- with The Walt Disney Co. and with Fox -- included a provision to make moves to thwart password sharing for access to those networks. On the conference call, Rutledge said piracy is still a problem and Charter is making some inroads, but there is still a long row to hoe.

“I think there is some recognition in the programming industry that they are now distributors, and as a result of being distributors they need to know where content is going,” Rutledge said. “That had not been part of their DNA. Streaming products have been sold with five streams and with no location-based security. Most households in the United States have two or less people in them, and as a result of that there are more streams than there are households. By sharing passwords and not having location-based or subscriber-based relationships with those streams, and the fact that TV Everywhere allows for massive numbers of streams to be replicated through virtual MVPDs and so forth, it’s just too easy to get the product without paying for it.”

He added that despite cord cutting and declining pay TV subscriber rolls, video consumption is increasing. And allowing unfettered password sharing among content products makes the price-value equation of pay TV difficult.

“The people that own content are going to have to come up with standards of security and they are going to need to implement them and they’re going to need to know where their services are being viewed and they need to have a business model that works for them,” Rutledge said. “That requires some effort and some collaboration, and we’ll continue to push for it, but it’s a slow process.”

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