Rutledge: HBO, CBS OTT Presents Opportunities For Cable

Charter CEO Says Could Help Unlock Programming Bundle

Charter Communications CEO Tom Rutledge added his two cents in the ongoing debate surrounding programmers that are taking their content over the top directly to consumers, adding that upcoming offerings from Home Box Office and CBS could actually help cable operators.

HBO announced plans last month to launch an over-the-top product initially aimed at broadband-only customers next year.  CBS also unveiled its own OTT offering – CBS All Access – that will allow subscribers to see some shows live and on demand for $5.99 per month.

Rutledge, speaking on a conference call with analysts to discuss Charter’s third quarter results, said the OTT offerings and others like them could help unravel the practice of selling less attractive networks with more popular channels, also known as bundling. Distributors have long complained that they are forced to purchase channels their customers don’t want in order to get the networks they desire.

Breaking up that bundle would allow cable operators to provide a more compelling product, and could finally address the issue of providing packages that are both economically and esthetically attractive to consumers.

“The interesting thing about the business is that people want our products and the biggest strain on the business from a video perspective is -- cord cutting is really financially driven more than it is content driven,” Rutledge said. “And the reason it's financially driven is because incomes have not kept up with the cost of the product.”

Unraveling the bundle would allow operators to better create offerings targeted at different segments of the population.

“If we have that ability and the programmers are willing to allow us to have that ability, I think we could actually have a better, more successful video product,” Rutledge said.

Rutledge’s comments echo what several operators have said about OTT, including Time Warner Cable chairman and CEO Rob Marcus.