Charter CEO Believes Joint Venture with Comcast Can Become Major Player in Streaming
In a fairly shocking announcement in April, the two largest cable companies in the United States — Comcast and Charter Communications — revealed that they had formed a joint venture. The idea was to launch a new streaming platform that would be available to customers of the two cable companies and beyond, one that would compete with Roku, Fire TV, and other such platforms.
Last week, Thomas M. Rutledge, the chairman and CEO of Charter, addressed that venture and what the company hopes to accomplish with it, at the Goldman Sachs Communacopia + Technology Conference.
“I think this new platform that we’re developing with Comcast and the joint venture gives us an opportunity to monetize video and to use our customer relationships to drive that platform deeper into the market,” he said, “and to create an advertising business and a transaction business that — where we monetize the platform by helping direct-to-consumer media companies get more customers and take a fee for doing that for them, help sell the product. That’s one revenue opportunity that comes from it.”
When asked whether the joint venture is something that can “scale on its own,” or whether any further investment will be needed, Rutledge indicated that he believes that there will need to be more money invested in the project, even beyond the $900 million that Charter was required to invest as part of the original deal.
“Well, I think that we’ll make investments in it because I think it can — we need to scale it out and get some scale in order to drive advertising and to drive purveyors of content to want to have us sell their content on that platform. So yes, we’re going to have to deploy it,” he said.
Despite the dwindling cable TV audience, Comcast and Charter — the latter of which owns the Spectrum Cable brand — remain by far the two largest cable providers in the country. As of the end of the second quarter, Comcast had about 17 million cable subscribers, while Charter had 15.5 million. The third-largest company, Cox, had just over 3 million.
The plan, the companies said in April, is to “develop and offer a next-generation streaming platform on a variety of branded 4K streaming devices and smart TVs, providing consumers with a world-class user experience and navigation, all the top apps and more choice in the streaming marketplace.” It also gave Charter customers access to Xumo, as well as Comcast’s XClass TVs.