During the June quarter earnings call, the CEO of Charter Communications Tom Rutledge caved to mounting cord cutting pressure on its TV business admitting that it no longer sees cable TV as a stand-alone product. On the one hand, we are surprised to see this admission as it casts some serious strategic questions on the company. On the other hand, it comes as no surprise to us given the plummeting cable TV subscription numbers as consumer embrace the mobility that comes with streaming.
Let’s keep in mind this follows the removal of landline phone services as well, which means the long ago thought that cable TV companies run the risk of becoming dumb pipes is looking more likely. It also means we’re probably going to see higher prices for that data pipe coming into our homes… at least until 5G mobile networks go mainstream.
All of this makes Comcast’s move into content look far smarter. It also raises questions over the viability of Charter and those other cable companies that haven’t embraced content or some other competitive moat about their business.
“We’re going to use video aggressively. But what we’re saying is, it really isn’t a standalone product in its current situation,” Tom Rutledge said during Charters 2nd quarter earnings call.“All of that it putting pressure on traditional video but at the same time, video is the perfect way of selling content, so it isn’t just going to go away overnight. How fast? I don’t know. But I think we can manage our way through it and use video to drive relationships for the foreseeable future,” Tom Rutledge said.