Charter CEO Tries To Blame Netflix Password 'Piracy' For Company's Failure To Adapt To Cord Cutting
from the blame-everything-but-yourself dept
Like most pay TV providers, Charter Communications (Spectrum) continues to bleed pay TV subscribers tired of paying an arm and a leg for giant, bloated channel bundles. Also like most pay TV providers, the company isn't willing to really own the fact that their only real "solution" to this problem has been to double down on the same, bad ideas. Charter just got done gobbling up Time Warner Cable and Bright House Networks subscribers in a $79 billion deal that resulted in rate hikes as high as 40% and somehow even worse customer service than the historically-awful customer service the sector is known for.
That said, it shouldn't be particularly surprising that Charter lost another 104,000 traditional video subscribers last quarter. Those losses came after losing 90,000 TV subscribers during the second quarter, and another 100,000 during the first quarter of the year. While skyrocketing prices, horrible customer service, and the rise of streaming video competition are the obvious culprits here, Charter CEO tried lay the blame elsewhere. Namely, those troublesome rabblerousers who share streaming service passwords:
“There’s a lot of pressure on the video business,” Rutledge said. “The biggest pressure is price. But the second biggest pressure is that many programmers are distributors, whether they know it or now. And because of password sharing and multiple-stream products … You have 35 million one-person households in the U.S. The multiscreen products sold to those households also them to purchase one product and share it with multiple users.”
This isn't the first time Rutledge has complained about the practice of password sharing. While companies like Netflix and HBO have made it clear they see password sharing as a form of creative marketing, Rutledge has long stated he sees the practice as some sort of nefarious menace:
"The lack of control over the content by content companies and authentication processes has reduced the demand for video because you don’t have to pay for it,” Mr. Rutledge said on the earnings call. “That’s going on in the college market."
That's a pretty stellar misunderstanding of the evolving video market for the highest paid executive in America last year. Netflix and HBO have both stated that such password sharing has no meaningful impact on the industry, and if anything helps sell new subscriptions once users (especially Millennials riding on their parents subscriptions) get hooked on the value proposition. Compare that business plan to Charter, a company that's currently being sued for using hidden fees to jack up rates and for intentionally shortchanging subscribers at every conceivable opportunity.
Cable providers could easily combat streaming video competition by lowering rates and offering more flexible channel bundles, an idea they pay a lot of lip service to, but rarely implement. Instead, execs like Rutledge have tried to downplay the threat of cord cutting in the belief they can nurse the traditional cable TV cash cow indefinitely. They're afraid to offer a cheaper, better product for fear of accelerating the trend. What they often don't seem to understand is this isn't going to be a choice. The days of cable TV wink-wink, nod nod non-price competition are over, and if these companies want to remain in the TV business -- they're going to have to (gasp) seriously compete on price.
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Filed Under: cord cutting, password piracy, password sharing, thomas rutledge
Companies: charter, netflix
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"The lack of control over the content..."
The providers' content is perfectly controlled, just the way they want it... 3, 4 or 5 streams per account. And it's working really well. Stop whining, and start innovating.
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Is there any topic your bias doesn't automatically get wrong?
"Most millennials don't want to pay for Netflix - MarketWatch"
http://www.marketwatch.com/story/most-millennials-dont-want-to-pay-for-netflix-2017-04-0 7
"Young Americans want to binge-watch shows using the same account."
"How the internet has all but destroyed the market for films, music and newspapers | Media | The Guardian"
https://www.theguardian.com/media/2011/aug/14/robert-levine-digital-free-ride
"The author of Free Ride warns that digital piracy and greedy technology firms are crushing the life out of the culture business"
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Re: Is there any topic your bias doesn't automatically get wrong?
Okay, and this is different from cable, how?
*[citation needed]
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Re: Re: Is there any topic your bias doesn't automatically get wrong?
I'd thought that copyright was the one crushing the life out of the culture business.
If you can't derive from the culture of the previous generation there is no significant growth in culture.
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Re: Is there any topic your bias doesn't automatically get wrong?
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Re: Is there any topic your bias doesn't automatically get wrong?
From the Netflix article "Netlfix had its best quarterly subscriber growth in the fourth quarter of last year. The company said it added 7.05 million subscribers during the fiscal fourth quarter, bringing its worldwide total to 93.8 million."
So while millenials "don't want to pay for Netflix" that's an awful lot of new subscribers they have there.
As far as the second article goes, the internet isn't destroying the market, but it is redefining it. Legacy corps need to adapt or die. People are still buying films, music, and newspapers, but many of them want it through an easier, online portal.
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Has someone done the math on this?!
Charter has 30 million customers. Dude made $98.6 million in a year... That is quite literally $3 dollars PER CUSTOMER just for this dude's salary! This is not the entire support staff keeping the internet working, the customer support staff, the salesmen... That is $3 for one guy... Charter, your next below-the-line-fee can be a $0.25 CEO tax... now THAT is transparecy!
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Re: Has someone done the math on this?!
As a Charter/ Spectrum customer, I never realized that $3 of my bill is going straight to his salary!
Your math is a little off since your numbers are per-year, so each customer is paying $3 divided by 12 months on their monthly bill.
Though your point still stands: it's $3 per customer just to pay the CEO's salary.
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Re: Has someone done the math on this?!
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Mergers & Acquisitions
Actually, the deal was for $10 million, but after the papers were signed, there was a merger recovery fee, a regional office fee and a few overages that bumped the price up.
However, Time Warner & Bright House both declared that they did this in the spirit of transparency.
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Working as intended in my eyes.
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Leaving aside the argument about whether the reason you're losing customers matters, the part I found most interesting was this:
Is the problem he's lamenting here that every single pair of eyes (adult, child, visiting friend, pet cat, etc.) watching video "products" isn't paying for their own subscription, and should have to be in order to watch? Because it sure sounds like it.
I'm sure the cable TV industry, along with many others, would love to boil things down to a permanent pay-per-view model. (Everyone pays each time they open a book, everyone pays each time they watch an old rerun, everyone pays each time they crank up a song...) But aside from a few specific situations (e.g., theater tickets) that kind of wishful thinking just doesn't reflect reality.
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Cable is the same way
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Re: Cable is the same way
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Re: Cable is the same way
That's becoming more difficult with digital signals and encryption. Cablecard is dead; if you want extra TVs, it's likely each will need a box rented from the cableco.
But yes, back when cable TV was analog (and something young people cared about), I lived in some buildings popular with students... it was not rare to see "unofficial" coax sneaking along shared balconies, or between the windows of multi-apartment houses, or in college residences along the hallway ceilings (the bookstore sold splitters...)
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Agreed, and to add other things that they ought to do (but almost certainly won't):
This list deliberately avoids anything that involves them actually investing in infrastructure that they should have upgraded a decade (or more) ago, because shots there are just too easy.
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Good TV isn't rocket science
Improving on the Kodi interface shouldn't be that hard as Kodi requires a bit technical expertise to use.
The industry had a chance in 2015 with Set Top Box reform. They didn't want it.
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Re: Good TV isn't rocket science
Honestly, even writing good add-ons for Kodi is a good place to start. I know grandparents who use Kodi on a regular basis now and that would have surprised me even two years ago.
Design a set-top box with Kodi installed and put add-ons for your cable provider, Netflix, Hulu, etc on it. Set up a repository for trusted add-ons and, just like the current versions of Kodi do, make installing from outside the included repos require clicking through a warning stating that installing unknown add-ons could break things.
I've seen well-designed program guides in Kodi, in fact, I'm using one now. If you put some professional coders on the case to add a bit of UI and UX polish, they'd easily beat what's on the market now for set-top boxes.
It's too bad the FCC didn't manage to get set-top box reform through. If they had, we might have seen something like I just described this decade.
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This is wierd
We moved to a new house that didn't have cable run to it. But we wanted sable internet since AT&T DSL is horrendous. Charter went ahead and buried new cable to our house. Didn't charge me a penny. It's still more expensive that it should be by global standards though.
Then I discovered they'd launched a streaming TV app for Roku, android and iPhone. For $20 a month. I had nothing to lose to try it. It's actually better than Sling in my opinion, includes locals and works way better than their cable boxes (which are terrible).
So in some ways, it seems like portions of Charter get it. Other parts don't. The company is schizophrenic.
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try again
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Re: try again
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Language is hard.
I like it. It shows they understood what they meant but are lacking in the rigor to pay attention to the details. Much like what is happening in the TV business.
Details, details, the devil's in the details.
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