ViacomCBS, Charter Ink New Carriage Deal, Includes Streaming

ViacomCBS and Charter Communications July 15 announced a comprehensive multiyear distribution agreement for the continued carriage of ViacomCBS’s leading portfolio of broadcast, entertainment, news and sports networks, in addition to licensing ViacomCBS’s suite of streaming services, including Paramount+, Pluto TV, BET+ and Noggin, for future distribution to Spectrum customers.

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“We are pleased to have reached a new deal to deliver ViacomCBS’s expansive portfolio of popular brands and premium programming for Spectrum audiences to enjoy, plus greater choice in how they consume our content,” Ray Hopkins, president of U.S. Networks Distribution for ViacomCBS, said in a statement. “Charter is a valued partner, and we look forward to deepening our long-standing relationship.”

Added Tom Montemagno, EVP of programming acquisition for Charter, said, “These comprehensive agreements with ViacomCBS recognize the fast-changing pace of the subscription video business and provide us the flexibilities to adapt for the benefit of our customers while also furthering our strategic interests in the advanced advertising realm and aggregated video store concept with the addition of the streaming apps.”

ViacomCBS and Charter also will expand their existing collaboration around addressable media and advanced advertising. Others terms of the agreements were not disclosed.

Charter Widens Spectrum Pay-TV Subscriber Losses

Charter Communication’s trend avoiding pay-TV subscriber contraction appears to be coming to an end. The Spectrum TV provider April 30 reported residential video customers decreased by 156,000 in the first quarter (ended March 31), compared with a decrease of 70,000 in the first quarter of 2020, and 152,000 in the first quarter of 2019. Charter ended Q1 with 15.5 million Spectrum residential video customers.

Charter, the No. 3 pay-TV operator in the country, in 2015 was one of the first operators to launch a broadband-only service — dubbed Spectrum TV Plus — that included a free Roku 3 player priced at $12.99 a month.

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“We continue to execute well in a market environment that has not yet returned to normal,” CEO Tom Rutledge said in a statement. “We added 355,000 Internet customers in the first quarter, and 2 million over the last year, for year-over-year growth of 7.3%.”

Charter ended the quarter with 29.2 million broadband subscribers.

Charter Spectrum Added Pay-TV Subs in 2020

In a trend reversal, Charter Communications Jan. 29 announced it added 19,000 residential video customers in 2020, compared with a decline of 484,000 subs in 2019. Residential video customers decreased by 66,000 in the fourth quarter, ended Dec. 31, while fourth-quarter 2019 residential video customers decreased by 105,000.

Charter ended the year with 16.2 million Spectrum video subs, up from 16.14 million subs in 2019.

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Charter CEO Tom Rutledge

Similarly to other pay-TV operators, Charter is a major high-speed Internet provider, the lifeline to delivering burgeoning over-the-top video consumption in subscriber homes. The company said it ended 2020 with 28.9 million residential and business Internet subscribers, with 2.2 million subs added in 2020 versus 1.4 million added in 2019. Charter added 246,000 broadband subs in the fourth quarter compared to 339,000 during the fourth quarter of 2019.

“Our 2020 performance demonstrates that our customer-friendly operating strategy works well for Charter communities, employees and shareholders, even in challenging economic and operating
environments,” CEO Tom Rutledge said in a statement.

Charter in 2015 was one of the first providers to offer broadband-only subscribers an online TV platform — Spectrum TV Plus — that afforded users access to premium channels for $20 monthly and a free Roku player.

Charter Cuts Q1 Video Sub Loss More Than 50%

Cable operator Charter Communications May 1 disclosed it lost 70,000 Spectrum video subscribers in the first quarter ended March 31. The loss was 54% less than the 152,000 subs lost in the previous-year period.

The distributor added 563,000 high-speed Internet customers, up 41% from 398,000 new broadband subs last year. Spectrum ended the period with 29 million cable, Internet and voice subscribers in 41 states, including 15.5 million video. The latter down 402,000 video subs in the past 12 months.

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Charter several years ago bowed Spectrum TV Plus, a $12.99 monthly online TV service for its broadband-only subs. The service included a free Roku player. Last year Charter unveiled “TV Essentials,” a $15 monthly “skinny bundle” option for pay-TV subs.

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“Thanks to the dedication of our employees and the quality of our network, we have continued to deliver high quality connectivity services to millions of existing and new customers in the communities we serve, including homes, businesses, hospital and educational systems, and local, state and federal government institutions,” longtime CEO Tom Rutledge said in a statement.

ViacomCBS, Charter Close Funding (Debt) Initiatives

With a traditional media revenue businesses turned upside down by the coronavirus, and not wanting to wait for government bailouts, ViacomCBS and Charter Communications are the latest content creator/distributors to seek outside funding (and debt) to sustain operations.

Charter April 17 announced the closing of $3 billion in bonds, which include $1.6 billion of senior secured notes due in 2031, and $1.4 billion of senior secured notes due in 2051.

Separately, ViacomCBS said it would redeem all of its outstanding senior notes due on Feb. 15, 2021, and all of its outstanding senior notes due on March 1, 2021. The separate aggregate amounts of senior notes disclosed April 17 included $300 million and $500 million, respectively.

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The moves come on the heels of major Hollywood players going to Wall Street in search of funding sources. AT&T sought upwards of $5 billion in loans, while Discovery pulled the trigger on $500 million of its credit line. Comcast sold $4 billion in debt while The Walt Disney Co. secured a $5 billion loan from Citibank.

“Right now, it’s all about liquidity,” Neil Begley, SVP of corporate finance group, told The Hollywood Reporter.

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WarnerMedia and Charter Announce Distribution Agreement for HBO Max

WarnerMedia and Charter Communications have entered into a new multiyear distribution agreement that will make HBO Max, WarnerMedia’s upcoming streaming platform, available to Charter customers when it launches in May.

Through the pact, all of Charter’s existing HBO subscribers, including subscribers in its Spectrum Silver and Gold video packages, will automatically be given access to HBO Max at no additional charge and with no action required other than signing into the HBO Max app. All remaining and new customers will be able to purchase HBO Max directly from Charter.

“Charter has been a longtime distributor of our networks and on-demand content, and a valued partner to our company,” said Rich Warren, president of WarnerMedia Distribution, in a statement. “We look forward to working together to bring HBO Max to Spectrum subscribers when the product launches next month.”

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“We are eager to provide Spectrum customers with the highly-anticipated HBO Max offering when it makes its debut next month,” Tom Montemagno, Charter’s EVP of programming acquisition, said in a statement. “This new premium streaming experience will be a welcome addition to Spectrum subscribers; we will offer HBO Max on a multitude of platforms for purchase by our video, broadband and mobile customers alike.”

New Disney-Charter Deal ‘Contemplates’ Disney+ Access

Chalk up another positive for Disney+: The Walt Disney Co.’s much-hyped new subscription video-on-demand (SVOD) service, set to launch in November, may be available to Charter Communications subscribers.

A new distribution deal between Disney and Charter, announced Aug. 14, calls for the country’s No. 2 cable operator to continue carrying Disney’s TV and ESPN programming to Spectrum TV subscribers.

The deal also “contemplates Charter’s future distribution of Disney’s streaming services, including Hulu, ESPN+ and the soon-to-be-launched Disney+,” according to a press release issued by Charter.

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The deal wouldl help Disney+ in its attempt to compete with established streaming titans Netflix and Amazon.com.

In addition, Spectrum TV will also offer customers access to ESPN’s upcoming ACC Network when it launches Aug. 22.

Under the deal, Spectrum TV will continue to provide its customers widespread access to ABC, Disney Channel, Disney Junior, Disney XD, Freeform, ESPN, ESPN2, ESPN3, ESPNU, ESPNEWS, ESPN Deportes, ESPN Goal Line, ESPN Bases Loaded, SEC Network, Longhorn Network, and the newly acquired networks of FX, FXX, FXM, Fox Life, National Geographic, Nat Geo Wild, Nat Geo Mundo and BabyTV.

“This agreement will allow Spectrum to continue delivering to its customers popular Disney content, makes possible future distribution by Spectrum of Disney streaming services, and will begin an important collaborative effort to address the significant issue of piracy mitigation,” said Tom Montemagno, EVP of programming acquisition for Charter.

Sean Breen, SVP of Disney Media Distribution, added: “Our new agreement with Charter allows us to continue serving Spectrum TV customers with the full value of the Walt Disney Television and ESPN networks, including the newly acquired FX and Nat Geo networks. ACC fans can also rest assured that they will be able to watch their favorite teams on Spectrum, one of the largest distributors across the ACC footprint, when ACC Network launches next week.”

Charter’s Spectrum TV App on Apple TV

Charter Communications has launched the Spectrum TV App on Apple TV.

Nearly 50 million homes across Charter’s footprint now have access to live channels and tens of thousands of programs on the Spectrum TV App for Apple TV, according to Charter.

Additionally, starting next week and expanding throughout 2019, new and existing Spectrum TV and Internet customers can get an Apple TV 4K as part of their monthly subscription for $7.50/month plus tax for 24 months, according to Charter.

Charter is the first U.S. based cable operator to offer customers the new zero sign-on experience from Apple, which further simplifies signing in to video apps on Apple TV, according to Charter. When first set up in a Spectrum household, Apple TV 4K or Apple TV (4th generation) will detect the Spectrum customer’s broadband network and automatically sign them in to the Spectrum TV App and all the supported apps they receive through their service — with no need to enter a username and password, according to Charter.

The new Spectrum TV App is also integrated with the Apple TV app and Siri.

“We are bringing our customers the most robust Spectrum TV App experience available today through Apple TV,” said Rich DiGeronimo, Charter’s EVP, products and strategy, in a statement. “With features like zero sign-on and Apple TV app integration, the Spectrum TV App on Apple TV delivers the best and most seamless viewing experience, giving customers even greater choice and flexibility to enjoy Spectrum TV.”

“With Spectrum TV on Apple TV 4K, customers can now enjoy the ultimate entertainment experience across their iPhone, iPad and Apple TV,” said Greg Joswiak, Apple VP of product marketing, in a statement. “We want to help customers get right to watching their favorite channels, shows, movies and sports, and with innovative features like zero sign-on, the Apple TV app and Siri, they are able to jump right in.”

DirecTV Launching Proprietary Streaming Media Device in 2019

As expected, DirecTV plans to roll out a proprietary streaming media device in 2019 that would enable consumers to access online TV service DirecTV Now using their own broadband or high-speed Internet connectivity.

The device, which would be similar to a Roku or Apple TV device, would help DirecTV reduce subscriber acquisition costs typically associated with the installation of pay TV service, including truck rolls and employees climbing the roof installing satellite receivers.

Speaking Nov. 14 at the Morgan Stanley European Technology, Media & Telecom confab in Barcelona, AT&T CFO John Stephens said the streaming device would afford DirecTV with the same data insights and targeted advertising (driven by data analytics subsidiary Xandr) as linear pay-TV.

“It’s a device that allows us to instead of rolling a [service] truck to the home, we roll a UPS or FedEx truck to the home,” he said.

The executive said the box would help AT&T boost broadband subscriptions, which currently total about 15 million households.

“We certainly hope it’s our own fiber, but it can be on anybody’s broadband,” Stephens said.” “We are testing it with employees today.”

Charter Communications followed a similar strategy in 2015 when it launched standalone online TV service Spectrum TV Plus to broadband customers. New subs were given a free Roku 3 streaming media device to facilitate the $20 monthly service.

Separately, Stephens said oral arguments in the Justice Department’s appeal of the $85 billion AT&T/Time Warner merger are due Dec. 6 – with a decision by the three-judge panel expected next year.

“Quite frankly, we’re confident the decision will be upheld,” he said. “It’s a process we have get through. But we’re not spending a lot of time thinking about it.”

 

Charter Spectrum Softens Q3 Video Sub Loss

Charter Communications Oct. 26 disclosed it lost 66,000 video subscribers in the third quarter, ended Sept. 30, and improvement from 104,000 video subs lost in the previous-year period.

The nation’s third largest pay-TV operator (after acquiring Time Warner Cable and Bright House Networks) attributed the reduction to sales of standalone online TV service Spectrum TV Streamand Spectrum TV Choicevideo packages. It ended the period, however, with 16.1 million video subs – down 258,000 subs from 16.39 million reported last year.

“At the end of 2018, our integration of legacy TWC and Bright House will be largely complete, and we will operate as a single company, with a superior product and value proposition,” CEO Tom Rutledge said in a statement.“With significantly less customer-facing change in 2019, we expect continued improving service metrics with higher demand and retention, faster growth and falling capital intensity, driving meaningful free cash flow growth.”

Indeed, Charter added more than 1 million high-speed broadband customers in the past 12-month period, ending the quarter (266,000 net additions) with 23.3 million.