Charter Communications, the No. 2 cable operator in the U.S., has announced plans to launch Spectrum TV Essentials, an OTT video service for the company’s existing internet customers who don’t already get pay-TV from Spectrum.
Rolling out by the end of March, the service will cost $15 a month. It will offer live and on-demand programming from more than 60 lifestyle, entertainment and news channels owned by the likes of Viacom, Discovery, A+E Networks, AMC Networks and Crown Media. Starting in May, subscribers will also be able to get Spectrum Originals, a portfolio of shows created by a new programming arm of Charter. Sports — generally considered the “glue” of the traditional cable bundle — is not an ingredient in Spectrum TV Essentials.
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Other traditional pay-TV operators including Comcast and AT&T have explored lower-cost “skinny bundle” services, having seen their subscriber numbers decline even as internet remains in demand. Rival skinny offerings such as Sling TV, Hulu with Live TV and DirecTV Now have grown steadily in recent years, luring away cord-shavers with a more accessible alternative to traditional two-year contracts and equipment rentals. Philo TV, an expressly non-sports, lifestyle-centric OTT bundle, has been steadily gaining traction since expanding from its traditional college-campus roots to the general market more than a year ago.
As linear ratings continue to erode and technology keeps viewing habits shifting, the goal of securing carriage-fee increases via traditional deals with operators has proven elusive for many programmers. Many content companies have celebrated the rise of skinny bundles as a way of balancing the scales and keeping their networks fully penetrated despite ratings declines, though the economic puts and takes are still being fully evaluated.
“Spectrum TV Essentials is an OTT offering designed to provide Spectrum Internet-only customers a new low-price, high-value video option,” Charter CEO Tom Rutledge said. “As we began to assemble the rights for this new video service, we received great enthusiasm and encouragement from these key programming partners, who share our view and embrace creating an innovative video offering we believe will resonate with our internet customers. Notably, Viacom shared its strong belief and research that suggests there is a large untapped opportunity for a low-priced, entertainment-only bundle unencumbered by the high cost of broadcast retransmission consent fees and expensive sports programming.”
“We’re thrilled to expand and deepen our relationship with Charter. They share both our commitment to the evolution of the Pay TV ecosystem as well as our understanding of the changing needs of consumers,” said Bob Bakish, Viacom President and CEO. “As the video marketplace continues to segment across price points and offerings, we believe a high quality, lower priced option for internet-only subscribers is very important. We’re excited to have our global brands as part of Spectrum TV Essentials at launch.”
The TV Essentials lineup will be available through the Spectrum TV app on a range of mobile and connected devices.
In addition to Viacom, A+E, AMC, Discovery and Hallmark, other notable networks include Cheddar, NewsmaxTV, Newsy and The Weather Channel. Spectrum News will also be a part of the lineup in New York, Los Angeles, Tampa, Charlotte, Orlando and other markets, Charter said.
In a press release calling attention to its presence in the new Charter offering as well as on virtual MVPD FuboTV, Viacom said the OTT deals illustrate the company’s effort to become less dependent on traditional carriage deals. “Taken together, these announcements make clear that we continue to successfully execute our strategy to expand our presence on next-generation distribution platforms through our strong industry relationships and must-have content,” the company said.
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