Smit: Charter VOD sales outlook good
EmptyNEW YORK -- Charter Communications has seen some "encouraging results" in day-and-date VOD trials with movie studios, president and CEO Neil Smit said here Tuesday.
He also signaled that he is not focused on big asset sales. Speaking to The Hollywood Reporter on the sidelines of the 35th annual Global Media & Communications Conference organized by investment bank UBS, Smit said: "We generally see higher usage trends."
However, he cautioned that "we are not quite clear (yet) on the economic proposition" and revenue split between the cable operator and studios.
Industry executives have been careful in their early assessment of day-and-date VOD.
Time Warner CEO-designate has been among the most bullish and has touted positive trends for TW's film unit in trials. News Corp. president and COO Peter Chernin has been more cautious, saying he is not quite convinced yet that studios will definitely benefit financially long-term despite some positive test results.
Charter, controlled by chairman Paul Allen, has been testing day-and-date in such markets as Los Angeles, St. Louis and Madison, Smit said.
He didn't say which studios Charter is running tests with.
In his UBS appearance, Smit on Tuesday earned laughs when he said Charter isn't participating in the current 700 MHz wireless auction -- a sign of investor relief given that Charter is the most indebted cable operator with about $19 billion in debt.
Time Warner Cable and Comcast Corp. Monday had also said they are not bidding.
Asked about Charter's debt and possible future asset sales, Smit said his team is more focused on getting financial and operational benefits from an improved clustering of its cable systems in swaps and deals. "A pure sale of assets doesn't necessarily address our balance sheet," he said.
One investor argued that Charter and smaller cable operators will have trouble selling themselves or big systems if the FCC in the coming days approves a 30% ownership cap for cable companies.
"It remains to be seen if (FCC) chairman (Kevin) Martin will be successful" with a cap given his media ownership rule defeat last week, Smit said, adding that Charter is focused on its operations rather than a sale.
But he preferred to not provide further comments given the fluid regulatory situation.