Entertainment giants have made traditional pay TV “unaffordable,” the chief financial officer of cable powerhouse Charter Communications told investors on Monday.
Speaking at the virtual Bank of America Securities 2021 Media, Communications and Entertainment Conference, Chris Winfrey said: “The programmers have made this product unaffordable for a large part of the population despite the fact that we tried to find ways to get valuable product that customers can afford into their hands.”
That likely means continued cord-cutting, he argued. “To the extent that programmers continue to increase their rates in a way that is … higher than customers can afford, you are going to see continuing losses, maybe even accelerating losses” of pay TV subscribers, he argued. Winfrey added that Charter is “not actually able to pass through everything that is coming through to us” in terms of higher prices for programming.
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Charter has outperformed its peers in this environment though to stay “essentially flat, while everybody else has been losing significant amounts of subscribers,” not just because the company has been selling “skinny” content packages, but also because it has been “finding ways” to reach consumers with new offerings, including SVOD, direct-to-consumer and other packages, the CFO said.
Winfrey argued that content giants have been affected by a dilemma. “The programmers have not been able to get out of the prisoners’ dilemma of taking the additional rate increases and insisting on carriage and forcing multiple channels and cross-bundling requirements,” he said.
Winfrey concluded that to help the health of the pay TV ecosystem, the sector would either need lower programming prices and/or increased flexibility for distributors like Charter “to package these products in a way that they can actually drive penetration.”
Charter CEO Tom Rutledge has in the past also criticized programming firms for pushing for carriage fee increases for their networks while also pushing their own streaming services.
