Charter Communications has officially launched its inaugural App Store as part of a significant initiative to enhance its broadband and video services, showcasing not only cable channels but also seamless access to various streaming platforms.
Through its campaign titled “Seamless Entertainment,” featuring Tracy Morgan in a series of humorous advertisements, Charter is endeavoring to establish itself as a gateway for subscribers, similar to Amazon Prime Video and Roku, which provide access to Netflix, HBO Max, Disney+, Paramount+, and others.
On October 9, Charter hosted an event in Manhattan during Advertising Week to unveil the new App Store’s features and the overall strategy for attracting customers. The objective is to persuade consumers that Charter offers a one-stop solution for reliable broadband service essential for streaming content. Additionally, the company aims to clarify that customers maintaining traditional TV subscriptions also enjoy access to popular streaming apps through authentication, including the ESPN app that Disney launched recently.
The ESPN streaming platform includes numerous games and shows not available on traditional ESPN. However, subscribers to linear ESPN through Charter’s cable packages can access the streaming app without incurring extra charges—a fact that many traditional cable customers may not be aware of.
The dynamics of how television packages are marketed and sold have drastically transformed in the past 15 years, following the rise of Netflix and its array of streaming options. Charter’s current strategy reflects a gradual industry shift towards bundled offerings that combine entertainment from various programming sources. Both Charter and its top competitor, Comcast, are striving to rectify past customer service mistakes to present themselves as the best value choice for consumers.
Charter’s president and CEO, Chris Winfrey, views the App Store as a key channel for drawing consumers into a more comprehensive package of Charter’s video and broadband services, particularly once they understand the costs associated with streaming subscriptions on a per-app basis. According to Winfrey, the pay TV sector is trending back towards bundling practices.
“Our distribution platform exceeds our video subscriber base, thanks to the broadband services we provide. This allows us to reconsider our video offerings. Moreover, with 30 million broadband customers—many of whom no longer subscribe to traditional video—we have the potential to introduce à la carte options. To our broader broadband customer base, we will offer AMC+, ESPN, Paramount+, and HBO Max,” Winfrey stated. “At some point, we hope these customers will ponder the cumulative costs and consider that for $100, they could have video included as part of their package.”
During the Spectrum event, Winfrey was questioned during a Q&A session by CNBC’s Alex Sherman regarding the missteps over the past decade and a half that have led U.S. cable companies to lose nearly 35% of their subscribers. Winfrey, who has been at Charter for 15 years and became CEO in December 2022, referenced the significant changes in Hollywood’s content licensing strategies prompted by the emergence of streaming platforms with substantial budgets. This shift, while gradual, ultimately had detrimental consequences for both programmers and distributors.
“The premise that content could be sold without authentication protection, devoid of advertising or branding, with the assumption that it would attract incremental subscribers was a substantial error,” Winfrey commented. “Once that occurred, and many entities began providing content at discounted prices while sustaining losses for extensive periods, it marked a significant turning point. Subsequently, companies like Disney naturally gravitated towards prioritizing direct-to-consumer strategies to reclaim their content.” Winfrey also noted that Netflix’s initial Wall Street success fueled a spending frenzy that has since disrupted Hollywood.
Winfrey acknowledged that cable continues to grapple with an image issue; however, the focus has shifted to the sector drawing increasing scrutiny from investors, given that broadband services remain fundamental to both residential and business needs. Essentially, Hollywood has recognized the advantages of forging distribution partnerships rather than solely relying on direct-to-consumer business models that entail substantial startup investments.
“Now, we present an appealing offering, as we can reassemble content in a manner that is beneficial for consumers, while also maximizing profitability for programmers, thereby enhancing value for everyone involved,” Winfrey said.
The presentation from Charter also highlighted improvements to the voice remote service developed alongside Comcast. Charter and Comcast are joint partners in the Xumo Stream Box initiative, designed to facilitate users’ transitions between linear programming and streaming content.
In attendance at the event were ESPN executive Jimmy Pitaro and AMC Networks CEO Kristin Dolan. Both ESPN and AMC have collaborated closely with Charter in recent months to finalize agreements that embrace applications such as Disney+, Hulu, and ESPN, alongside the AMC+ premium drama service. For cable distribution partners, it is essential to include streaming applications to enhance the value of their offerings, as the era of automatic rate increases with every cable contract is long gone.
The discussion among Winfrey, Dolan, and Pitaro illustrated the complexities within the pay TV landscape, especially with the emergence of numerous options, including free streaming channels and apps. Programmers, whether minor (like AMC) or major (such as Disney), require multi-channel video programming distributors (MVPDs) for support; the ability to bundle diverse services and content is crucial for creating a compelling consumer proposition.
“There are two distinct customer groups: those who exclusively use streaming or broadband-only services and prefer streaming products, and those who predominantly watch traditional linear content. Interestingly, the overlap between these groups is not as extensive as one might expect,” Dolan remarked.
Pitaro has commended the “seamless entertainment” initiative as a timely approach for revamping the television ecosystem. The negotiations following a nearly two-week disruption of Disney channels on Charter in 2023 have resulted in a much stronger collaborative relationship.
Even as ESPN launched standalone operations for the first time, “we internally decided to reaffirm our commitment to the pay TV realm, and the best way to illustrate that was through the added value we provided upon launch,” Pitaro explained. “We made all enhancements within the ESPN app accessible to Charter subscribers. They can launch the ESPN app, authenticate, and gain access to deeper personalization, interactive features, fantasy feeds, stats integration, and commerce options—all accessible to Charter subscribers. It’s our way of offering more value to that consumer environment.”
Here’s a glimpse of one of the Tracy Morgan commercials that articulates Spectrum’s appeal to consumers:
