Entertainment giants have made traditional pay-TV “unaffordable,” the chief financial officer of cable powerhouse Charter Communications told investors on Monday.
Speaking at the Bank of America Securities 2021 Virtual Media, Communications and Entertainment Conference, Chris Winfrey said, “Programmers have made this product unaffordable for a large segment of the population despite the fact that we have tried to find ways to get a valuable product that customers can afford in their hands.
That likely means continued cord cutting, he argued. “To the extent that programmers continue to raise their rates in a way that is…more than customers can afford, you’re going to see continued losses, if not an acceleration in losses” of pay-TV subscribers , he argued. Winfrey added that Charter is “not really in a position to go through everything that comes our way” in terms of higher prices for programming.
Charter outperformed its peers in this environment to remain “mostly stable, while everyone else lost significant numbers of subscribers”, not only because the company sold “thin” content packages, but also because she “found ways”. “to reach consumers with new offerings, including SVOD, direct-to-consumer and other packages,” the CFO said.
Winfrey argued that the content giants have been hit with a dilemma. “The programmers weren’t able to get out of the prisoners’ dilemma of taking the additional fare increases and insisting on transportation and forcing multiple channels and grouping requirements,” he said.
Winfrey concluded that to help the health of the pay-TV ecosystem, the industry would need either lower programming prices and/or increased flexibility for distributors like Charter “to package these products in a way that that they can really stimulate penetration”.
Charter CEO Tom Rutledge has also in the past criticized programming companies for pushing higher distribution fees for their networks while pushing their own streaming services.