Deeper Dive — Charter Sees Increase in Advertising in Video Streaming Strategy
Hulu, Pluto TV, Tubi, Peacock, Roku are the names most related to the ad-supported streaming market, but Charter can fit into this list.
The cable company still has a strong traditional video distribution business, but it is increasingly turning to streaming and reaping the advertising benefits that can come with it. Charter sells several video packages at lower cost and allows a large number of its customers to access its linear video product through apps on third-party devices rather than through its cable set-top boxes. CEO Tom Rutledge, speaking today at a Goldman Sachs investor conference, said his company is one of the biggest, if not the biggest, streaming video providers.
“Charter is actually the largest streamer of video products in the country because we sell our traditional video products on Roku and Apple devices,” he said. “So consumers don’t necessarily need to take a box from us; they can take an app from us. As an app-based provider, we have the country’s top rated video app and the most streams of any video provider, including any virtual video network operator.
Rutledge said Charter continues to grow her linear advertising business and part of that is because she streams so many videos to digital platforms where she can use targeted advertising to earn higher CPMs. He said his company has a huge local ad sales force that can sell targeted advertising locally. “It encourages us to bring low cost videos to consumers through advertising. “
Indeed, outside of mobile, the advertising network division of Charter saw the strongest increase in turnover during the second quarter. Although still only a small portion of the company’s consolidated revenue, Charter advertising sales grew 65% to $ 411 million.
As Charter continues to explore new ways to sell video products to its customers, it still manages to keep its traditional video subscribers low compared to its peers like Comcast and AT&T. Charter lost 50,000 video subscribers in the quarter after losing 63,000 residential customers but adding 13,000 business customers. The company ended the quarter with 16.01 million total video subscribers.
If Charter can continue to moderate its loss of video subscribers by offering lower-cost packages outside the traditional pay-TV distribution paradigm, it will likely be able to continue to grow ad revenue quickly.