Charter Communications, the cable and broadband company, has announced plans to revamp its cable TV packages, particularly for sports networks. The new two-tier system will allow customers to choose a cheaper, sports-lite TV option without regional sports channels. This move comes as more people are cutting cable in favor of streaming services, impacting sports channels and regional sports networks. Charter, which owns two regional sports networks, aims to change the formula by relaunching its Spectrum-branded cable TV business as Spectrum Select Plus and Spectrum Select Signature. Spectrum Select Plus will include all sports programming and regional sports networks, while Spectrum Select Signature will exclude certain sports programming for a reduced rate.
These two options will be launched in Charter’s U.S. markets on a gradual basis. Customers who select the option with certain sports programming will also receive direct-to-consumer streaming apps for the local sports networks in their area for free. Charter plans to market and sell these regional sports networks app to its broadband-only customers. Major networks such as ESPN and FS1 will still be available on Spectrum Select Signature.
Charter’s Executive Vice President of Programming Acquisition, Tom Montemagno, stated that this new model allows for a more flexible approach to the outdated packaging model for sports, putting the focus on the customer. Previously, sports network agreements required distributors to pay for the rights to the content and make it available to a majority of subscribers, regardless of their viewership. Pay-TV bills often itemize regional sports network fees, with national networks like ESPN being particularly expensive for distributors like Charter and DirecTV to carry.
Charter’s new two-tier system aims to provide sports fans with what they want while offering non-sports viewers a more affordable alternative. It also supports sports networks’ pursuit of streaming options. As both a distributor and owner, Charter is well aware of the challenges faced by sports networks. The company inherited two regional sports networks when it acquired Time Warner Cable and is planning to launch a streaming alternative for those channels. Additionally, Charter and DirecTV have reached a new distribution agreement for regional sports networks. This agreement allows DirecTV to better target subscribers interested in Lakers and Dodgers programming while providing cheaper and more flexible options for customers uninterested in sports.
Spectrum Networks executive Dan Finnerty acknowledged the shifting viewing habits but emphasized that regular season sports programming remains popular. Recognizing the increase in direct-to-consumer choices, Finnerty believes the business model for regional sports networks needs to evolve to reflect the current marketplace. The agreement between Charter and DirecTV is a step towards shifting the business model and giving customers more control.
In conclusion, Charter Communications’ new approach to cable TV packages, particularly for sports networks, aims to offer customers more flexibility and affordability. The two-tier system allows for a sports-lite option without regional sports channels, while still providing access to major networks. This move comes as the industry adapts to changing viewing habits and the rise of streaming services.
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