Advanced Television

Cablevision Chief: OTT could help limit content costs

September 16, 2011

Over-the-top programming could help moderate rising programming costs in the future, Cablevision Systems chief operating officer Tom Rutledge has said.

“The rich [channel] package we provide is extremely valuable to customers and there is pricing power in that package,” Rutledge said at the Bank of America Merrill Lynch event. “On the other hand, you have people experimenting with over-the-top television, which if successful would tend to make that package less stable, which will change the balance of costs. I’m not sure how that goes.”

Asked about a la carte programming, Rutledge said he would offer every network a la carte if he could, but the programmers won’t allow it. “I’d love to sell Netflix as a service on my cable system. Why not? There are other things I’d love to sell a la carte and I think I could sell deep penetration of products with our marketing capabilities. A la carte would be the most preferential way. I don’t see the world breaking up, though, into an a la carte scheme in the near future.”

Rutledge added that while Cablevision isn’t seeing a big rise in cord-cutting, it is embracing Internet programming through its Optimum Link PC-To-TV service, which allows customers to watch content from their computer on their TV screens.

“Our goal is to put everything that’s on the Internet on all the screens in the house,” Rutledge said. “We’re moving rapidly to make that technology work even better and we think within a matter of months we’ll have a very robust system where customers can take their Netflix product, whether they have a device that carries Netflix or not, or Hulu or any other over-the-top service and put it on the TV. To the extent that that has a moderating effect on our programming costs, that’s good. To the extent it satisfies customers, that’s good.”

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