Charter Communications has shifted its newly acquired Time Warner Cable customers in Los Angeles and Dallas to its Spectrum brand, adjusting pricing and packaging accordingly.
The shift occurred Tuesday in what are now Charter’s biggest (L.A.) and ninth largest (Dallas) markets.
“These were both two of the earliest TWC Maxx markets, meaning they are likely down to little or no analog channels so have a lot of excess broadband capacity, and are adjacent to legacy Charter footprint which should make marketing and distribution easier,” said J.P. Morgan analyst Philip Cusick in a note to investors this morning.
According to the Los Angeles Times, which interviewed Charter President and CEO Tom Rutledge, and serves a region with 3 million Charter subscribers, rates paid by legacy TWC customers will not change until the expiration of their current contract. New customers, meanwhile, will be offered promotional pricing.
“Our goal is to provide superior video service, superior data service and a superior voice service than any of our competitors,” Rutledge said to the Times. “And hopefully we will be able to upgrade customers into the new Spectrum service.”
Charter will offer three TV packages: Spectrum Select for $64.99 a month; Spectrum Silver for $84.99; and Spectrum Gold for $104.99.
“Charter is offering promotional prices, and simplified prices, but the main take-away is that there will be less choice for more money,” Matt Friedman of the consumer advocacy group Stop the Cap said to the Times.
Notably, in Los Angeles, Charter will re-up the carriage-starved regional sports network SportsNet LA to $4.50 a month per subscriber. That’s the same rate that DirecTV and virtually every other pay-TV operator in the region has balked at.
“That deal is no longer on the table -- it didn’t work,” Rutledge said. “We would love to sell the channel to others, but no one has bought it — and we are not giving it away. So if consumers want the Dodger channel, they’ll need to subscribe to us to get it.”
Cusick, however, doesn’t see consumers losing out in the newly converted markets.
“While Charter Spectrum lacks ancillary fees, we would note that the company has seen higher subscriber take rates in enhanced services as well as up-tiering as a result of the simplified pricing and packaging which, in our view, is more consumer friendly given its lack of a modem fee and cheaper set-top box rates,” he said. “Net-net we would expect that high-spending TWC customers who call in may be able to reduce their spending, but on average customers will spend roughly the same amount, but get faster broadband speed and more boxes.”
- read this Los Angeles Times story