Charter Communications, the No. 2 cable TV provider in the U.S., has unveiled a significant revamp of its Spectrum pay-TV subscription offerings.
The new scheme, which will roll out this fall, overhauls the long-problematic situation for regional sports networks, like the company’s own SportsNet LA, which airs Dodgers baseball and Lakers basketball. As the cost of sports rights has risen, pay-TV subscriber rates have fallen, damaging the traditional model of tacking on the price of RSNs to subscribers’ bills. Blackouts and outages have been the result as carriage disputes have broken out, with SportsNet LA going dark for more than six years on DirecTV until a resolution in 2020. (The two companies disclosed a carriage renewal as part of today’s broader announcement, with a press release calling the carriage pact “consistent with this evolutionary new model.”)
In the new structure, Spectrum TV Select will relaunch as two new services in parts of Charter’s footprint: Spectrum Select Plus, which will include RSNs and other sports programming, and Spectrum Select Signature. The company describes the latter as “an alternative service that will exclude certain sports programming and provide the non-sports fan a reduced rate option.”
For years, subscribers to the traditional bundle have griped about rising bills due to the higher cost of sports, saying they were being forced to pay even if they didn’t watch sports. Industrywide, perhaps not coincidentally, cord-cutting has reached record levels over the past few years, particularly as the number of top-shelf paid streaming outlets has increased, raising questions about where pay-TV levels will ultimately settle. Many industry and Wall Street analysts had looked at 50 million households as a floor, but recent data indicates the bottom could be a lot lower, amplifying a major disruption for distributors and programmers alike.
Spectrum Select Plus and Spectrum Select Signature will launch on a market-by-market basis, depending on where Charter has acquired rights. Spectrum Select Plus subscribers will also get local RSN streaming apps at no additional charge, where applicable. Charter may market and sell these DTC streaming apps to its non-video subscribers as well.
Diamond Sports, the Sinclair Broadcast Group subsidiary that controls the former Fox-owned RSNs now branded as Bally Sports, entered Chapter 11 bankruptcy proceedings soon after launching a direct-to-consumer streaming service. Major RSNs like the YES Network and the New England Sports Network have done likewise as they look to combat the cord-cutting trend.
“The launch of Spectrum Select Plus underscores our commitment to providing our customers with the best sports coverage while ensuring our non-sports fans have options that meet their needs,” said Tom Montemagno, EVP, Programming Acquisition. “This new model paves the way for a more flexible approach to the outdated packaging model for sports, and it puts the focus where it should be, on the customer.”