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In this photo illustration, the Charter Communications logo is shown on a smartphone screen.
Rafael Henrique | SOPA Pictures | Light Rocket | Getty Images
Change is coming Communication charterCable TV packages – especially for sports networks.
Cable and broadband company He said On Monday it plans to begin offering a new two-tier cable package system that will allow customers to select a cheaper, sports-free TV option.
This pivotal move comes as the industry has been competing with more people choosing to cut cable in favor of streaming services. This greatly affected sports channels and affected regional sports networks, which have long offered lucrative fees to leagues and teams, especially tough ones.
Diamond Sports Group, owner of the largest regional sports networking portfolio, filed for bankruptcy protection earlier this year. Other networks have launched direct-to-consumer streaming options that come with a price tag that doesn’t upend the long-running, lucrative pay-TV model. But they are often considered too expensive for consumers and can turn off potential streaming customers.
Charter, which owns two regional sports networks of its own, is looking to change the formula. Beginning in the third quarter, the company said it will relaunch its Spectrum-branded cable TV business as two new services.
Spectrum Select Plus will include the provider’s full slate of sports programming and regional sports networks, while Spectrum Select Signature will exclude certain sports programming at a discount.
Both options will be launched on a market-by-market basis across most of the United States of America.
Customers who choose the option with certain sports programming will receive direct-to-consumer streaming apps for the local sports networks in their area for free. Charter will also be able to market and sell the regional sports networking application to its broadband-only customers.
“This new model paves the way for a more flexible approach to the sport’s old packaging model, putting the focus where it needs to be, on the customer,” Tom Montemagno, charter’s executive vice president of acquisition programming, said in a news release. launch.
The company noted that sports network agreements have, historically, required distributors to pay for the rights to content and make their programs available to a large majority of subscribers—typically more than 80%. This is the case even if many of these clients never run the channel.
Pay TV billing typically breaks down the cost of regional sports network fees. National sports networks eg DisneyESPN’s ESPN is known to be one of the most expensive pay-TV distributors like Charter and DirecTV can carry.
Charter noted that the new two-tier system still gives sports fans what they want while giving non-sports viewers a more affordable option. The company also said the model supports sports networks pursuing streaming options.
As a distributor and owner, Charter is exposed to the problems that sports networks face. The company inherited two regional sports networks — Spectrum SportsNet and SportsNet LA, which broadcast Dodges and Lakers games — when it acquired Time Warner Cable in 2016. Charter also plans to launch a direct replacement for those channels.
Additionally, Charter and DirecTV on Monday announced a new distribution agreement for those regional sports networks.
As part of the deal, Charter agreed to a “much lower penetration threshold,” which would allow DirecTV to “better target its subscribers who want Lakers and Dodgers programming.” It would also allow DirecTV to provide cheaper and more flexible options to customers who are not interested in sports.
Dan Finnerty, CEO, Spectrum Networks, said: New release Earlier Monday, while viewing habits are changing, regular season sports programming remains popular.
“However, given that these customers represent a relatively small percentage of the overall video subscriber base, and recognizing the significant increase in direct-to-consumer options, the model for RSNs needs to evolve to reflect current market realities,” he said. Finnerty, Senior Vice President and General Manager, Spectrum Networks. “With this agreement, we are taking a step to change the business model so customers have more control.”
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