Rutledge flagged password-sharing of authenticated streaming services as “a real issue” for MVPD providers during a conference call with Wall Street analysts on Thursday. The CEO was critical of cable programmers for not taking more steps to police the users of those service. He said the potential for cable operators to sell video packages to college students was diminished by the fact that students frequently use other family members’ authenticated passwords to access channels.
“The lack of control over the content by the content companies has reduced the demand for video — you don’t have to pay for it,” Rutledge said during Charter’s third quarter earnings conference call.
Charter’s numbers were solid with net video subscriber gains of 12,000, defying the conventional wisdom about cord-cutting and surprising analysts.
But as Charter is poised to become the nation’s second-largest cable operator with its pending acquisition of Time Warner Cable and Bright House Network, Rutledge is clearly concerned about leakage via TV Everywhere apps. In his view, content companies are suffering from a lack of experience and understanding of security in the streaming realm, or what he called “a complete lack of control and understanding of that space.”
“They haven’t been in that business before. They don’t seem to have thought through what the implications are,” Rutledge said. “They have devalued their own product by their inability to secure it. It’s devaluing the product by not managing it.”
(Pictured: Tom Rutledge)