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Rutledge: OTT Is 'Playing With Fire' - Broadcasting & Cable

Rutledge: OTT Is 'Playing With Fire'

Charter chief says programmers risk turning $70 billion ecosystem into $7 billion
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Charter Communications CEO Tom Rutledge said entrenched video content providers' forays into the over-the-top space has some risks, including turning their large businesses into much smaller ones.

“I think for any entrenched video provider to begin breaking up their carriage in a big bundle and going over the top puts them at great risk of being a much smaller business,” Rutledge said at the UBS Global Media & Communications conference in New York. “The model today if your carried by cable and satellite is you get 100 million homes of distribution and you get to sell advertising against that entire universe. It’s hard to imagine selling that to niche markets or in an a la carte market where you would end up with similar penetration. If the whole market were sold a la carte today I think you’d take a $70 billion ecosystem and turn it into a $7 billion ecosystem. You see some people playing around the edges thinking there are incremental dollars. To some extent they are playing with fire.”

While there are over-the-top successes — mainly Netflix — Rutledge said that as more and more content companies are lured into distributing programs direct to consumers, the less valuable it becomes to pay TV operators like Rutledge. But that could also present an opportunity for distributors.

For the full story go to Multichannel.com.

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