Time Warner and Charter merger hinges on IPTV supremacy

Mega mergers are back in the spotlight as Time Warner lures another suitor in the guise of Charter Communications.

Streaming video and IPTV is central to the deal  with Charter Communications executives stating that  the acquisitions would create a stronger national player that would offer faster connectivity to service online video and gaming and in addition to new out-of-home wireless internet options.

Charter Communications is also pursuing the acquisition of Bright House Networks and if both transactions are executed, at the offer price of US$67.1 billion, would then form the US’s second-largest cable operator behind Comcast. 

The proposed new merged company would be named New Charter and would give the entity wide and diverse coverage of America.   Charter CEO, Thomas M. Rutledge, mooted the possibility of introducing a national streaming television service that would bypass the traditional cable subscription model.

“It is not just the small screens or the large screens in the house, it is the mobile screens and more,” Rutledge said.
The acquisitions would quadruple Charter’s customer base to about 24 million, compared with Comcast’s 27 million which will open the door to offering competitive services.

Rutledge warned that the new entity would not deter competition from online rivals like Netflix. He added that Charter had no plans to “block, throttle or engage in paid prioritization of Internet traffic.”

The deal still faces the hurdles of regulatory approvals.

Charter’s main shareholder, 74-year-old billionaire broadcast media mogul John C. Malone, is a strong advocate for streaming TV. "We’re certainly exploring that thought. But whether you can put an over-the-top product together today with the existing services that are in cable and make that work is unclear to us. It’s certainly something of interest," Rutledge added.

Analysts have noted that he development of Charter's video technology in recent times; including a shift to cloud-based systems, also make it a likely move.

"It’s very clear that Rutledge has  seen the writing on the wall and that Liberty and John Malone are giving him lots of advice about chasing where customers are, which is increasingly online," said OnScreenMedia analyst Colin Nixon.