Seibert: Consumers Will Drive Programming Cost Reductions
Cablevision CFO Says McCain's A la Carte Program, Others Will Depend on
Consumer Reaction
By: Mike Farrell
Multichannel News
May 15 2013 - 12:38pm
http://www.multichannel.com/cable-operators/seibert-consumers-will-drive-programming-cost-reductions/143318
Consumer reaction could be the biggest catalyst for programming cost
reform, Cablevision Systems vice chairman and chief financial officer
Gregg Seibert told an investment conference audience Wednesday.
Seibert, speaking at the JP Morgan Technology, Media and Telecom
conference in Boston, said recent initiatives by Sen. John McCain to
force a la carte options also could help foster reform.
“I anticipate over time we will hear more from consumers about the
increases in programming costs, maybe that will create some degree of
recognition from programmers that they are pushing the envelope a little
bit too hard here," Seibert said. "Maybe then Sen. McCain’s and other
initiatives in Washington will have more impact.”
Seibert did not want to speculate whether regulators would allow
operators to further consolidate their operations in an effort to gain
greater scale to rein in programming charges. But he noted that even
with companies the size of Cablevision, scale matters.
“My guess is the difference in programming costs between what a
three-million-subscriber MSO versus what an 18-to-20 million subscriber
MSO pays is fairly significant,” Seibert said. “Part of the question
might be what do you think of [Liberty Media chairman] John Malone’s
investment in Charter? That seems to have certainly gotten people
speculating more and more about additional consolidation.”
In May, Liberty completed a $2.6 billion investment in Charter for 27.3%
of its outstanding stock, a move that some believe could lead to further
consolidation in the industry.
Again, Seibert would not speculate, but added that Malone’s investment
is a validation of the cable business.
“Having a sophisticated investor come in, put that much money to work,
and listening to their recent comments, they certainly are expanding
Charter,” Seibert said. “[Charter CEO] Tom [Rutledge] bought Bresnan
from us, a transaction that is still on track to close in the third
quarter this year. I don’t think, however, the Charter’s investment
thesis is entirely focused on additional acquisitions.”
At Cablevision, Seibert said the focus continues to be on operations and
the company has invested more money in its plant, has increased mobility
offerings and built out its Wi-Fi network. He also noted a cost
efficiency initiative spearheaded by CEO James Dolan aimed at reducing
call volumes and truck rolls.
“We’re not interested in doing a wholesale cost cutting exercise,”
Seibert added. “We certainly don’t want to cut any areas that would
adversely affect the interface with our customers. Right now we are
targeted on efficiency. We are going to have continuing conversations
about that over the coming months and I am quite hopeful we will find
ways to bring the expense line down.”
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Associate Professor Fax (713) 743-3927
Political Science Mail: antunes at uh dot edu
University of Houston
Houston, TX 77204-3011
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