Charter CEO Tom Rutledge Says Netflix Effort To Limit Password Sharing Is “A Point We’ve Been Trying To Make For Years”

Charter CEO Tom Rutledge says Netflix’s recently announced plan to limit password sharing is “a point we’ve been trying to make for years.”

Asked by an analyst during the company’s first-quarter earnings call if he wanted to say “I told you so,” he replied, “Yeah, well I did tell you so.” Charter has indeed been known for taking a strict stance on the matter.

Netflix recently launched tests in three markets outside of the U.S. of a fee system that allows password sharing but at a cost. The effort could help recapture forfeited subscription revenue from the estimates 100 million households watching Netflix on someone else’s dime.

“We knew it’s a problem,” Rutledge said. “It’s not just a problem for the company that’s not controlling its passwords. It’s a problem for everybody in the industry because all of that content that’s used without anybody paying for it affects the supply and demand of all content, not just the provider that’s selling the content, which diminishes the value of content for everybody. That’s the point we’ve been trying to make for years.”

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The exec’s comments followed Charter’s report of its first-quarter results. The No. 2 U.S. cable operator had earnings per share of $7.05, ahead of Wall Street estimates. Revenue rose 5% from the year-ago quarter to $13.2 billion, matching analysts’ forecasts.

Charter shed 123,000 residential video customers in the quarter, finishing with 15.1 million.

Rutledge was asked about the company’s announcement this week of a joint venture with Comcast. The companies are teaming on a 50-50 streaming initiative based on Comcast’s Flex system, which enables streaming through connected devices and TVs.

The streaming setups, which will compete with Roku, Amazon Fire and others, relies on internet protocol, or IP, as opposed to the more traditional spectrum technology found in traditional set-top boxes. Asked if he sees the Flex becoming the dominant video hub for Charter in the coming years, Rutledge responded, “The answer is yes. I expect that, incrementally, most of our customer base will be IP. That spectrum will be recaptured over time and there are various ways of compressing that spectrum as you market your way into the IP space.”

The recaptured spectrum can be used to “increase broadband speeds and/or handle broadband capacity that’s required as a result of the use of overall data,” he added.

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