How Low Can You Go?

Charter raised eyebrows Tues when it acknowledged that its began marketing $69.97, 12-month triple-play bundles system-wide to select, targeted customers. The bargain basement price only gets sub lifeline basic video (27 channels), and therein lies the MSO’s strategy. “It allows us to cross sale and upsale so that our final RPU and profitability is about the same as our $99 customer,” CEO Neil Smit said during UBS’ media conference. ARPU is around $120-$130 for it, he noted. Charter started trialing the $70 offer in a couple markets earlier this year, opting to take it across the entire enterprise because of the high response rates. The promo actually goes after higher-end customers because of the upsale potential, and it’s primary purpose is to drive call volume, Smit said. At least one analyst has faith. “We believe Charter has spent a considerable amount of time under CMO Bob Quigley evaluating the impact of various package pricing and the resulting ARPU,” Pali’s Rich Greenfield wrote. The analyst questioned why more MSOs haven’t tried cheaper triple-play offers given how Cablevision has maintained both the lowest offering ($90) and highest triple-play ARPU ($130).