Charter CEO Talks Cord-Cutting, Merging With Time Warner Cable

"The whole MVPD marketplace has shed about 3 million customers over five years how," Tom Rutledge said.

Charter Communications CEO Tom Rutledge downplayed the threat of cord-cutting on Wednesday, even as some on Wall Street obsess over subscription losses at ESPN.

"The whole MVPD [multichannel video programming distributor] marketplace has shed about 3 million customers over five years how," he said. "Some people are talking about Disney, with ESPN losing 11 million customers over that period of time. … I do think there will be some chipping around the margins."

Rutledge was speaking at the MoffettNathanson Media & Communications Summit in New York.

"It used to be when a young guy went off to college, if he lived off-campus, he'd subscribe to cable to get ESPN, but now he gets it over-the-top from his parents' account," he said. "So a lot of the loss on margin is really about lack of security and the inability of content companies — which are becoming distributing companies — controlling where their product goes."

He added: "If you look at the whole pie, … the vast majority of people are still subscribing to a video package — and an MVPD package, at that."

Rutledge said that after closing the acquisition of Time Warner Cable a year ago he discovered the company's 90,000 different promotional offers, and many customers simply canceled the service when their particular promotion ended. "It was a Turkish bazaar," he quipped.

He said that the $60 billion merger deal was nicknamed "Safari," and that the process was "long and arduous" due in part to regulatory issues.

"I guess we found Livingstone on the way," he joked.

He said Charter's cable passes 50 million homes but only 26 million are subscribers, so growth will come via marketing to the noncustomers and possibly through more consolidation, though he acknowledged there's not many more companies left for Charter to acquire.

"I love the cable assets and think they're good," he said. "If they were available, they would be interesting to me."

Less interesting, he said, would be the acquisition of a content company, a la AT&T-Time Warner and Comcast-NBCU.

"You have to run it as a programming business," he said. "It's hard to run it for your own internal purposes. I see that as a fundamental issue with owning content."