Charter CEO Chris Winfrey Discusses AI Impact and Streaming Partnerships

Charter CEO Winfrey says AI is 'very much a reality' (CHTR)

Chris Winfrey, the chief executive of Charter Communications (NASDAQ:CHTR), believes artificial intelligence is not just a hype but a reality, and his company has invested in the technology and is benefiting from it already. "I think AI is very much reality. The question is, How fast is it really going to come, and how fast is it going to be deployed?" Winfrey said at the Goldman Sachs Communocopia + Technology conference on Wednesday. "We've been investing in, really starting with machine learning and AI now increasingly for some time, but really from a service function, and by that, I mean not only investing in customer-facing machine learning and AI capabilities... but probably even more so to improve the quality and the ease of the job that our frontline employees do." "So, you know, that can include the utilization of machine learning and now AI to provide a better set of information to the agent that allows them to make a better recommendation and increasingly not even have the need to make the recommendation... So it's part of our service investment, and so on the cost side, we're already seeing the benefits of that." Speaking on subscriber losses due to the expiry of the Affordable Connectivity Program, Winfrey said the voluntary disconnects for the company continue to be lower than what had been expected for the third quarter. "So the majority of the non-pay disconnect that we'll experience will be through September and October and a little bit inside of November." When asked about mobile penetration over the long run to boost company presence, Winfrey said, "That'll take time, and it takes, literally, digging them out, as we say in cable, to get them to convert over time." On the new iPhone launch and consumer behavior with regard to upgrading their smartphones, Winfrey said his company's strategy has not changed, which has been about delivering "the best speed in mobile and the best price for the monthly service." "It's never been about subsidizing phones because customers have the ability to go finance with us or somewhere else and really trying to keep their bill as low as possible with the highest quality product. So, I never say never, but we haven't been in the significant subsidizing business. We will provide initial one-time credits... But I think we stand behind the quality and the pricing of our product and service and will let customers decide how and when they want to upgrade their devices, and we help facilitate that for them." Winfrey went on to speak about the company's relationship with Verizon. "We have a very long-term relationship with Verizon... And it's a good relationship, and we want to keep going with it. I think it's a symbiotic relationship... Even from a Verizon perspective, if they counted the Comcast and Charter mobile lines, I think they'd be, by far, the fastest-growing M&O in the business. And if you include the revenue and the EBITDA that we provide, it's good, it's healthy, and it's a symbiotic relationship. And so I don't see any need for major changes from where we're going."

Charter CEO on the AI Opportunity and the Value of Including Streaming Services in Carriage Deals

Kevin Hart Series 'Fight Night' Is a Hit, and "the Olympics Are Back," Comcast President Says Cable giant Charter Communications' CEO Chris Winfrey discussed the impact of AI, including on costs, at an investor conference on Tuesday. During an appearance at the Goldman Sachs Communacopia + Technology Conference in San Francisco, which was live-streamed, he was asked if AI is more hype or reality. "I think AI is very much reality. The question is: how fast is it really going to come and how fast is it going to be deployed?" he said. "We've been investing in, really starting with machine learning, and AI now increasingly, for some time, but really from a service function. And by that I mean not only investing in customer-facing machine learning and AI capabilities, through IVR [Interactive voice response], through chat, all the things you might imagine, but probably even more so to improve the quality and the ease of the job that our frontline employees do." That can include the use of AI to provide "a better set of information to the agent that allows them to make a better recommendation, and increasingly, not even have them need to make the recommendation because the machine is actually listening to the conversation, doing real voice-to-text translation," the Winfrey said. "There aren't 10 different best ways to solve this problem. There's really one, and providing that to the agent in a way that allows them to get to a better answer faster and actually show more empathy along the way [is the goal]. That works not only for the customer, obviously, but it works for our agents as well in an environment where you have turnover and you have training expenses and you want to have our employees not just here for the short term, but to develop a career with the company. And having tenure means a better service experience for the customers." Is there any financial upside for Charter in the use of AI and machine learning? "As part of our service investment on the cost side, we're already seeing the benefits," Winfrey said. "There will be a flywheel that takes place, and when it catches, it'll be a significant impact [on] not just the service capabilities, the service infrastructure, but the cost as well." But the Charter CEO added: "It's a little bit difficult to estimate the timing of that. I think it's already starting to happen, but I think there will be some bigger, dramatic steps that come along the way." He didn't provide further details. Asked how early in the AI opportunity Charter was, Winfrey argued it was only "in the first or second inning." Charter, in which John Malone's Liberty Broadband owns a major stake, last week unveiled a new multiyear carriage deal with AMC Networks, a year after its carriage dispute with The Walt Disney Co. made headlines. While financial terms were not disclosed, Charter and AMC said the new pact will see AMC+ made available to Spectrum TV Select customers at no extra charge, the latest carriage deal to include streaming services, similar to the Disney deal that included Disney+. Winfrey mentioned the AMC deal on Wednesday as part of sharing broader thoughts on better aligning Charter's assets and content relationships for the streaming age. "We have not made full use of the assets that are available to us to support Internet," including its video and mobile offerings, he told the Goldman conference. "We had moved away from bundling video because the price-value proposition, or the value proposition to consumers, had gone down over time as programmers increased the cost of programming, didn't provide flexibility and then started to sell around with direct-to-consumer applications," the Charter CEO explained. "We're not there yet. We've got still a ways to go to operationalize the deals that we've already done. But we now feel that the ability for us to put that video charge on a broadband bill makes more sense because there's real value that sits behind it. These DTCs already with what we just announced, the latest being AMC+, is $40 of value in retail DTCs that the customer no longer has to get charged [for] twice." By making better use of its assets that way, "we can advantage internet, which is very similar to what cable's done historically in the past," while "getting higher average revenue per user (ARPU) ... and actually better margin in cash flow per household," Winfrey said. Charter lost 393,000 residential pay TV subscribers in its second quarter, compared with a loss of 189,000 customers in the year-ago period. It also dropped 154,000 residential Internet customers, due mainly to the end of Affordable Connectivity Program government subsidies for low-income households, which will continue to affect results over the near term, Winfrey again signaled on Wednesday without providing more detailed guidance.