On Tuesday, during an investor conference call, Chris Winfrey, CEO of cable giant Charter Communications, spoke about the impact of artificial intelligence, including on costs.
During a livestreamed appearance at the Goldman Sachs Communacopia + Technology Conference in San Francisco, he was asked whether AI is hype or reality. “I think AI is very much reality. The question is, how fast is it really coming and how fast is it going to be implemented?” he said. “We’ve been investing, really starting with machine learning, and now increasingly in AI, for a while now, but really from a service function. And by that I mean investing not just in customer-facing machine learning and AI capabilities, through IVR [Interactive voice response]via chat, everything you could imagine, but probably even more to improve the quality and ease of the work our front-line employees do.”
That could include using AI to provide “a better set of information to the agent that allows it to make a better recommendation and, increasingly, not even need it because the machine is actually listening to the conversation, doing actual speech-to-text translation,” Winfrey said. “There's not 10 best ways to solve this problem. There really is one, and that's providing it to the agent in a way that allows it to come to a better answer faster and actually show more empathy along the way. [is the goal]. That works not only for the customer, of course, but also for our agents in an environment where you have turnover and you have training costs and you want to have our people not just here for a short time, but to develop a career with the company. And having ownership means a better service experience for customers.”
Is there any financial benefit to Charter in using AI and machine learning? “As part of our investment in services on the cost side, we’re already seeing the benefits,” Winfrey said. “There’s going to be a flywheel that happens, and when it kicks in, it will have a significant impact. [on] not just the service capabilities, the service infrastructure, but also the cost.” But Charter's CEO added: “It's a little bit difficult to estimate the timing of that. I think it's starting to happen, but I think there's going to be some bigger, more dramatic steps along the way.” He didn't provide further details.
Asked how early the AI Opportunity Charter was being introduced, Winfrey said it was only “in the first or second inning.”
Charter, in which John Malone’s Liberty Broadband has a major stake, unveiled a new multiyear carriage deal with AMC Networks last week, 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 make AMC+ available to Spectrum TV Select customers at no additional cost, the latest carriage deal to include streaming services, similar to Disney’s deal that included Disney+.
Winfrey on Wednesday mentioned the AMC deal as part of a broader discussion of better aligning Charter’s content assets and relationships for the streaming era. “We haven’t fully leveraged the resources we have to support the internet,” including its video and mobile offerings, she said at the Goldman conference. “We had moved away from video bundling because the value proposition, or the value proposition to consumers, had diminished over time as programmers increased the cost of programming, didn’t provide flexibility, and then started selling with direct-to-consumer applications,” the Charter CEO said. “We’re not there yet. We have a long way to go to operationalize the deals that we’ve already done. But we think now that the ability for us to put that video fee on a broadband bill makes more sense because there’s real value behind it. These DTCs with the one we just announced, the latest of which is AMC+, are $40 in DTC at retail that the customer no longer has to pay. [for] twice.”
By leveraging its resources in this way, “we can benefit the Internet, which is very similar to what cable has done historically in the past,” while “getting higher average revenue per user (ARPU) … and actually a 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 same period a year earlier. It also lost 154,000 residential internet customers, mostly due to the end of government subsidies from the Affordable Connectivity Program for Low-Income Households, which will continue to impact results in the near term, Winfrey said again Wednesday without providing more specifics.