The streaming wars have not only begun, they're in full swing. At this point, there's little debate as to whether television will unbundle -- it's only a matter of how and with what consequences.

Just since the beginning of the year, AT&T (T -0.27%) has announced a reorganization of its media wing, further integrating Turner, HBO, and Warner Bros., with a skinny bundle likely on the way. Comcast's NBCUniversal announced its own skinny bundle, coming in 2020. And Disney will likely have three streaming services out soon -- one for Disney-branded content, another for ESPN, and another for Hulu. 

Now Charter Communications (CHTR 2.27%) has thrown itself into the mix. What's interesting about Charter's entry is that Charter doesn't actually own any content itself, but is rather merely a very large broadband, cable, and mobile distributor through its Spectrum brand. Nevertheless, Charter just unveiled an over-the-top package called Spectrum TV Essentials due out later this month.

What content might be in Charter's bundle? In what seems like an obvious marriage, it's content from virtually all remaining content companies that haven't yet been acquired by a large cable or wireless company. The result is a somewhat odd channel mix. 

Still, Spectrum Essentials' low price point could potentially lure budget-conscious, broadband-only customers... you know, cord-cutters! 

Check out the latest earnings call transcript for Charter Communications.

A pair of scissors cuts a coaxial cable in front of a background of hundred-dollar bills.

Image source: Getty Images.

A collection of outcasts

Charter's bundle will actually have a lot of variety, from news and lifestyle to drama, comedies, and kids' shows -- but only from certain content creators, and usually not the leaders. The participating companies are Viacom, Discovery Inc., The Hallmark Channel, AMC Networks, A&E Networks (a joint venture between the Hearst Corporation and Disney), and a host of independent and private channels such as Bloomberg and Cheddar.

You can find the full list of channels here.

I was actually fibbing a bit when I said Charter didn't own any of its own content -- I should have said it doesn't own any of its own content yet. In October, Charter hired a head of development to spearhead its new original content venture called Spectrum Originals. 

Charter also owns some 26 local news stations, 10 of which the company launched just in 2018. The local news and original programming will also be a part of the Spectrum Essentials bundle.

Doing it the Charter way

Charter is taking a more modest approach to the content game, creating a few originals while partnering with third-party content companies that have yet to find a suitor. For Charter, the build-plus-partner game is a lower-risk and cheaper option than buying its own content company a la AT&T or Disney. It's also the strategy several large tech companies are employing to try to break into the content game.

It may also be a strategy of necessity. Charter already has a rather significant debt load, with a debt-to-EBITDA ratio just under 4.5 -- the result of the 2016 Time Warner Cable and Bright House Networks acquisitions. While not outrageous, a leverage ratio that high could make further acquisitions difficult.   

A low-cost option, albeit without favorites

While Charter Essentials is fairly comprehensive, it does lack many favorites that have already been snapped up by conglomerates. For instance, there's no cable sports or broadcast stations. Essentials also doesn't have any premium channels, though the AMC network is fairly close to a commercial-free premium option. Essentials also lacks many category leaders such as CNBC, but usually has alternatives such as Bloomberg or Cheddar for financial news, as an example. 

Nevertheless, Charter's bundle is significantly cheaper at $14.99 than other new over-the-top offerings. AT&T also has a low-cost, $15-per-month option in WatchTV, but that has only 35 channels or so -- lower than Essentials' 60-plus -- and mostly from the same content partners as Essentials.

AT&T's more comprehensive streaming bundle DirecTV Now does have about 65 channels on its lowest tier, but that tier also costs about $40 per month. However, DirecTV Now does include most genre leaders (including ESPN), all major broadcast networks, and category leaders like CNBC, as well as the niche channels found on Essentials. Still, to get sports and genre leaders will cost almost three times the price of Essentials, at least. 

Carving out a niche

Charter appears to want the lowest-cost streaming option in its footprint -- an interesting strategic development in its rivalry with AT&T. Going forward, consumers will likely have more and more options to choose from for their skinny bundles, and no one really knows how it will all shake out.

The transition from the traditional cable bundle to the plethora of over-the-top streaming services will certainly be interesting to watch in 2019 and beyond.