Charter Communications reported markedly reduced video customer losses in the fourth quarter, bleeding just 123,000 subscribers to its Spectrum-branded pay TV services from October through December last year versus 257,000 during the same period of 2023.
In September, in coordination with its “Life Unlimited” national marketing campaign, Stamford, Conn.-based Charter, the largest pay TV company in America, returned video to its primary service bundles after an absence of several years.
With Spectrum TV packages now infused with ad-supported versions of major subscription video streaming services, at no additional cost to Charter customers, Christopher Winfrey, CEO for the cable operator, declared, “I think video can become an asset again.”
Winfrey said Charter’s video product has moved back to an “environment” where it can be “creatively packaged” again with home broadband and mobile, and is once again capable of providing “meaningful value for our customers.”
“The benefit you saw to net additions in the fourth quarter was simply a function of re-bundling video with connectivity sales,” Winfrey told equity analysts during Charter’s Q4 and full-year earnings call Friday.
“The video product had become commoditized and was priced too high. We were unconvinced at the time that it was adding value, so we moved it away from our [primary] bundle,” Winfrey explained.
Charter still has work to do on its newly invigorated video strategy. For example, after securing bundling rights to Peacock during program licensing negotiations with NBCUniversal late last year, the company is still integrating the streaming service into its pay TV products. And Charter still wants to create an easy on-ramp for customers to upgrade the SVOD services it offers from ad-supported to ad-free tiers, if they so choose. And it also wants to create an easy way for customers to authenticate all the SVODs in their Spectrum service at once.
But the value is undeniable. As the chart below, included in Friday’s Charter earnings presentation, shows, subscribers to Charter’s Spectrum TV Plus tier will have at-no-extra-cost access to streaming services collectively priced at $82 a month, once Charter integrates all its recently-secured bundled SVODs.
Winfrey said this packaging strategy represents an effective partnership between Charter and its content partners, who are now in the habit of providing access to their major streaming platforms. He also described Charter's new dialectic with Hollywood a vast improvement over the previous way of doing business, during which the pay TV operator and programmers would meet “every four or five years to do battle” during program licensing negotiations, a paradigm Winfrey described as “a zero-sum game.”
Charter’s improved video metrics came as the cable operator reported 177,000 lost broadband subscribers during the fourth quarter, a core-business metric driven in large part by the Republican-led defunding of the American Connectivity Program (ACP). This subsidy for high-speed internet, made available to disadvantaged Americans, ran out of money last year. Charter lost more than 450,000 ACP customers in 2024, but it believes the worst of the impact from the lost subsidy is behind it.
Like other U.S. cable operators, Charter has also been losing ground in broadband sales recently to what it pejoratively calls “cell phone internet,” which is cheaper fixed-wireless-access home broadband being successfully marketed by T-Mobile, Verizon and, to a lesser extent, now AT&T. Collectively, the three U.S. wireless companies added 1 million FWA subs in the fourth quarter alone.
Charter also lost customers in Florida during Q4 following the devastation caused by Hurricanes Helene and Milton. (The recent fires in Los Angeles, meanwhile, caused the loss of around 16,000 passings, but they didn’t factor into Friday’s report as these disasters occurred in January).
On Thursday, the nation’s other huge cable company, Comcast, reported 139,000 net lost broadband customers, then watched its stock price crater 13% — a jarring outcome for a telecom company known for its largely stable Wall Street presence.
But that wasn’t Charter’s fate on Friday, with the operator reporting a 1.6% uptick in Q4 revenue to $13.9 billion, which was above forecasts.
Charter stock was up more than 6% in early-day trading Friday.