Charter Communications revamped video model didn’t drive a repeat of pay TV subscriber gains seen in Q4, but the operator’s first quarter losses of 51,000 net residential video customers were still notably better than results in recent years.
Amid efforts to rework video pricing and packaging alongside the inclusion of a suite of ad-supported versions of major streaming services in certain pay TV packages at no extra cost, Charter had consistently improved net video customer losses year-over-year and sequentially each quarter of 2025 – culminating in actual net pay TV sub gains of 49,000 in the final three months of last year. The fourth quarter marked Charter’s first period of positive net pay TV additions since a short-lived decline reversal seen in Q2 and Q3 of 2020 amid the pandemic.
And while the positive subscriber momentum of Q4 didn’t continue into the three-month period reported on Friday, Charter still showed signs of improvement for video – a segment of the business that it sees it sees not as a growth vehicle, but in part as a retention tool as the operator seeks to add value, keep customers and sell more of its higher-value products like broadband and mobile.
Charter’s Q1 2026 pay TV subscriber losses of 51,000 compare favorably to the 167,000 it lost in the same period a year ago and are significantly better than the 392,000 it lost in Q12024.
Charter’s residential video base now stands at about 12 million – which is set to grow via the operator’s pending $34.5 billion acquisition of operator Cox Communications, bringing roughly 6 million video customers and expanded footprint to penetrate.
Cable operator peer Comcast released Q1 earnings a day earlier, reporting net video subscriber losses of 322,000, for a base of about 11 million.
In the earnings release, Charter attributed the improvement to simplified pricing and packaging, as well as benefits from including programmers’ streaming apps in Spectrum’s expanded basic video packages. Charter CFO Jessica Fischer also noted a primary driver of the improvement was due to much lower video downgrades and churn year-over-year thanks to the new packing launched in late 2024, Xumo and the so-called Seamless Entertainment offering that includes ad-supported streaming apps in select pay TV packages at no additional cost.
Charter Q1 video revenue of $3.25 billion declined 9.2% year-over-year.
Despite losses, video shows signals for helping churn
Wall Street didn’t react favorably to Charter’s Q1 earnings, in which it also reported losing 120,000 internet subscribers and adding 368,000 mobile lines.
However, in a note to clients, One Touch Intelligence analyst Michael Grebb questioned whether Wall Street’s reaction to Charter’s Q1 wouldn’t have been so stark had the fourth quarter video net adds not set expectations as high – and where he expects quarterly fluctuations in the video subscriber net add-loss arena going forward.
“While Charter execs were dutifully cautious in their tone in Q4, it was perhaps inevitable that the street would view such a milestone as the beginning of the end of cord cutting,” wrote Grebb. “A more realistic assessment is that Charter’s strategy of wrapping ad-supported streaming services into its linear TV bundle is clearly working, with promotional and marketing activity helping to push positive gains in some quarters while other quarters show improving losses.”
As Grebb’s note called out, Charter CEO Chris Winfrey on Friday’s earnings call emphasized the increased utility and value that pay TV packages with bundled streaming apps are bringing for customers – and showing benefits for churn reduction.
“Over 50% of our expanded basic video customers have activated at least one of our included streaming apps, with those activating taking nearly four streaming apps on average,” Winfrey said.
And customer churn for expanded base video customers who activate an app “is one-third lower, and it is meaningfully lower across all customer tenure.”
Those churn benefits mean impacts for other products offered by the operator, Winfrey noted.
“Keep in mind that nearly all video customers are also broadband customers, so that is a big help,” he said.
In addition to simplified pricing and packaging, Charter last year debuted a Spectrum App Store, where customers can activate, manage, and upgrade apps included in their video package and signup for streaming services a la carte.
Grebb also said that Wall Street might “be underestimating the upside to Charter’s pending Cox acquisition” – highlighting quotes from Winfrey who categorized Cox’s low penetration of mobile and video as “major opportunities” to bring its new product offers to market quickly.
On the earnings call, Wall Street analysts noted Cox has higher broadband average revenue per user (ARPU) than Charter for its standalone product. It’s a fact Winfrey didn’t shy away from and said lower standalone broadband pricing is part of the rationale for the deal, but explained how the company intends to look at what full customer ARPU does over time (and a metric where he said Charter and Cox are not that different currently) through the merger and margins at a household level versus standalone products.
“Our goal is to use video and mobile, given the super-low penetration that exists for those products at Cox, to make sure that the customer ARPU is intact and could potentially likely increase over time, and to drive margin in there,” Winfrey commented. “As a result, you will end up with a financial profile and a trajectory that is preserved based on providing more value in the household. The churn rate at Cox is higher than ours, so I think we have a real opportunity to drive benefits there.”
Meanwhile, Grebb acknowledged “it could take time to fully exploit Charter’s streaming-linear strategy,” as the inclusion of streaming apps in pay TV packages cost the operator $218 million in Q1 programming costs alone.
The analyst noted that paying nearly $1 billion a year to offer pay TV customers streaming apps at no extra cost “isn’t a small line item,” although believes it could pay off thanks to retention.
“But if those apps also hold down churn by 33% and seriously dent cord cutting, the expense will be well worth it,” wrote Grebb.
Charter total first quarter revenue of $13.6 billion was down 1% yoy, primarily driven by lower residential video revenue. Charter Q1 Adjusted EBITDA of $5.6 billion was down 2.2% yoy. Net income totaled $1.2 billion in Q1.