On the back of efforts to bundle streaming services into pay TV packages at no extra cost, Charter Communications in the third quarter again saw traction, as its residential video customer losses drop significantly versus recent prior quarters to 64,000.
But even with Q3 customer results serving as a compelling proof point for Charter’s reimagined video model, CEO Chris Winfrey was sure to reiterate to Wall Street that the operator’s goal is not to return video to growth or save a declining pay TV ecosystem. Instead, it’s seeking to use video, including streaming, as one way to make packages stickier and offer consumer value – ultimately to sell more and retain customers of its higher-margin broadband and mobile products as it sees continued and intensified competition in that space. In Q3 Charter lost 108,000 residential internet customers and increased mobile lines by 473,000.
And although efforts on video helped improve pay TV customer losses, Charter still said quarterly declines in video revenue (as well as advertising) drove a 1% year-over-year drop in total Q3 revenue of $13.7 billion. Video revenue of $3.38 billion in the quarter was down 9.3% year-over-year.
Charter attributed the revenue decline to fewer video customers, a higher mix of lower-cost packages within the video base, as well as $106 million of costs allocated to programmer’s streaming services and netted within video revenue (versus $25 million in Q3 2024).
Still, the bundling effort that started with Disney carriage negotiations back in 2023 and has grown to include ad-supported tiers of major SVODs that Charter says collectively equate to $116 (and soon to be $128) in monthly streaming retail value, appeared to bear fruit from a subscriber loss perspective.
Charter’s Q3 2025 residential video losses of 64,000 shrunk massively compared to losses of 281,000 in the same period a year ago. And it follows Q2 improvement when Charter narrowed video losses to 73,000, versus 393,000 lost in Q2 2024. Its residential video base now stands at about 12 million, or about 3.3% smaller than it was as of Sept. 30 2024.
Charter’s earnings announcement attributed the video customer improvement to “new and simplified pricing and packaging” that launched about a year ago (where video was once again marketed in the bundle alongside broadband) and “benefits from the inclusion of programmers’ streaming applications in Spectrum’s expanded basic packages.”
The operator recently further expanded streamers available in its offer, including Hulu, as well as the flagship ESPN app and new Fox One streamer this fall. It now has a suite of 10 steamers included in Spectrum pay TV packages, with Discovery+ and BET+ joining the mix soon. Last month it launched a Spectrum App Store, where pay TV customers can find, activate and manage included streamers and upgrade to ad-free versions by paying the retail price difference. In the app store Charter’s non-video or broadband-only customers can also purchase DTC apps a la carte.
Of Charter’s total 28.86 million residential customer relationships, about 58% are non-video.
It is worth noting that while Charter says these SVODs are available in certain pay TV packages at no extra cost, the operator implemented a $5 bump pay TV price bump over the summer.
Apple pie?
Asked by investment analysts on the earnings call about early results from the video strategy, Winfrey said it might sound like “apple pie” but “our sales are up, churn is down on video relative to prior periods and the activation of the apps has really accelerated.”
The effort had been growing steadily absent heavy or much dedicated marketing by Charter, which was still working to get operational aspects like easier activations and upgrades in place for consumers, Winfrey noted.
But with launches of the ESPN, Fox One and Hulu in the packages, alongside the digital app store “there was a accelerated pickup” of included DTC app activations recently. And for those that do activate included streaming apps, he said “the churn reduction is significant.”
Still, Winfrey made clear “our goal here…isn’t to have positive video adds” nor is it “to save the video ecosystem, because it’s pretty challenged.”
Instead, he said the aim is have a unique and differentiated product to put in front of connectivity customers “in a way that generates new ways to market and acquire customers and has retentive value.”
Talking about video benefits, the CEO cited a belief in a high-quality video product that offers value and utility to consumers in combo with future bandwidth-rich products as a competitive advantage for its connectivity services. Video also “remains a significant driver of lower customer churn and it can help drive acquisition,” Winfrey said.
On the churn front, while Charter sees real opportunity to keep improving the metric, that isn’t the operator’s main challenge currently. What is, per Winfrey, is the operating environment around internet and mobile.
There, he said the environment remains competitive, including new and expanding entrants, and is also impacted by macro trends like slow household formation (meaning fewer new households to potentially penetrate and add) and low rates of people moving – intensifying competition for a limited number of potential gross adds that are available.
Amid more competition on broadband and mobile, Winfrey noted the revamped pricing and packaging strategy produced a higher number of total products sold per connect, increased gig-internet speed attach rates, more mobile lines per customer and “a video selling rate that has improved substantially with lower customer churn from bundling, despite lower selling opportunities.”
Additionally, Charter, like other video operators, has seen significant financial pressure on video margins as consumers continued to leave the pay TV ecosystem.
And while not the primary reason for investing in the video product, Charter CFO Jessica Fischer said if it can slow down the rate of contraction - even if the operator can’t fully stop video margins from shrinking - “that really allows us to be in a better place to highlight the growth that we see across other areas of the business” and drive financial growth of the broader company by having more stability in video.
Tweaking the video product pitch?
Winfrey also responded to analyst questions regarding how Charter talks about or markets its video product to consumers, where the CEO previously mentioned a potential streaming-first video pitch that would make traditional linear pay TV the “no extra cost” or “value-add” included element.
Essentially, he suggested it comes down to positioning the same product or package to the consumer in a slightly different way to make it resonate.
So for example, if there’s an older demo consumer, Charter might pitch the product as a pay TV video package for around $100 that also gets you more than $125 worth of streaming apps included.
But to a younger consumer who might not at all be interested in signing up for a linear pay TV package in the first place, Charter could just reposition it to highlight the streaming apps. In that case, the product pitch would focus on $125 monthly retail streaming app value for around $100 – and with that you also get a full traditional linear video or pay TV lineup included.
“That’s the exact same product. So there’s no change in economics there for us, but depending on the audience, either way, we’re saving them lots of money and it’s valuable to them,” he said. “It’s just expressed in a different way.”
Solving for ‘Where’s my Game?’
As for positives of the video strategy, Winfrey said new partnerships with programmers and leagues provide benefits “for all of us” – as Charter sees a position for itself to help address the consumer struggle of “where’s my game?” around sports streaming as rights migrate and games splinter across services.
Through its Xumo Stream Box device (via the Xumo joint venture with Comcast) it provides integrated search and discovery across streaming and linear pay TV – potentially helping to simplify the fragmentation problem for consumers.
As of October Charter had deployed about 5 million Xumo Stream Boxes.
Layer capabilities of the Xumo Stream box on top of the streaming apps, and “it’s an interesting and compelling way to use video to drive our connectivity services,” Winfrey contends.
Immersive entertainment, Charter contends consumers and products need to catch up
The future of entertainment is another argument company leaders made for Charter’s approach to integrated or converged offerings and investments in the underlying connectivity and broadband network.
Comments suggest the company believes bandwidth needs will come into play (and be a competitive advantage/differentiator for the operator) to support applications and deliver data speeds required if consumers adopt more immersive entertainment experiences.
Charter itself took a recent step to make those bandwidth-heavy applications and low-latency-needed experiences a (virtual) reality.
Last month it announced a partnership with Apple to record and distribute selection of live LA Lakers games starting in January that will be available to Spectrum internet and video customers in LA, Nevada and Hawaii via the Spectrum Sportsnet immersive app on the Apple Vision Pro. They’ll also be distributed nationally the next day throughout the Spectrum footprint and on the NBA immersive app.
Distribution of the games on Vision Pro is meant to give viewers the feel that they’re watching courtside, with an experience Winfrey touted on the earnings call as “amazing.”
“You can see how immersive content will apply across next generation devices in the future,” he added.
The immersive live video experiences Charter’s distributing with Apple are filmed in 16K and require consistent throughput of 150 Mbps to the home, even when distributed in 8K through the Vision Pro.
If and when these types of immersive entertainment experiences become more widely available and adopted by consumers at large remains to be seen.
In a statement released alongside Q3 earnings, Winfrey also suggested that Charter’s connectivity capabilities are, for now, ahead of consumer behaviors and applications that would utilize them – and for the time being, it’s focused on offering value.
“We are operating well in a competitive environment, where consumer products and applications haven't yet caught up with our uniquely differentiated network capabilities,” said Winfrey in a statement. “In the meantime, our service delivery improvements are being recognized, and we are saving customers hundreds and often thousands of dollars per year with our products. And our focus is on free cash flow growth for shareholder value creation."
Charter reported Q3 free cash flow of $1.6 billion, in-line with the prior year period. Charter’s Q3 Adjusted EBITDA was $5.6 billion, down 1.5% year-over-year, while net income totaled $1.1 billion in the period.