Altice USA on Thursday reported the loss of 64,300 residential video subscribers in the fourth quarter, up narrowly from the 62,200 customers it lost in the same period of 2023. However, based on results from its launch of new tiered pay TV packages back in October, as well as a more rigorous programming agreement strategy, executives for the New York-based company cited numerous green shoots for their long-waning linear video product line.
The percent of total new or returning customers added in the quarter who chose to subscribe to video when purchasing services from the provider — the so-called video gross add attachment rate — was up 200 basis points quarter-over-quarter to about 20% in the October through December period, Altice USA said. Average revenue per video customer was up 7% YoY. And video cost inflation, driven by program licensing increases, declined to 4% for the full year 2024, from a rate for 6%-8% over the past several years. The cable company describes its new strategy as “rationalizing” its program licensing agreements. The company said it trimmed program licensing costs by $200 million in 2024, a result partly driven by customer losses.
“We’ve engaged thousands of customers, and they’ve really embraced, our new video offerings,” said Altice USA CEO Dennis Mathew.
With all of this noted, one equity analyst during Thursday’s Q4 earnings call asked about negotiations with MSG Networks, the regional sports network home of the NBA’s New York Knicks and the NHL’s New York Rangers and Islanders, as well as New Jersey Devils. The channel has been blacked out on the cable operator’s Optimum system since the beginning of 2025 amid a sometimes ugly program licensing dispute.
“We’re putting the customer at the center of the negotiation” Mathew said. “We don’t believe the customer should be forced to pay for content they don’t watch."
Mathew didn’t address MSG head-on, but equity analysts probably received the message when he said, “Over 50% of our customers haven’t tuned into some of these programs.”
Indeed, the Knicks may be 36-18 and can boast themselves, finally, as serious NBA Finals contenders, but that doesn’t mean the majority of Optimum cable subscribers follow the team.
With MSG Networks adding around $10 to the average cable bill, and the aforementioned local teams’ games available in the Gotham Sports direct-to-consumer streaming app, Optimum subscribers may not see the RSN return to their program guide.
Altice USA has 1.88 million remaining pay TV customers as of the end of 2024, down by 291,800 from the end of 2023. Like some similarly situated cable companies, Altice USA sees providing customers with video as a way to support its core broadband connectivity products and make them stickier. It’s a “churn reducer,” Mathew explained.
A number of smaller cable providers have given up supporting their own video service offering and have instead begun repackaging virtual pay TV products including YouTube TV. Englewood, Co.-based WideOpenWest (aka WOW!) Is a good model to observe here. But for now, Altice USA continues to hold the line on linear video.
Overall for Q4, the cable operator reported a 2.9% YoY decline in total revenue to $2.2 billion. (You can read Altice USA’s full Q4 earning release here.) And despite declines year-over-year, video still contributed $686 million in revenue in Q4. The company missed on key forecasts from equity analysts, and it lost 37,700 residential broadband subscribers, up from 27,000 in the fourth quarter of 2023.
The company reported strong mobile and fiber metrics, and Altice USA stock was trading up around 5% as of the midday-Thursday.