- Charter continued to hemorrhage video subs in Q3
- But it seems to think its video business could be headed for better days and has added the service back into its bundle
- The operator is hoping its packaging strategy will also boost its lackluster broadband figures
Video is being let back into the bundle at Charter Communications.
The cable giant on Friday said that it lost 294,000 linear video customers in the third quarter of 2024, a slight improvement over the 327,000 video souls lost during the July-September period of 2023. Charter, now the largest U.S. pay TV operator, has 13.015 million remaining linear video customers, down 9.5% in the last year. (You can read the company’s full Q4 release here.)
But with video being a key part of Charter’s new “Life Unlimited” bundle-heavy marketing strategy, announced in September, the company believes its long-moribund Spectrum TV offering could be headed for better days.
Charter over the past 14 months has aggressively negotiated deals with programmers that allow it to package their subscription streaming platforms at no additional cost. And all that work is about to pay off.
On Friday, the cable operator’s CEO Christopher Winfrey told equity analysts that starting in early 2025, after Charter has time to handle all the tech and marketing integration, subscribers to its most popular video tier, Spectrum Select, will be able to enjoy $80 a month worth of SVOD services at no additional cost.
These customers will have access to the partially ad-supported versions of Disney+, ESPN+, Peacock, Max, Discovery+, Paramount+, AMC+ and Vix. Winfrey added that a pathway for customers to upgrade to premium ad-free versions of these services will become available next year.
Charter, which struck a groundbreaking deal with Disney in September 2023 that allowed it to bundle Disney+ and other Disney streaming services at no additional customer cost, announced similar arrangements in carriage deals with Warner Bros. Discovery and NBCUniversal, which were struck in the third quarter.
Meanwhile, among its other new packages, Charter is bundling its 500 megabits-per-second internet plan at $30 per month when customers also take two lines of Spectrum Mobile service and/or Spectrum Video. It’s the first time video has appeared in the company’s premiere bundled offerings in several years.
Charter is hoping the customer excitement around the new multi-SVOD video package will juice its sagging high-speed internet products.
Charter announced the loss of 110,000 broadband customers in Q3 across residential and business channels. Much of that attrition can be attributed to the loss of funding to the Affordable Connectivity Program, Charter said. In fact, without the ACA impact, the cable operator said it would have added broadband customers in Q3.
But Charter’s broadband customer base, along with the internet subscriber bases for virtually all of its U.S. cable brethren, hasn’t really grown since T-Mobile and Verizon started selling cheap fixed wireless access (FWA) home broadband like hotcakes. (Notably, as he’s taken to do at recent public events, Winfrey pejoratively referred to FWA as “cell-phone internet” throughout Friday’s earnings call.)
Winfrey believes the aforementioned positive impacts will be experienced once all the acquired SVOD services are integrated and placed into Charter’s service portfolio. Customers will have access to the lineup via the cable company’s Xumo device ecosystem joint venture with Comcast.
“We expect that it will have a pretty significant impact on acquisition and retention, certainly for video, but also on broadband,” Winfrey said.
Overall, Charter grew total revenue by 1.6% in Q3 to $13.8 billion, beating estimates. Its stock was up more than 13% Friday morning.