Time Warner Cable lost 217,000 residential video customers in the last quarter of 2013, which can only be partly attributable to the temporary blackout of the Showtime network resulting from a dispute with CBS. It was the eighth consecutive quarter of video customer losses. The fourth largest pay-television service provider in the United States ended the year with 11.12 million video subscribers, a loss of 833,000 over the year, or nearly 7% of its subscriber base. It could be open to a merger with the smaller cable company Charter Communications, if a deal can be done.

The number of Time Warner Cable video customer losses reduced from around 110,000 in October, to around 60,000 in November, to just over 40,000 in December. The total number of ‘primary service units’, which represents the total of video, voice and data subscriptions, turned positive in December, driven largely by broadband.

Video revenue for the year was $10.5 billion, down $436 million on the previous year. Total annual revenue was up $734 million, to $22.1 billion.

Time Warner Cable is clearly keen to present a positive picture. The company said its video customers had access to 183 high-definition channels on average. Its cloud-based guide and video portal is installed on 2.8 million set-top boxes, aiming for 6 million by the end of 2014.

The company plans to rebrand its services as TWC Maxx, city by city, starting in New York City and Los Angeles in 2014 and rolling out across three quarters of its network in 2015 and 2016. That will mean providing new high-definition boxes and offering only digital video services. Time Warner Cable is aiming to add a million residential customers in the next three years.

The TWC YV app is available on Apple and Android tablets and smartphones, including the Amazon Kindle Fire, and Roku boxes, Samsung smart televisions, the Xbox 360 games console and Windows and Mac computers. It features up to 300 scheduled channels and over 4,000 hours of on-demand programming, available in the home, and up to 24 channels and 1,200 hours of programming from 40 networks outside the home. In December it was used on more than a million devices.

Time Warner Cable is continuing to reject a proposed acquisition by the much smaller company Charter Communications, describing the latest offer of $131.50 a share, worth $61 billion, as “grossly inadequate”.

Rob Marcus, the chief executive of Time Warner Cable has suggested that the board would be open to a deal for $160 a share, made up of $100 in cash and $60 in Charter shares.

A possible scenario is that if Charter is successful in its bid it could sell on some of the franchise areas to Comcast, the largest cable company in the country.

Tom Rutledge, the chief executive of Charter, joined the company in 2012 after leaving Cablevision. He was previously an executive at Time Warner Cable.

Charter is the fourth-largest cable company in the United States, with 4.2 million video subscribers. Charter Communications emerged from bankruptcy protection to restructure and cancel $8 billion in debt in 2009. It largest shareholder is Liberty Media, controlled by John Malone, who has advocated further consolidation of the cable industry.

Cable operators are facing increasing competition, not only from satellite and telco service providers, but also from new entrants like Netflix and global technology companies like Google. With subscriber numbers falling in a saturated market, consolidation offers a strategy to achieve corporate growth and provide economies of scale to boost profits and compete in an increasingly dynamic market. A possible merger of Time Warner Cable and Charter would rank third in the country by subscriber numbers.