Charter Communications added over 100,000 Spectrum video subscribers in the second quarter of 2020. That bucked the secular trend in declining video subscriber numbers in the United States. It was down to gains in internet customers and support schemes put in place as a result of the coronavirus pandemic. Charter still has 15.65 million video subscribers and sees video as central to its long-term connectivity strategy.
While Comcast and AT&T lost 1.3 million video customers between them, Charter added 102,000 residential video customers in the second quarter. That is a significant improvement on a loss of 70,000 in the first quarter, or a loss of 150,000 in the second quarter the previous year.
It is only the second quarterly gain for Charter Spectrum since the start of 2014. Since then, the company has lost nearly two million video subscribers. It had a total of 15.65 million at the end of June 2020.
Charter gained 842,000 internet customers in the quarter. In response to coronavirus restrictions, the company offered free Spectrum Internet for 60 days to new customers with school or college children and those involved in education. 58,000 of those new customers also chose to subscribe to video services, for which they were billed.
“It brought in real new customers that subscribe and look like existing customers,” Tom Rutledge, the chief executive told analysts. “The secular trends for video haven’t changed,” he said. “It is continuing to decline, but if you grow faster than that rate of decline, then you create video growth.”
“Nothing has changed the secular trend, although there probably was a little less downgrading during the period because so many people were stuck in front of screens at home,” he considered. “What really just happened is we accelerated our growth rate overall in customer relationships. We grew faster than the rate of video decline, and it’s that simple.”
There were 12,000 net video additions as a result of the remote education offer, and a further 147,000 as part of the Federal Communications Commission ‘Keep America Connected Pledge’.
Video revenue was $4.37 billion, down by 0.4% compared to the previous year, whereas internet revenue was up by 10.4% to $4.53 billion.
Video subscribers now represent just under 55% of customer relationships, compared to 59% a year previously.
Charter acknowledges that the video market is in transition but says that this is “manageable even as video units decline” and a “competitive bundled video offering remains central to long-term connectivity strategy”.