Charter Communications, which offers services under the Spectrum name, lost 281,000 residential video subscribers in the United States in the last quarter. That was an improvement on the first two quarters of the year, but it has lost over 2.2 million over the last two years and now has a total of just over 12.44 million. It is now planning to bundle a range of online video apps with its packages.
Charter provides internet, television, mobile, and voice communications services available to more than 58 million homes and businesses in 41 states through its Spectrum brand.
It has 29.46 million residential customer relationships, including 12.44 million residential video customers, putting it just behind Comcast. It is really just a question of who is losing more subscribers.
Charter also lost residential internet customers, down by 113,000 in a quarter and down by over a quarter of a million in the first nine months of the year.
In September, Spectrum launched a new brand platform called Life Unlimited and a simplified pricing strategy for its connectivity and entertainment products.
Spectrum TV Select video customers will soon receive online video applications worth up to $80 a month for no extra cost. They currently include the advertising supported versions of Disney+, ESPN+, and Paramount+. These will be joined by the advertising supported versions of Max, Discovery+, AMC+, BET+ and Tennis Channel+, and the full version of Peacock.
Apparently, there is still some work to do to integrate user authentication for all these apps.
Charter says this is part of a video evolution strategy to provide flexible packages with enhanced value, whether through full packages with seamless entertainment, smaller video packages, or a suite of a-la-carte programmer application options for broadband-only customers.
Chris Winfrey, the chief executive of Charter, told analysts that the company had transformed all its major programming agreements over the past year.
“These agreements give customers greater overall package flexibility and the ability to include all the key streaming apps from programmers within our Spectrum TV Select packages. That enables us to offer what we now call seamless entertainment, the first for the industry at no extra cost.”
“Over the last couple of years, we’ve moved away from bundling video in our offers because the value proposition to customers had fallen,” he said. “Fundamentally, we believe that maintaining and evolving the video business, even if it isn’t growing, helps customer acquisition and retention by making use of our scale and capabilities and adding more value into our unique seamless connectivity relationship. Video still has positive cash flow and provides us with option value.”
He cautioned that he was not forecasting video growth but sees it as a way to add utility to its connectivity customers in a way that was not previously possible.
Quarterly revenue increased by 1.6% year-over-year to $13.8 billion, driven by growth in residential mobile service, residential Internet, advertising and other revenues, partly offset by lower residential video revenue.