Charter Communications saw its Spectrum TV customer base dip by 392,000 accounts during the first three months of the year, the company revealed in its quarterly earnings report early Friday morning.
The figure showed an acceleration of so-called “cord-cutting” at Spectrum TV compared to the first quarter (Q1) of 2023, when Charter reported a loss of 237,000 core video subscribers.
Charter ended Q1 with around 13.1 million pay TV customers, including those who are on the company’s relatively-new Spectrum TV Select plans.
A troubling trend of broadband erosion also continued at Charter, with 72,000 Spectrum Internet customers leaving for other services, including fixed-wireless products like T-Mobile Home Internet and Verizon Home Internet. Charter is not alone: Earlier in the week, peer telecom Comcast also reported a drop in land-based broadband customers as competition among fixed-wireless broadband providers heats up.
All told, Charter earned $13.67 billion during the first three months of the year, slightly more than the $13.65 billion the company brought in during Q1 2023.
On a conference call with investors following the release of the earnings report, Charter CEO Chris Winfrey affirmed the company was experiencing “short term market challenges” brought on by fixed wireless and streaming video competitors, but said Charter has reworked some of its own programming packages to woo back subscribers who wanted flexible pay TV offerings.
“While the video business is clearly under pressure, we believe that flexible and attractively priced packaging options across all forms of video, channels really, integrated within a modern user-interface and in a more frictionless environment can re-create value in the ecosystem for our customers, programmers and distributors,” Winfrey said.
Charter has also made progress on bundling more of its traditional TV packages with streaming products: Over the past eight months, the company has renegotiated deals with the Walt Disney Company, Allen Media Group and Televisa-Univision that includes access to their premium streaming products as part of a subscriber’s traditional video package.
For instance, some Spectrum TV customers who have Disney-owned channels in their packages are able to access the ad-supported versions of Hulu, Disney Plus and ESPN Plus, while subscribers with the Weather Channel can now stream a live feed of the network through the Weather Channel app when they authenticate with their Spectrum cable credentials.
Charter intends to lean more on these types of bundles, Winfrey said, and will also leverage its streaming joint venture with Comcast, called Xumo, to bring more opportunities to customers who want Charter’s broadband Internet service and the ability to watch streaming video from a single experience.
“As we approach the marketplace in a different way, it creates consternation because it’s something very different,” Winfrey said. “But our goal is really to create a video ecosystem that works for customers in providing utility and value — utility through Xumo and value through our ability to package in different ways that meet the customer’s needs at a fair price.”
