After two consecutive quarters of surprising growth last year, Charter lost 138,000 video subscribers in the first quarter of 2021.
The company dropped 156,000 residential video subscribers – more than the 155,000 combined it added during the second and third quarters of 2020. However, the company added 18,000 business services video subscribers to help offset the losses.
Charter ended the quarter with approximately 16.06 million video subscribers – 15.48 million residential and 579,000 business.
After growing its overall residential video customer base by 19,000 in 2020, the company could be in for a tougher 2021 along with most other traditional pay TV operators. According to recent projections from S&P Global, the overall rate of subscriber decline for U.S. pay TV operators will hit 4.5% in 2021 and 6% in 2022. The company is predicting growth among virtual MVPDs will slow as the total legacy pay TV market (including cable, satellite and telco) swells to a 10.3% annual rate of subscriber declines in 2022.
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As Charter’s video subscriber base begins declining again, the company is embracing non-traditional distribution strategies for subscribers. CEO Tom Rutledge said that his company now has more than 10 million customers that receive its video services through applications on third-party devices as opposed to traditional cable set-top boxes.
Charter’s video revenue dipped slightly to about $4.3 billion, which the company attributed to a higher mix of lower priced video packages within its video customer base, lower bundled revenue allocation, lower pay-per-view and video on demand revenue and lower installation revenue.
However, growth in broadband and mobile more than helped to offset it and bring the company’s consolidated revenue up 6.7% to $12.5 billion.
“We continue to execute well in a market environment that has not yet returned to normal. We added 355,000 Internet customers in the first quarter, and 2 million over the last year, for year-over-year growth of 7.3%,” said Rutledge in a statement. "Our value-driven operating strategy of providing multiple high-quality products at lower prices than sold individually continues to drive our growth.”