Charter Communications will once again experience steep recession of its pay-TV base in the third quarter, UBS analyst John Hodulik predicts, thanks to “roll-offs” of legacy Time Warner Cable customers reaching the end of their promotional pricing periods.
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Charter is pitching legacy TWC customers with what it believes is a straightforward, simplified pricing model, not complicated by promotional periods and equipment fees.
“Our internet packages are competitively priced, but we offer faster starting speeds and don't charge an additional modem lease fee on top of the cost of service (that is an addition $10 at legacy TWC),” Charter spokesman Justin Venech told FierceCable. “That pricing is better and more attractive to customers. Our video packages are simpler and more robust. For example, our Spectrum silver package includes over 175 channels plus premium channels HBO, Showtime and Cinemax while a comparable TWC package would have charged extra for premiums. We don't add on additional fees and taxes to our voice product that our competitors do, and our equipment pricing for video set-top boxes are much lower with Spectrum than our competitors or legacy TWC or BHN. Our new Spectrum pricing is $4.99 for a receiver vs over $11 at legacy TWC.”
However, at least in the initial markets in which Charter is rebranding TWC services with Spectrum — Los Angeles, notably — the transition from TWC’s promotional pricing to Charter’s standard pricing is being perceived as a price bump.
Charter lost 152,000 video customers in the second quarter, thanks largely due to the seasonality of another recent acquisition, the Florida-situated Bright House Networks.
UBS, meanwhile, is more bullish on Comcast, which it predicts will report gains of 10,000 video subscribers when it reports earnings next week. The firm believes AT&T U-verse (predicted losses of 356,000) will continue to offset the gains of sibling satellite service DirecTV (predicted third-quarter gain of 345,000).