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What Affected Charter’s Video Customer Acquisitions in 3Q17?

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Charter’s video subscribers in 3Q17

Now we’ll take a look at Charter’s (CHTR) performance in terms of video subscriber net additions in 3Q17. With nearly 16.7 million video subscribers after the merger, Charter Communications has become the third-largest pay-TV player in the US after Comcast (CMCSA) and AT&T (T). Wall Street analysts expect Charter to see a net loss of video subscribers in 3Q17, as the telecom company continued to face intense competition from the over-the-top (or OTT) video streaming players.

Earlier in 2Q17, on a net basis, Charter lost 90,000 video subscribers as compared to 152,000 net losses in 2Q16. The company saw the most losses in Time Warner Cable markets.

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Pay-TV providers are losing subscribers

OTT video streaming services deliver content directly to customers over the Internet as a substitute for cable and satellite connections. Thus, OTT offerings slow pay-TV subscriber momentum due to cheaper online substitutes. This phenomenon is known as “cutting the cord.”

More and more customers are opting for OTT over high monthly satellite and cable bills. As per Digitalsmiths 2Q17 report, around 36.2% of pay-TV subscribers pay above $100 per month to their service provider. Netflix (NFLX), Sony’s (SNE) PlayStation Vue, and DISH’s (DISH) Sling TV are the leading firms in the online video streaming space.

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