Charter Communications to add video customers after losses
Let’s take a look at Charter Communications’ (CHTR) performance in terms of its video customer net additions trend over the last few quarters. With ~16.5 million video customers after the merger, the new Charter Communications has become the third-largest pay-TV service provider in the US after Comcast (CMCSA) and AT&T (T).
The telecom company had been incurring video subscriber losses for several quarters, mainly due to cord-cutting and competition from low-cost OTT (over-the-top) video streaming players in the industry, particularly Netflix (NFLX) and Amazon’s (AMZN) Prime Video.
Apart from OTT players, Charter Communications also faces a threat from satellite broadcasters like DIRECTV and Dish TV. DIRECTV was acquired by AT&T in July 2015, making it the biggest pay-TV provider in the US.
Charter Communications’ video subscribers
On a net basis, Charter Communications (CHTR) added 2,000 residential video subscribers in 4Q17, compared to 51,000 net losses in 4Q16. In 4Q17, Charter Communications rebounded from the trend of residential video subscriber losses.
The video subscriber addition seems to be the result of the company’s all-digital efforts in the recently merged legacy Time Warner Cable and Bright House markets in May 2016. Comcast, a leading US cable company, reported a loss of 33,000 video subscribers in 4Q17.
In 4Q17, Netflix gained 8.3 million subscribers, while Amazon stuck to its tradition of not disclosing its Prime membership numbers in its 4Q17 earnings results. CIRP[1. Consumer Intelligence Research Partners] estimates that Amazon finished 3Q17 with 90.0 million Prime members in the US, which means that the company added 5.0 million Prime customers in 3Q17. AT&T gained 368,000 DIRECTV NOW customers in 4Q17.