uploads///Telecom Charter Q Pay TV Subscribers Loss

Why Charter Communications Is Losing Its Video Customers

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Aug. 2 2018, Updated 5:45 p.m. ET

Charter’s video customers

Let’s take a look at Charter Communications’ (CHTR) performance in terms of video customer net additions over the last few quarters. In 2016, Charter completed its merger with Time Warner Cable and Bright House Networks. With this merger, the new Charter Communications has become the third-largest pay-TV service provider in the United States after AT&T (T) and Comcast (CMCSA). Its residential video customers decreased ~0.4% sequentially to ~16.2 million at the end of the second quarter.

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On a net basis, Charter lost 73,000 residential video subscribers in the second quarter. That compares to 91,000 net losses in the second quarter of 2017. Wall Street analysts expected a loss of 108,000 residential video subscribers in the second quarter, mainly due to intense competition from OTT (over-the-top) video streaming operators. Comcast reported a loss of 136,000 residential video subscribers in the quarter.

OTT market

OTT video streaming services directly provide content to consumers over the Internet. Users tend to prefer more flexible, modestly priced online video services over higher-priced traditional cable or satellite connections.

Currently, AT&T’s DirecTV Now, Netflix (NFLX), and Amazon’s (AMZN) Prime Video are formidable players in the video streaming market. In the second quarter, Netflix gained 5.15 million customers worldwide and exited the quarter with 130.1 million customers. AT&T added 342,000 DirecTV Now subscribers in the second quarter and exited the quarter with 1.8 million customers. Amazon recently stated that it has more than 100 million Prime members, which includes access to its streaming service.

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