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Charter Communications CEO Chris Winfrey said the company’s ongoing integration of streaming services for Spectrum TV and internet customers will have “a pretty significant impact on acquisition and retention.”
Speaking to Wall Street analysts on the company’s third quarter earnings call, Winfrey said he expects deals with Disney, Warner Bros. Discovery, NBCUniversal and other programmers over the past year or so to start bearing fruit in 2025. The acquisition and retention benefits will be evident “certainly for video, but also with internet when bundled together,” he said.
Charter shares jumped 15% after the opening bell Friday after the company reported better-than-expected quarterly results. The broadband and wireless provider, which is also the No. 1 pay-TV operator in the U.S., posted a nearly 2% uptick in revenue for the July-to-September quarter, to $13.8 billion, while earnings per share came in at $8.82. The revenue and profit figures both topped analysts’ consensus forecasts.
Winfrey stepped out of the shadow of longtime former Charter CEO Tom Rutledge in 2023, becoming a closely watched industry figure as a result of declaring war on Disney in the companies’ carriage negotiation. The accompanying 10-day blackout of ABC, ESPN and other channels ended with a landmark deal that dropped linear carriage for networks like Freeform and Nat Geo Wild while guaranteeing integrations and marketing support for Disney+, Hulu and ESPN+. The standoff captured wide attention, playing out during a key interval on the sports calendar and depriving millions of customers of college football and U.S. Open tennis.
While Winfrey sees upside in the Disney deal and the others that followed its template, he issued a caveat on the call. “On the one hand, we’re excited about the space because it adds value,” he said of the streaming integrations, which the company says deliver up to $78 in monthly savings to higher-end customers. “On the other hand, I want to be careful. We’re not forecasting video growth. We’re simply saying that it’s a way to add utility into our seamless connectivity relationships in a way that hasn’t existed. From our past experience, we know the value that can come about in the overall bundle by doing that right.”
Charter shed 294,000 video customers in the quarter to settle at 12.4 million. Broadband also declined by 110,000 to 30.3 million, though the subscriber losses beat analysts’ estimates.
Mobile, an increasingly important segment for providers like Charter, Comcast and others, tacked on another 545,000 subscribers in the quarter. As of Sept. 30, Charter served 9.4 million mobile lines.
A lot of blocking and tackling is involved in fully implementing the streaming integrations and also marketing them to customers, Winfrey explained.
“It’s easy to get impatient with how quickly we can get that fully rolled out in a way that’s easy for customers to understand, appreciate, sign up to and utilize,” he said. “In its current state it’s a high-value proposition but it’s not always easy to find and it’s not always easy to subscribe and to manage your existing subscriptions.” There has been “good take-up” thus far, he added, but the setup is “not exactly the most customer friendly proposition just yet.”
After Charter’s earnings release indicated a lower-than-expected capital expenditure outlook overall, Winfrey clarified that the streaming integrations would not result in major spending for the company. “There was some misconception in the marketplace that thought that we were going to do some big, huge marketing campaign and that would have a financial impact next year,” he said. “That’s really not the case.”
