Charter: Video Subs Decline Again


Basic-subscriber losses ticked up slightly
in the second quarter at Charter Communications, but the
St. Louis-based MSO stepped up its efforts to attract nonvideo
subscribers, including plans to expand a marketing
partnership with rival Dish Network to sell broadband and
voice services to satellite-TV

For the second quarter, total
residential video customers
declined by 79,900 in the
period to 4.17 million. Highspeed-
data customer growth
slowed to 18,500 in the period
from 22,000 last year and
telephony additions dipped
to 6,600 in the period from
35,500 a year ago.

Charter said the decline
in video customers — up
slightly from the same period
last year, when the MSO lost
71,700 basic video subscribers — was a combination of normal
seasonality as customers moved to summer residences
and disconnections by video-only subscribers.


Revenue during the period was up 2.2%, to $1.8 billion,
and cash flow increased 4.8%, to $673 million.

While basic subscriber losses mounted, the MSO
nearly doubled gains in non-video customers, adding
40,800 in the period compared to 20,500 in the first

The second-quarter gain represented a 26% increase
over the same period last year in a category Charter has
long focused on.

Non-video subscribers
represented about 13.9% of
Charter’s total residential
subscriber base in the period,
up from 10.8% in the prior

Charter partnered with
Dish earlier this year, offering
its high-speed data and
phone service to select Dish

Charter CEO Mike Lovett
told analysts on an earnings
call that the agreement is
basically a marketing pact.
Charter can insert information
regarding the two services in select Dish customer

Lovett did not reveal further details, but said both parties
are pleased with the pilot program and are expanding
the relationship.

Dish spokesman Marc Lumpkin said the Charter arrangement
is similar to other co-marketing deals the satellite
giant has with other cable and phone companies,
where it offers bundled discounts to customers based on
the broadband providers available in the area.

“It gives us an opportunity to be competitive in areas
where we don’t offer it,” Lumpkin said. “It’s an opportunity
for cable and phone companies to reach customers they
may not have otherwise reached. And it’s a way for Dish
Network to provide a bundled service for a triple play.”

Charter described the arrangement with Dish as unique
and said it prohibits the operator from targeting Dish subscribers
in the pilot area for video service.


Charter also is increasing efforts to target higher-credit
risk customers, launching “Charter Starter” in several
markets this year.

Lovett did not want to give too many details of the package,
for competitive reasons, but said Charter Starter limits
a customer’s access to higher-cost elements.

After a certain number of months of on-time payment,
those elements — including digital tiers, faster data speeds
and enhanced features — are made available.

The new offers come on the heels of a targeted rate increase
that is still rolling out across Charter’s footprint,
including a doubling of its sports tier pricing, to $10 per
month from $5, increasing its modem rental pricing to $7
per month from $5 for customers not under a price guarantee
or not taking home networking and moving monthly
charges for analog video closer to pricing for digital packages.

Charter chief financial officer Christopher Winfrey said that
it is too early to tell what impact the increases will have.

“All of those price increases roll out sequentially through
the quarter and Q3, so you certainly won’t see the full impact
of either the revenue increase or the churn related to that until
the end of Q3 on a run rate basis,” Winfrey said.