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Charter lost 63,000 residential pay TV subscribers in the second quarter, compared with a gain of 102,000 in the year-ago period. Including the addition of 13,000 small- and medium-size business clients, it lost 50,000 video customers after a year-ago gain of 94,000.
The cable giant’s broadband Internet business was once again a key growth area, recording 365,000 residential Internet subscriber net additions, even though that was down from 842,000 in the second quarter of 2020, which had been boosted by the coronavirus pandemic. Including small- and medium-size business clients, the total gain of 400,000 also slowed compared with the 850,000 recorded in the year-ago period.
As of the end of June, Charter had more than 16 million total video subscribers and more than 29.6 million broadband customers.
Second-quarter revenue of $12.8 billion grew by 9.5 percent, with advertising sales revenue soaring 65.1 percent. Earnings rose from $766 million to $1.0 billion. The results exceeded Wall Street expectations.
Charter chairman and CEO Tom Rutledge said about the firm’s performance: “Our operating strategy continues to deliver strong customer and financial growth despite an operating environment that has yet to return to normal. And the opportunity at Charter is what it has always been – to continue to create customer relationships with our high-quality connectivity services, delivering value for consumers and our shareholders over time.”
MoffettNathanson analyst Craig Moffett said that a day after Comcast’s “absolutely stellar” earnings update, “Charter’s results were every bit as good as Comcast’s. Strong broadband growth, good margins… yada, yada, yada.”
On Friday’s earnings conference call, Rutledge touted a “modern” recent carriage deal with ViacomCBS that gives the cable giant the right to carry the entertainment firm’s streaming services, such as Paramount+, arguing that it “recognized that the video business is changing.” Reiterating that Charter wants to enable streaming services, Rutledge said that ViacomCBS’ direct-to-consumer services “were integral to the discussion, consistent with our view that we would like to be part of the marketplace and enhance our video customer relationship with customers through managing transactions for them.”
Asked if Charter could generate advertising revenue from streaming deals with content companies, the CEO said there was “an opportunity, depending on the model, either for an advertising sale in the app at multiple levels and a transaction opportunity in creating the subscription.”
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