Cable Fights Back with Streaming: Charter's Counterattack Strategy

Charter Returns to Pay-TV Net Adds for First Time Since 2020 with $117/Month Streaming Bundle

• Ends 18-quarter decline with 49,000 net adds in Q4 — "Video is now a killer app"

• 10 SVOD services bundled at $117 retail value drives churn reduction

• $34.5B Cox acquisition to create largest U.S. cable operator with 70M+ homes

Charter Communications (NASDAQ: CHTR), the second-largest cable operator in the United States, has achieved a historic milestone with net pay-TV subscriber additions in Q4 2025. This marks the first quarterly net gain since the COVID-19 pandemic-driven surge in 2020, demonstrating that traditional pay-TV can survive—and even thrive—amid the relentless assault from streaming platforms like Netflix and Disney+. The achievement has captured the attention of the global media industry as a potential blueprint for legacy operators navigating the streaming era.

Charter announced on Thursday from its Stamford, Connecticut headquarters that residential video subscribers increased by 49,000 in Q4 2025—a dramatic reversal from the 123,000 net loss in the same quarter of 2024. Including small and medium business (SMB) customers, total video subscribers grew by 44,000.

The last time Charter reported quarterly pay-TV net additions was in Q2 2020 (+102,000) and Q3 2020 (+53,000), when pandemic lockdowns drove unprecedented demand for home entertainment. After 18 consecutive quarters of subscriber losses, Charter has finally returned to positive territory.

◆ KEY HIGHLIGHTS

• Q4 Residential Video: +49,000 net adds (vs. -123,000 in Q4 2024)

• Full-Year Video Net Loss: -255,000 (79% improvement vs. -1.2M in 2024)

• $117/month retail value SVOD bundle driving churn reduction

• Mobile Lines: 11.77M total (+19.4% YoY)

• $34.5B Cox acquisition expected to close mid-2026

Annual Losses Shrink 79% — Cord-Cutting Slowdown

The improvement extends to full-year results as well. Charter's 2025 video subscriber net loss totaled 255,000—a dramatic improvement compared to 1.2 million in 2024 and approximately 1 million in 2023. The hemorrhaging of over one million subscribers annually has been reduced to roughly one-quarter of that level, effectively putting the brakes on the cord-cutting trend.

As of year-end 2025, Charter's total video subscribers stood at 12.605 million, with 12.072 million residential and 533,000 SMB customers. While this represents a 2.2% decline from 12.892 million at year-end 2024, the significantly slower rate of decline signals a meaningful inflection point.

Wall Street responded positively to the earnings release. Charter shares rose $15.49 (8%) to $207.01 in pre-market trading. Investors viewed the narrowing internet subscriber losses, continued mobile growth, and the video turnaround as bullish signals for the company's transformation strategy.

"Seamless Entertainment" — The $117/Month Bundle Magic

At the heart of this turnaround is Charter's new pricing and packaging strategy launched in September 2024. The company made a bold move by including ad-supported versions of major streaming services in its Spectrum TV Select package at no additional cost—a value proposition unprecedented in the industry.

The bundle, branded as "Seamless Entertainment," delivers streaming services with a combined retail value of approximately $117 per month, rising to about $129 per month as additional services are added. This represents a compelling value proposition that has proven difficult for consumers to replicate on their own.

▶ Spectrum TV Select Bundle — Included Streaming Services (Ad-Supported)

【Currently Available】 Disney+, Hulu, ESPN Unlimited, HBO Max, Paramount+, Peacock, AMC+, ViX, Tennis Channel, Fox One

【Coming Soon】 Discovery+, BET+

In October 2025, Charter launched the Spectrum App Store, a digital marketplace where Spectrum TV customers can easily activate and manage the streaming apps included in their packages. Broadband-only customers can also purchase streaming apps à la carte, addressing diverse customer needs across the spectrum.

"Our North Star is not to have net gains in video for net gain's sake. Our goal is to have a video product that supports broadband acquisition and broadband retention. When our video customers activate their included apps, video and broadband churn improvement is meaningful. Video can now become another one of our differentiated sales tools."

— Chris Winfrey, CEO, Charter Communications (Q4 2025 Earnings Call)

CEO Chris Winfrey described Charter's video product and platform as a "killer app" during the earnings call. However, he emphasized that video growth is not the ultimate goal—rather, video serves as a retention tool for core connectivity services like broadband and mobile. This represents a fundamental redefinition of traditional cable TV from a standalone profit center to a customer lock-in mechanism.

CFO Jessica Fischer reinforced this narrative: "While new connects and full package upgrades increased year-over-year, the primary driver of subscriber improvement was churn reduction." The new pricing and packaging strategy is proving more effective at retaining existing customers than acquiring new ones.

Q4 Revenue Down 2.3% — Video and Political Ad Weakness

Charter's Q4 total revenue declined 2.3% year-over-year to $13.601 billion, down from $13.926 billion. The decline was driven primarily by lower residential video revenue and reduced political advertising following the 2024 U.S. presidential election cycle.

Net income attributable to shareholders fell 9.1% to $1.332 billion from $1.466 billion. Adjusted EBITDA declined 1.2% to $5.691 billion. However, EBITDA margin improved slightly to 41.8% from 41.4%, reflecting successful cost efficiency initiatives.

■ Q4 Financial Highlights

* Source: Charter Communications Q4 2025 Earnings Release

By segment, connectivity revenue led growth. Combined internet and mobile service revenue reached $6.87 billion, up 2.3%. Mobile service revenue grew 13.1% to $973 million, maintaining double-digit growth momentum.

Advertising revenue plummeted 25.8% to $401 million due to the absence of political advertising compared to the 2024 election quarter. Excluding political, advertising revenue actually increased 0.6% year-over-year, with advanced advertising growth partially offsetting traditional advertising market weakness.

Mobile Surpasses 11.77M Lines — 19% YoY Growth

The mobile segment continues to serve as Charter's growth engine. Q4 mobile lines increased by 428,000, bringing total mobile lines to 11.766 million at year-end 2025—a 19.4% increase from 9.858 million at year-end 2024. Residential mobile accounts for 11.37 million lines, with SMB contributing 396,000.

Spectrum Mobile is central to Charter's converged network strategy. Available to existing Spectrum Internet customers, the service offers 5G access, no contracts, and all-in pricing (taxes and fees included). Charter claims to deliver "the fastest overall speeds in America."

■ Q4 Subscriber Metrics

* Source: Charter Communications Q4 2025 Earnings Release

Internet subscribers declined by 119,000 in Q4, but this represents a significant improvement from the 177,000 loss in Q4 2024. The impact of the FCC's Affordable Connectivity Program (ACP) termination in Q2 2024 continues to diminish. Total internet subscribers stood at 29.68 million at year-end 2025.

Skinny Bundle Popularity Drives 7.7% ARPU Decline — Profitability Dilemma

Behind the subscriber gains lies a profitability challenge. While lower-priced "skinny bundles" drove the net additions, video ARPU (Average Revenue Per User) declined 7.7% year-over-year. Charter effectively traded margin for customer retention.

Q4 video revenue fell 10.3% to $3.246 billion, partly due to $165 million in programmer streaming app cost allocations charged against video revenue—up from just $37 million in Q4 2024.

CFO Fischer projected that "as more customers authenticate their streaming apps, full-year 2026 cost allocations could reach up to $1 billion." However, she emphasized that "these cost allocations are offset equally in programming costs, resulting in neutral EBITDA impact"—meaning no real profitability deterioration.

Indeed, Q4 programming costs declined $192 million (8.4%) to $2.083 billion, driven by lower-cost package mix, reduced video subscribers, and streaming app cost allocation effects. However, contractual programming rate increases and renewals partially offset these savings.

YouTube TV-Disney Dispute Also Contributed

External factors also played a role in Q4 subscriber gains. The fall 2024 carriage dispute between YouTube TV and Disney—which temporarily removed Disney channels (ESPN, ABC, etc.) from YouTube TV during early NFL season—drove some sports fans to Spectrum. Charter acknowledged this as a "small video subscriber benefit."

However, CEO Winfrey acknowledged the structural challenges facing the video market. "The ecosystem is still really challenged," he said on the call. "Programming costs, especially retransmission fees, are a real issue."

"In this environment, getting back to positive net additions is a game of inches. The ecosystem is still really challenged and programming costs, especially retransmission fees, are a real issue. But even so, we'll continue to innovate."

— Chris Winfrey, CEO

$34.5B Cox Acquisition to Create Largest U.S. Cable Operator

Charter is currently pursuing its $34.5 billion acquisition of Cox Communications. Announced in May 2025, the deal—once approved—will expand Spectrum's service footprint from 58.4 million to over 70 million homes, making Charter the largest cable operator in the United States.

"Given Cox's low video penetration and Charter's capabilities, we expect to grow video in the Cox footprint for a period of time as well," Winfrey said. Applying Charter's SVOD bundling strategy to Cox territories could drive additional subscriber gains. The transaction is expected to close in mid-2026, pending regulatory approval.

Charter is also pursuing a combination with Liberty Broadband, its largest shareholder. The merger aims to simplify corporate structure and enhance shareholder value. Charter filed a definitive joint proxy statement/prospectus with the SEC in January 2026.

Network Evolution Complete by 2027 — "America's Connectivity Company"

Charter positions itself as "America's Connectivity Company" and is executing massive network investments. The Network Evolution Initiative—delivering symmetric and multi-gigabit internet speeds across its entire footprint—is the centerpiece of this strategy.

Charter has already launched symmetric internet service in several markets and plans full footprint deployment by 2027. "Unlike competitors, Spectrum upgrades its network to every passing and does so at a much lower cost," Winfrey emphasized as a key differentiator.

In early 2026, Charter will launch "Invincible WiFi"—a tri-band advanced WiFi 7 router with integrated 5G cellular and battery backup, providing uninterrupted connectivity during outages or power failures. This product embodies Charter's vision of "Guaranteed connectivity, guaranteed service, guaranteed savings."

Charter is also partnering with federal, state, and local governments to expand rural broadband. Q4 alone saw 147,000 subsidized rural passings activated, with 483,000 added throughout 2025. Customer relationships in subsidized rural areas grew by 46,000 in Q4.

2025 CAPEX Peaks at $11.7B — Targeting 13-14% Capital Intensity by 2028

2025 marked Charter's peak capital expenditure year. Full-year CAPEX reached $11.659 billion, up 3.5% from $11.269 billion in 2024. Of this, $3.94 billion went to line extensions and $1.937 billion to network upgrade/rebuild initiatives.

■ Capital Expenditure Breakdown

Charter projects 2026 CAPEX at approximately $11.4 billion, with significant declines thereafter. The goal is to reduce capital intensity to 13-14% of revenue by 2028. Winfrey expressed confidence that this target remains achievable even with the Cox integration.

Free Cash Flow Reaches $5B — Up 17% YoY

Cash flow metrics showed positive momentum. 2025 operating cash flow reached $16.077 billion, up 11.4% from $14.43 billion. Free cash flow totaled $5.004 billion, a 17.4% increase from $4.257 billion in 2024.

The FCF improvement was driven primarily by lower cash taxes and reduced interest expense. Cash interest payments fell 6.6% to $4.983 billion from $5.334 billion. Higher CAPEX partially offset these gains.

Charter repurchased 17.1 million shares for approximately $5.4 billion in 2025, including 2.9 million shares for $760 million in Q4. Total debt stood at $94.6 billion (principal) at year-end, with approximately $4.4 billion of additional liquidity available under credit facilities.

■ Full Year 2025 Financial Summary

* Source: Charter Communications FY 2025 Earnings Release

[ANALYSIS] Defensive Innovation — Video Redefined as 'Killer App'

Charter's case offers a clear strategic playbook for traditional pay-TV operators navigating the cord-cutting era. The key insight: rather than pursuing video growth for its own sake, Charter repositioned video as a defensive tool to protect and grow its core broadband and mobile revenue streams.

By bundling streaming services worth $117/month (soon $129/month) into cable packages, Charter achieved two objectives simultaneously. First, it retained existing customers who might otherwise have cut the cord to go streaming-only. Second, it established a differentiation point in the highly competitive broadband market.

As CEO Winfrey characterized it, "getting back to positive net additions is a game of inches." This is not an aggressive growth strategy but rather a sophisticated defensive play—holding ground inch by inch in a fiercely competitive environment. Video is no longer a standalone profit center; it has been redefined as a "killer app" that enhances the value of connectivity services as a whole.

Structural challenges remain. Rising programming costs—particularly retransmission fees—combined with ARPU pressure from skinny bundle expansion present ongoing profitability management challenges. The 7.7% Q4 video ARPU decline illustrates this dilemma clearly: Charter traded margin for customer retention.

[IMPLICATIONS] Five Strategic Takeaways for the Industry

◆ Strategic Lessons from Charter's Turnaround

① Concrete Value Communication: Quantify bundle value in specific dollar terms ("$117/month value") rather than abstract "benefits"

② Unified Experience Platform: Consolidate fragmented streaming services into a single interface (Spectrum App Store) to maximize customer convenience

③ Role Redefinition: Reposition video from profit center to churn prevention tool for connectivity services

④ Flexible Pricing Architecture: Offer multi-tier products from full packages to skinny bundles to à la carte to address diverse customer segments

⑤ Fixed-Mobile Convergence: Leverage mobile integration for customer lock-in and multi-product penetration

Key Watch Points Going Forward

• Cox acquisition close (expected mid-2026) and integration synergy realization

• Finding optimal balance between ARPU decline and subscriber growth

• Programming cost negotiations, particularly retransmission fees

• Network Evolution Initiative completion by 2027 target

• Continued improvement in broadband subscriber losses and path to net adds

• Achievement of 13-14% capital intensity target by 2028

◆ CONCLUSION

Charter Communications' Q4 2025 results demonstrate that traditional pay-TV can survive in the streaming era—but the playbook has fundamentally changed. Video is no longer a standalone profit center; it has been redefined as a "killer app" that enhances the value of connectivity services as a whole. While structural challenges around programming costs and ARPU pressure persist, Charter's experiment provides an important benchmark for the global pay-TV industry. The completion of the $34.5 billion Cox acquisition and Network Evolution Initiative in 2026-2027 will mark Charter's next inflection point.

▣ Sources & References

【Primary Sources — Official Releases】

• Charter Communications, "Charter Announces Fourth Quarter and Full Year 2025 Results", January 30, 2026

URL: https://corporate.charter.com/newsroom/charter-announces-fourth-quarter-and-full-year-2025-results

• Charter Communications Q4 2025 Earnings Conference Call Transcript, January 30, 2026, 08:30 ET

【Secondary Sources — Media Coverage】

• The Hollywood Reporter, "Charter Adds 44,000 Pay-TV Subscribers in Fourth Quarter", Etan Vlessing, January 30, 2026

URL: https://www.hollywoodreporter.com/business/business-news/charter-adds-pay-tv-subscribers-1236489512/

• StreamTV Insider, "Charter returns pay TV to net adds in Q4", Bevin Fletcher, January 30, 2026

URL: https://www.streamtvinsider.com/technology/charter-returns-pay-tv-net-adds-q4

【Reference — Market Data】

• Opensignal, "USA: Fixed Broadband Experience Report — May 2025"

• Charter Communications SEC Filings: Form 10-K (Annual Report), Form 8-K (Current Report)

• Charter Communications Investor Relations: ir.charter.com