Spectrum, operated by Charter Communications (CHTR) bets on an ambitious plan to recover customers who flee.
It's no secret that the company is a victim of a growing trend called cord-cutting, which involves consumers abandoning cable TV for streaming services to save money.
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The trend has contributed to Spectrum losing cable customers at a rapid pace. According to the company's third quarter earnings report For 2024, it lost 294,000 cable customers during the quarter. This contributed to Spectrum facing a 6.7% year-over-year decline in video revenue, compared to the same period last year.
Related: Spectrum makes desperate move to win back fleeing customers
Spectrum also continues to face a decline in Internet customers. In the report, the company revealed that it lost 110,000 Internet customers during the quarter, however, its Internet revenue managed to increase almost 2% year over year.
This comes after many Spectrum customers complained of facing multiple price increases on internet services.
In the report, Spectrum attributed the decline in internet customers to the end of the Affordable Connectivity Program (ACP), which was suspended in February. The ACP was a government-sponsored organization. program Spectrum offered to provide eligible households with a discount of up to $30 per month for Internet service.
Spectrum believes its latest plan will repair its losses
As the loss of Internet and video customers continues to hit the company's pockets, it is relying heavily on a new strategy to win back its customers.
With streaming services becoming increasingly popular among consumers, Spectrum has decided to embrace the trend. The company announced that early next year it will offer its TV Select customers streaming subscriptions worth up to $80 per month at no additional cost.
The streaming apps those customers will have access to include; Disney+, Max, Peacock Premium, ESPN+, BET+, Discovery+, Paramount+, AMC+ and ViX.
Related: Spectrum customers show the company the consequences of price increases
Winning customers back will be accomplished through a four-part plan, Charter CEO Christopher Winfrey presented during a recent earnings call.
The first part of the plan, which Spectrum has already completed, includes programming agreements with the companies that run the streaming services it plans to offer its TV Select customers. Next, Spectrum plans to focus on launching a direct-to-consumer app that allows its customers to access those streaming services.
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Once that step is completed, Spectrum will give customers the ability to upgrade to ad-free versions of those streaming services. It will then shift its focus to launching a “video portal,” which will allow customers to manage all their video subscriptions with the company (including streaming apps).
“I expect all of that to have a pretty significant impact on acquisition and retention, certainly for video, but hopefully also with the Internet when they come together,” Winfrey said during the call.
Angus Mordant/Bloomberg via Getty Images
Spectrum previously revealed its commitment to being more reliable
Spectrum's ambitious plan comes after it unveiled its “Customer Engagement” initiative in September, which aims to build trust among customers at a time when many are choosing to end their business with the company.
In this announcement, the company pledged to strengthen its commitment to quickly resolve service outages for customers, stating that if a service outage lasts more than two hours, customers will be offered a credit for the full day. Additionally, if a customer is not satisfied with their service within the first 30 days of activating it, they will receive a refund.
“If we charge for a service, it should work all the time; If not, our customers need to trust us to get it right,” Charter Executive Vice President of Customer Operations Cliff Hagan said in a Press release.
Spectrum also introduced lower-priced internet plans, with the cheapest starting at $30 a month when bundled with mobile or video services. It also announced that pricing plans for Internet services will be guaranteed for up to three years.
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