Spectrum price hike drives some to cut cable
Emily Hodge had used Time Warner Cable’s cable service bundled with internet and phone for 10 years, but canceled her package six months ago after Time Warner’s replacement, Spectrum, raised the price.
Spectrum’s owner, Charter Communications Inc., increased Hodge’s monthly bill from $153 to $190, she said, causing her to abandon the company’s cable and phone services. The Watertown resident and her significant other, Frank Taylor, now use Sling TV, Netflix and Hulu in place of Spectrum cable, which she said costs less.
Hodge said she still receives fliers advertising Spectrum’s bundle package with cable, phone and internet at $29.99 per month each for the first year, but she said the company hikes its prices after that initial year.
“I’m not getting screwed over again,” she said.
Hodge was one of hundreds of thousands of customers who dropped the Stamford, Conn.-based telecommunication company’s cable service since last March.
According to its first quarter results, Charter experienced a 314,000 cable customer decrease from 16,736,000 users by the end of its first quarter last year to 16,422,000 users March 31. The decline also included a 122,000 loss in cable users during the first quarter alone, 22,000 more than its 100,000 cable user loss the same time last year.
Christopher Winfrey, chief financial officer of Charter, told investors during a conference call that one key factor for the reduction in cable customers during quarter one was the company disconnecting those who failed to pay their bills.
Another key factor in the quarter one drop was from customers who discontinued their service after Charter changed their legacy price packages from Time Warner and Bright House Networks LLC, which Charter also acquired in 2016, into its own Spectrum pricing model, Winfrey said.
“These factors had a declining impact on our results as the quarter progressed. It should continue to have less of a monthly impact as we progress through (quarter) two,” he said. “The big driver was the non-pay disconnects. Had it not been for that, customer net adds, particularly at (Time Warner) legacy for video and internet would have been — you know — better year over year basis, so its entirely driven by that issue. Sales are up across the company, across the (Time Warner customer base) in particular, which is obviously the largest driver.”
But in the North Country, residential Spectrum cable and bundle package customers blasted Charter’s higher prices, with some claiming it motivated them to cut the cord of their cable service.
Crysta Corbett, Potsdam, said in an email that she canceled her Spectrum cable and internet package last year when the company eliminated the Time Warner promotional pricing she had, and increased the cost.
“We now have just internet through Spectrum and use Sling TV for cable and any premium movie channels we want. We also use Netflix and the ABC app to watch the remainder of our programming,” she said. “I do not regret getting rid of cable for internet TV!”
Jennifer A. Shear, Watertown, said she terminated her cable service with Spectrum five months ago after the company increased the bill for her package after implementing Spectrum, although she kept the company’s internet service. Shear now uses Sling TV, which she said costs only $25 per month.
“[Spectrum] kind of conned me by cutting my deal with Time Warner Cable and put me into their’s,” she said.
Cable providers like Charter have also had to contend for years with many consumers’ waning interest in cable and their growing interest in alternate video services.
Lois Coates of Deferiet said in an email that she canceled her cable service with Time Warner Cable three years ago because of its pricing and her family’s lack of free time to watch television.
Her family uses Roku TV to receive Netflix, Hulu and Vudu, as well as Amazon Prime.
“With all of the new technology and streaming services coming out, we don’t need the expensive cable packages when they really don’t offer much anyway,” she said.
Despite its decline in cable users, Charter reported earning $4,297,000 from its residential video users, a $218,000, or 5.3 percent, increase from the same time last year when it earned $4,079,000. According to the report, the increase was driven by the revenue it earned from its three-in-one packages.
However, company officials are hedging their bets on the growth of video packages.
“While we think that we make a great video product available to our customers and that great video product will continue to help us drive the overall connectivity of the business we have, if we’re off in our forecast to that, it’s not significantly financially material to our growth prospects,” said Thomas Rutledge, chairman and CEO of Charter, during the conference call.