Spectrum, which is operated by Charter Communications (CHTR) , is banking on an ambitious plan to attract back fleeing customers.
It is no secret that the company is a victim of a growing trend called cord-cutting, which involves consumers ditching cable TV for streaming services in order to save money.
💰💸 Don’t miss the move: SIGN UP for TheStreet’s FREE Daily newsletter 💰💸
The trend has contributed to Spectrum losing its 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 time period last year.
Related: Spectrum makes a desperate move to win back fleeing customers
Spectrum is also continuing 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 by almost 2% year-over-year.
This comes after many Spectrum customers have complained about facing multiple price increases for internet services.
In the report, Spectrum attributed the decline in internet customers to the end of the Affordable Connectivity Program (ACP), which was discontinued in February. The ACP was a government-sponsored program Spectrum offered to provide eligible households a discount of up to $30 a month for internet service.
Spectrum believes its latest plan will repair its losses
As the loss in both internet and video customers continues to hurt the company’s pockets, it is heavily relying on a new strategy to win back its customers.
With streaming services becoming increasingly popular amongst consumers, Spectrum has decided to embrace the trend. The company announced that by early next year, it will offer its TV Select customers streaming subscriptions that are worth up to $80 per month at no extra 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 company the consequences of hiked prices
Bringing customers back will be accomplished through a four-part plan Charter CEO Christopher Winfrey laid out during a recent earnings call.
The first part of the plan, which Spectrum has already completed, includes landing programming agreements with the companies that run the streaming services it is planning to offer to its TV Select customers. Spectrum then plans to focus on launching a direct-to-consumer app that allows its customers to access those streaming services.
More Technology:
Mark Zuckerberg fires back at a major concern about social mediaDirecTV gives grim response to customers angry over Disney blackoutAI athletes take the field thanks to $600 from EA Sports
After that step is complete, Spectrum will grant customers the ability to upgrade to ad-free versions of those streaming services. It will then shift its focus on launching a “video portal,” allowing customers to manage all of their video subscriptions with the company (including the streaming apps).
“I expect all of that to have a pretty significant impact on acquisition and retention, certainly for video, but hopefully also with internet when bundled together,” said Winfrey during the call.
A customer is shown in a Spectrum store.Â
Angus Mordant/Bloomberg via Getty Images
Spectrum previously revealed its pledge to be more trustworthy
The ambitious plan from Spectrum comes after it unveiled its “Customer Commitment” initiative in September, which aims to build trust amongst customers at a time when so many are opting to end their business with the company.
In this announcement, the company vowed to strengthen its commitment to swiftly resolve service disruptions for customers, claiming that if a service outage lasts for more than two hours, customers will be offered a credit for the full day.Also, if a customer is not satisfied with their service within the first 30 days of activating it, they will receive a refund.
“If we are charging for a service, it should work all the time; if it doesn’t, our customers should trust that we’ll make it right,” said Charter Executive Vice President of Customer Operations Cliff Hagan in a press release.
Spectrum also unveiled 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.
Related: Veteran fund manager sees world of pain coming for stocks
