I’ve been tracking the number of claimed broadband customers at the largest telcos and cable companies for years. When I was looking at the statistics for the first quarter of 2023, it struck me that the biggest cable companies are now making up for the loss of cable TV customers by increasing broadband rates.

For the last decade, the big cable companies have been thriving financially through big annual increases in broadband customers. This came year after year as large numbers of customers bailed on DSL, along with organic population growth – the cable companies won most new broadband households.

Every traditional cable TV provider started to lose traditional cable TV customers starting around the end of 2018. Since that time, the loss of cable TV customers has accelerated. Small ISPs will tell you that they don’t make much money from cable TV, and many of them have abandoned the business line. But this is not the case for the biggest cable companies, which still have a decent monthly margin from cable TV.

But the margins on broadband are far higher than on cable TV, and as cable TV customers dropped, cable companies continued to add broadband customers, and profits continued to increase.

Profits were further bolstered by broadband rate increases. Comcast has been increasing broadband rates by about $3 per year, while Charter’s rate increases have been closer to $5. Charter broadband rates were significantly lower than Comcast, and they seem to be in the process of closing the gap.

Over the last year, the traditional formula of covering the losses of cable TV customers with the growth of broadband customers came to a screeching halt. Consider the following table that shows the annual change in broadband and cable TV customers for Comcast and Charter since the end of the first quarter of 2019. These numbers come from the Leichtman Research Group, which publishes customers every quarter for the biggest ISPs and cable providers.

In the years ended in the first quarter of 2020 and 2021, Comcast added more broadband customers than the losses of cable TV customers. That flipped in the year ended 1Q 2022 as Comcast lost 562,000 more cable TV customers than it gained broadband customers. In the year just ended 1Q 2023, the wheels have totally come off for Comcast. The company lost over 2.1 million cable TV customers while gaining only 161,000 broadband customers.

Charter’s numbers are not quite as dramatic since the company has been able to hang onto traditional cable TV customers better than the rest of the industry. But Charter’s net customer gains for broadband have slowed to only 235,000 for the year ended 1Q 2023 while traditional cable TV losses are accelerating.

It now seems like both big cable companies must make up for losses of cable TV customers through broadband rate increases. The day of broadband growth subsidizing cable TV losses is over. I wonder how folks who cut the cord from these two companies feel about having the companies make up for losing them as cable TV customers by raising broadband rates?