• by Wayne Friedman , Staff Writer, 2 hours ago

 Old-style pay cable TV from linear networks -- which have now morphed into “virtual” internet-based business -- still has some life. Emphasis should be on the word "some."

Charter Communications saw a rare improvement recently in its business by combining its traditional video subscriber business into its more popular streaming-centric business.

“Eye-popping.” says Craig Moffett, media analyst/co-founder of MoffettNathanson Research, who recently noted the company's quarterly gains compared to a year ago.

This came after Charter negotiated deals with all major “Big Five” streamers -- Disney+, Hulu, Paramount+, Peacock, and Max -- for its standard "Spectrum Select" packages at no additional cost. The price tag is at $125 a month.

Bundling all thisinto one package means that the likelihood of canceling -- or churning -- drops significantly.

This gave Charter a net gain of 44,000 subscribers in its fourth quarter, while analysts expected a 76,000 loss.

Charter does this by providing the streaming apps, essentially for free. Charter has been making combined streaming platform and linear TV network deals (subscription, affiliate or carriage fees) with those parent companies.

This might be good for the short term, especially for older U.S. consumers.

But for the long term, there could be a different story -- when and if hard-pressed companies look to make even higher gains for their streaming platforms as their linear TV networks continue to sink.

Currently, analysts believe Charter is essentially trading profit margins for customer retention. And one key measure -- its Average Revenue Per User (ARPU) -- looks to suffer.

At the same time, old-line cable TV distribution and now broadband companies are finding it difficult to grow; all major broadband subscribers have seen weakened results.

Customers might buy into this kind of deal -- in the interim -- as a transition of sorts for those who are unsure about where the business is going.

The trouble is that the maturing of both sides of the business -- linear (steady double-digit percentage revenue declines) and streaming (higher consumer pricing) --  is not stopping.

Something’s got to give -- and consumers will make more diverse and more difficult home entertainment decisions.