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DirecTV Now Reaches 500,000 Subs

25 Jul, 2017 By: Erik Gruenwedel

DirecTV Now, the online TV service from AT&T, ended the second quarter (ended June 30) with 500,000 subscribers. The tally — since the service launched last November — helped AT&T offset ongoing video subscriber declines.

The telecom, which is attempting to close its $84.5 billion acquisition of Time Warner, lost 350,000 video subs, which included 156,000 DirecTV subs and 195,000 legacy U-verse subs. It added 152,000 DirecTV Now subs.

Traditional video subscribers declined 351,000 in the quarter due to seasonality and elevated competition. IPTV subscribers declined by 195,000 as the company continued to focus on profitability. About 85% of the traditional video base is now on the satellite platform. The company ended the quarter with 25.2 million total video subscribers, essentially flat from a year ago.

“Half of our DirecTV Now subscribers are coming from traditional pay-TV, mainly from our competitors, and the other half had no pay-TV service at all,” CFO John Stephens said on the company's fiscal call.

Stephens said DirecTV Now affords AT&T an opportunity to service “a lot of” customers its traditional pay-TV service missed, such as millennials and consumers who haven't been able to have the creditworthiness to buy pay-TV in a long-term contract.

“So for us, it's a really attractive next step into the future,” he said.

AT&T added 178,000 net cell phone subscribers. It added 2.8 million domestic wireless subs; 476,000 net wireless subs in Mexico. It had its best-ever postpaid phone churn of 0.79%.

The company plans to incorporate mobile-centric content from Time Warner subsidiaries Warner Bros., HBO and Turner.

During the quarter, AT&T began giving new DirecTV Now subs a free Roku Premiere streaming device when they paid for two months of service up front.

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