DirecTV Now Offsetting AT&T Video Subscriber Losses

25 Apr, 2017 By: Erik Gruenwedel

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AT&T April 25 said the DirecTV Now online TV service is offsetting ongoing declines in its linear video business, including U-verse. The telecom, for competitive reasons, does not disclose actual DirecTV Now subscriber data.

AT&T reported a loss of 233,000 video subscribers in the first quarter, ended March 31, compared with a loss of 52,000 subs during the previous-year period. It ended the period with 25 million video subs, compared with 25.3 million a year ago.

"Competitive pressure from cable and the increasing number of over-the-top video alternatives resulted in our video subscribers declining in the quarter. We're taking steps to address the situation, including simplifying offers and bundling with unlimited wireless," CEO Randall Stephenson said on the fiscal call.

About 84% of linear video subs are with DirecTV; the rest are with U-verse, which AT&T is phasing out. It ended the period with 4 million U-verse subs, compared with 5.2 million subs in the previous year.

AT&T said net video subscriber tallies exclude DirecTV Now, which launched last November as a $40 monthly standalone online TV service.

In the quarter, AT&T offered HBO at no additional cost to new DirecTV Now subs, while also introducing a Starz add-on for $8/month for all DirecTV Now customers. It also presented a DirecTV Now concert with Taylor Swift to a crowd of 9,000 in a custom-built venue in Houston in conjunction with the Super Bowl.

The telecom’s entertainment division reported $9 billion in video-related revenue, compared with $8.9 billion during the previous-year period. Pre-tax earnings declined 0.4% to 23.9%, due in part to higher content costs.
 

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