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AT&T Loses 390,000 U-verse, DirecTV Subscribers; Denies Cord-Cutting a Factor

Phillip Dampier October 12, 2017 AT&T, Competition, Consumer News, Online Video 3 Comments

AT&T tried to calm investors Wednesday in an 8-K filing with regulators, reporting that although it has likely lost 390,000 DirecTV satellite and U-verse video customers in the last three months, it has gained 300,000 online streaming customers for its DirecTV Now TV service.

The company is required to report materially adverse changes to its business to shareholders, and AT&T elected not to wait until its next quarterly earnings report to divulge the substantial losses in video customers. DirecTV Now gains are not expected to be a significant panacea for investors because AT&T reportedly makes little or no profit from the service since it launched in late 2016.

AT&T avoided blaming cord-cutting for customer losses:

The video net losses were driven by heightened competition in traditional pay TV markets and over-the-top services, hurricanes and our stricter credit standards. The decline of traditional video subscribers negatively impacts our Entertainment Group revenues and margins, resulting in an adjusted consolidated operating income margin that will be essentially flat versus the year-ago third quarter.

Overall, the company confessed it lost 90,000 total video subscriptions once DirecTV Now’s gains were included.

AT&T told investors earlier this year it was substantially cutting marketing of its U-verse video service and began encouraging customers to subscribe to DirecTV satellite service instead. But the satellite TV service is rapidly losing customers as well. Wall Street analysts suggest the only explanation for this is cord-cutting.

“The issue is in the acceleration in cord-cutting, and the prevalence of [online streaming], not each other,” said Craig Moffett of MoffettNathanson. “It is becoming increasingly clear that the wheels are falling off of satellite TV” noting that Dish Networks subscriber numbers appeared dismal as well.

Moffett predicted with the ongoing video losses impacting satellite television, he thought it unthinkable the two satellite companies might consider merging.

Currently there are 3 comments on this Article:

  1. BobInIllinois says:

    DirecTV is a great premium TV service. Downside is that consumers are looking to cut expenses, and they think that streaming can do that. Most consumers tend to watch under 20 channels.

    More streaming services continue to launch every quarter. Increasing number of households finding fiber available, especially in suburban, rural areas. Also, cablecos continuing to increase 1 Gig availability in same suburban/rural areas. DirecTV only has pay TV to offer, as they have no broadband product.

  2. LG says:

    This is what happens when you charge $150-$300 for TV. People have better things to spend their money on. TV in general is losing viewers after decades of incessant, repetitive, numerous and loud ads. A large part of an hour is consumed by ads. I thought the idea of subscription based TV was to avoid this? I remember when there were no ads on cable. That ended a long time ago. Now it’s time for their business to end.

  3. Will says:

    I have to agree with ATT here… Can’t blame cord cutters when it’s just that ATT’s video service is awful and customers are fleeing at the first opportunity.







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