Stocks/Earnings

AT&T Adds 296K DirecTV Now Subs in Q3

OTT additions not enough to completely overcome ‘traditional’ pay TV loss of 385K subs 10/24/2017 4:30 PM Eastern Last updated at 10/24/2017 5:22 PM

AT&T announced Tuesday that it added 296,000 DirecTV Now subscribers during Q3 2017, extending that base to about 800,000.

Those OTT TV gains were not enough to offset “traditional” pay TV declines of 385,000 from DirecTV’s satellite offering and U-verse TV. Factoring in both sides, and AT&T lost 89,000 net video subs in the period.

Those numbers line up with those that AT&T had already disclosed in a recent 8-K filing.

RELATED: AT&T to Lose 390K ‘Traditional’ Video Subs, Offset by 300K OTT Gains

AT&T attributed the net video sub loss to heightened competition from traditional pay TV rivals as well as OTT services, stricter credit standards and disruptions caused by recent hurricanes.

On the plus side, AT&T said its bundling strategy is working, as satellite churn drops 50% when service is bundled with wireless offerings.

It also said customer acquisition costs for DirecTV Now, which launched last November, is a fraction of what it is for traditional pay TV services.

For Q3, AT&T added 29,000 total broadband subs, with 125,000 IP broadband net adds more than offsetting DSL losses. AT&T said it now has fewer than 1 million subs left on its DSL networks.

AT&T said AdWorks, its advanced advertising arm, saw revenues climb by more than 11% year-on-year thanks in large part to growth in targeted advertising.

AT&T ended the quarter with 6 million “customer locations” passed with fiber.

RELATED: Ad Group Recommends That AT&T Tweak Fiber Claims

AT&T posted consolidated Q3 revenues of $39.7 billion, down from $40.9 billion a year earlier, and net income of $3 billion, or 49 cents per diluted share.

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