AT&T CEO: DirecTV Now ‘Off to a Really Fast Start’

Says new OTT TV service connecting with younger, urban consumers, apartment dwellers
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DirecTV Now is being punished in social media circles and in recent product reviews for technical snafus that have stymied the OTT-TV service in its early days, but AT&T seems pleased with the results it's seeing so far. 

DirecTV is “off to a really fast start,” Randall Stephenson, AT&T’s chairman and CEO, said on the company’s Q4 call Wednesday, later pointing out that U-verse TV, launched in 2007, took about 18 months to get to 200,000 subs.

Though AT&T’s traditional pay TV base lost 27,000 subs in Q4, the 200,000-plus paid DirecTV subs generated in its first month allowed AT&T’s total video sub base to finish the quarter in the black.

RELATED: AT&T Sheds 262K U-verse TV Subs, Adds 235K Satellite TV Subs in Q4

“We’re pleased with the initial results from DirecTV Now, but we’re going to be careful with our expectations,” John Stephens, AT&T’s CFO, said earlier in the call, noting that special promotions and launch pricing helped drive subs to the new service.

No one asked AT&T how it’s dealing with some of the streaming issues that have been plaguing DirecTV Now,  but Stephens volunteered that the company is we're "working through the expected challenges that come with launching a new, innovative service of this magnitude." 

Regarding some early learnings, he said DirecTV Now subs are skewing urban, younger and tend to draw more apartment dwellers than a typical linear customer, and that the sales process is simply different because consumers only need broadband, a supported device and a credit card to get going.

The new regulatory environment also came up on the call, as AT&T was asked to weigh in on the appointment of new FCC Chairman Ajit Pai.

That led to a discussion about zero-rating, a controversial policy in which certain data is exempt from data usage plans. The FCC, then under Tom Wheeler, indicated concerns that the combo of DirecTV now and AT&T sponsored data plans "appears to present significant anti-competitive effects."

RELATED: FCC Takes Aim at DirecTV Now

AT&T defended it then, and Stephenson did so again today, reiterating the stance that AT&T believes that the FCC’s criticism “was without basis, without any legal basis” and that “you should expect to see us go hard” with zero-rated services and policies. We’re having some really good success in the marketplace with this."

Stephens said AT&T is also “ahead of plan” with the company’s FTTP buildout, which is available today to about 4 million consumer customer locations, with 12.5 million locations still being targeted by the buildout.

He said broadband penetration is 9% higher in FTTP markets versus AT&T’s non-fiber footprint, and that about half of new broadband subs in fiber markets take speeds of 100 Mbps or more, and 30% are taking 1 Gig.

“As our fiber deployment accelerates,  we're excited about this growth opportunity,” he said. 

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