DirecTV Now Gains Offset AT&T’s Traditional Pay TV Losses in Q1

Adds 312,000 lower-margin DirecTV Now subs in Q1, extending total to 1.46M
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AT&T said sub gains for DirecTV Now, its OTT TV service, were more than enough to offset losses from its “linear” video service category, comprised of its DirecTV satellite TV service and U-verse video, its managed IPTV offering.  

During Q1, AT&T added 312,000 DirecTV Now subs, extending that total to 1.46 million.  

On the linear/traditional side of the pay TV ledger, AT&T lost 187,000 subs (188,000 DirecTV satellite sub losses, and 1,000 U-verse video sub gains).  

AT&T ended the quarter with 25.36 million total video connections, made up of 20.27 DirecTV satellite subs, 3.63 million U-verse video subs, and almost 1.5 million subs for DirecTV Now, the national OTT service that was launched in November 2016.  

Though DirecTV Now adds more than offset traditional pay TV losses, those lower-margin, no-contract customers are on less expensive, skinner video packages. With that as the backdrop, AT&T’s linear video ARPU for Q1 was $113.43 (or $114.91 using the company’s historical video ARPU model), well down from linear video ARPU of $121.16 in the year-ago period.  

AT&T added a net 82,000 broadband subs in Q1 via the addition of 154,000 IP broadband subs alongside a loss of 72,000 DSL customers. AT&T ended the period with 14.43 million total broadband subs (13.61 million IP, and 816,000 DSL), and more than 8 million customer locations passed with fiber. 

AT&T also ended Q1 with 9.64 million wired voice connections, down from 11 million in the year ago period.  

It also notched 3.2 million total wireless net adds – 2.6 million in the U.S., and 543,000 in Mexico.  

The company posted Q1 earnings of 85 cents per share on revenues of $38.04 billion, off from Wall Street expectations of 87 cents and $39.31 billion. AT&T shares were down  

AT&T shares were down $1.59 (4.52%) to $33.61 each in after-hours trading Wednesday.  

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