AT&T reported a fourth-quarter loss of 267,000 users for its virtual pay TV platform DirecTV Now, as the service’s exceptional first-two-year growth culminated in a equally staggering hemorrhage of 14.3% of the subscriber base.
DirecTV Now, which reported an addition of 342,000 users as recently as the second quarter of last year, now has less than 1.6 million subscribers. It was widely anticipated last summer that DirecTV Now would surpass the Dish Network’s growth-stalled Sling TV for size supremacy in the virtual MVPD category, where scale seems to be the only way out of what is now a money-losing business model.
However, with analysts estimated Hulu+ Live TV to have crossed the 1.6 million user threshold, DirecTV Now might not even be in second place.
AT&T had told investors late last year that DirecTV Now was in for some pain, with the company deciding to go cold turkey on aggressive promotional strategies. AT&T said that as many as 500,000 DirecTV Now users in 2018 were on $10-a-month plans tied to wireless accounts. The base prices of the service is $40 a month, and it’s likely to go up soon.
Of course, there’s telling investors there’s going to be a few customer losses. And then there’s 267,000.
Certainly, overall, it was a horrible quarter for AT&T, the No. 1 pay TV provider in America, which also lost around 391,000 subscribers across its DirecTV satellite and U-verse linear platforms.
The attrition had a negative impact, of course, on AT&T’s bottom line. MCN has a full report on that here.