AT&T brass tried last week to put a happy face on continued heavy video customer losses at the telco in the first quarter, with chairman and CEO Randall Stephenson pledging to analysts that declines at its DirecTV Now streaming service will stabilize in the near future.
DirecTV Now shed about 83,000 customers in the first quarter, ending the period with about 1.5 million subscribers. It lost about 350,000 customers in the past six months.
AT&T has attributed most of those losses to customers that abandoned the service after heavy promotional discounts expired and a price hike was initiated last year. While the company believes most of those pricing-related defections are behind it, Stephenson warned there may be some additional losses in the second quarter as new price points flow through.
“The second half of the year should be decent,” he said on a conference call with analysts to discuss Q1 results.
AT&T is placing new hope in its third streaming service, an as-yet-unnamed offering that is expected to deliver linear-quality TV through a proprietary thin-client set-top. Stephenson said the new product — slated for a Q4 release — is more of a satellite replacement product, addressing low-end customers that churn from the satellite product most often. The telco said it plans to offer more details on the streaming product at an Analyst Day meeting in the fall.
DirecTV can use all the help it can get. The satellite-TV service, along with its wireline cousin U-verse TV, lost 544,000 subscribers in Q1 — 661,000 if not for a change in churn accounting that boosted net additions by 117,000 customers.
Heavy losses in the legacy business didn’t do much to boost investor spirits. AT&T stock was down about 4% on April 24 and fell another 1.5% to $30.34 on April 25.
Read about Comcast’s relatively strong cable results at multichannel.com/blog/april29.