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AT&T Warns Investors of Major Looming TV Subscriber Losses

Despite being somewhat more adaptive to changing markets than other major cable companies (see: DirecTV Now), AT&T and DirecTV have been hit notably harder by cord cutting than many other cable providers. The company had already posted record losses in TV subscribers last quarter, losing 156,000 DirecTV satellite TV customers and 195,000 IPTV (formerly known as U-Verse) customers for a net loss of 351,000 “traditional” video subscribers. Part of that is courtesy of AT&T's failure to upgrade millions of DSL customers to next-generation speeds, resulting in them shifting over to cable providers.

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And AT&T is now telling investors that the company's third quarter numbers are going to be just as bad, if not worse.

In a Security and Exchange Commission filing filed this week and spotted by Cynthia Littleton at Variety, AT&T warns that the one-two punch of multiple, devastating hurricanes -- and the rise of competition in the TV space -- is going to result in a net loss of 390,000 traditional cable television subscribers. And while some of these users flocked to DirecTV Now reducing the total net loss to 90,000, those users pay significantly less money to AT&T than they used to, notably denting revenues.

“It should be clear that DirecTV, like all of its cable peers, is suffering from the ravages of cord-cutting,” sector analyst Craig Moffett wrote of AT&T's warning. "It is becoming increasingly clear that the wheels are falling off satellite TV,” he wrote.

That's probably not the kind of press coverage AT&T anticipated when it decided to shell out $69 billion to acquire a satellite TV provider at the dawn of the cord cutting revolution,. Or when it decided to pay another $85 billion on acquiring Time Warner -- instead of putting that money back into its fixed-line network (something that would have helped stem these defections to cable competitors).

Granted, some form of losses here are unavoidable. The traditional cable TV cash cow won't be around for ever, and the reality is that more competition means an end to refusing to compete on price. That message hasn't gotten yet through to executives at companies like Charter, who seem to think that endless rate hikes are somehow sustainable in the growing face of alternative streaming options.

AT&T deserves some credit for at least trying to adapt to the changing market with the launch of DirecTV Now, which has overcome many of its early technical headaches and has begun to slowly build momentum in the market. Still, even with adaptation traditional pay TV providers are in for a very rocky foreseeable future.

Most recommended from 40 comments


ham3843
join:2015-01-15
USA

38 recommendations

ham3843

Member

Money thrown down the drain

MUCH OF THAT MONEY SHOULD HAVE BEEN INVESTED IN FTTH!
Now AT&T is stuck with obsolete infrastructure in much of its footprint, that simply cannot compete
and almost never did to begin with. It's laughable that many AT&T customers can STILL ONLY GET
6/1 internet service in 2017!

Randall should have been fired years ago!

maartena
Elmo
Premium Member
join:2002-05-10
Orange, CA

13 recommendations

maartena

Premium Member

Comcast warned investors....

Comcast warned their investors too.... they warm up the investors so they don't get a shock and sell their stock on the spot.... This isn't new, this is happening across the board. 2017 is shaping up to be the deadliest year though when it comes to subscriber loss.

People are fed up with cable. Pretty soon the only people left on cable are those who MUST have sports that isn't yet on streaming.
Aaron2001
join:2016-12-31
united state

8 recommendations

Aaron2001

Member

RIP

RIP lol

Anon12eaf
@sbcglobal.net

8 recommendations

Anon12eaf

Anon

Fiddling while Rome burns...

These companies need to take a lesson from Amazon or Netflix...

Cut your dividend and spend every dime you have on capex. Yeah Wall Street will hate it in the short term, but in the long term you'll be much better off.

AT&T's capex will be $22 billion this year... but its dividend will be around $12 billion.

Tell me what the point of that is when a major part of your business is in decline? If you're an investor, would you rather get that $12 billion now or see AT&T run capex at $30+ billion and hold more customers by converting them to higher speeds?

Amazon/Netflix et al are stealing everybody's lunch because they don't care about Wall Street's short term fixation on short term profits and re-invest every every $ of revenue into their business.

odreian615
join:2006-01-18
Chicago, IL

6 recommendations

odreian615

Member

Stop focusing on young customers

Give your people that been with you over 3 years the EXACT same perks that you give new customers.
RavenZ7
Premium Member
join:2003-11-21
Houston, TX

5 recommendations

RavenZ7

Premium Member

Their fault

I had AT&T Uverse and loved it but after my 2 year promo price my rate went up $30/month. They would not work with me at all and basically seemed to care less about keeping me. I went to Comcast and they keep giving me my same rate after my promo price is over when I call.
rradina
join:2000-08-08
Chesterfield, MO

4 recommendations

rradina

Member

Wheels and Satellites

said by Craig Moffett :

...It is becoming increasingly clear that the wheels are falling off satellite TV...

Wheels? Isn't there a better idiom for a service that uses space tech? Perhaps "the sun is setting", "the sky is falling", "taking a nosedive"?
tommyr
join:2016-02-01

3 recommendations

tommyr

Member

LOL!

I LOVE IT! I enjoying seeing these companies losing subs! LOVE IT! Keep raising prices you idiots!
alexintexas
join:2003-01-11
San Antonio, TX
Netgear CM500
TP-Link Archer C7
Obihai OBi200

3 recommendations

alexintexas

Member

revisit?!

T still continues to have it wrong

What will T do to turn this around before filing bankruptcy?

and if they file for it T should be torn up to pieces and sold to highest bidder!!



»At&t to buy Time Warner for $80+ billion