directv losing customers

Directv Losing Customers - AT&T is spinning off its DirecTV to a new company for a fraction of the $48.5 billion it paid for the satellite TV service in 2015. DIRECTV has lost millions of customers on AT&T's watch, and the deal is valued at just $16.25 billion dollars, including debt. .

Private equity firm TPG will own 30% of the company, while AT&T owns the rest. The telco will receive $7.8 billion in cash, including $1.8 billion from TPG and $5.8 billion from new company DirecTV, which borrowed that sum. The new DirecTV will also assume $200 million in AT&T debt.

Directv Losing Customers

AT&T launched its HBO Max streaming service last year and has focused on building that business. It also owns television networks such as CNN and TBS, as well as the film studio Warner Bros. in addition to its major wireless and Internet businesses.

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AT&T said the deal will strengthen its balance sheet and let it focus on the expensive work of upgrading its wireless network with next-generation 5G technology. That update requires expensive investments in radio spectrum — it just spent $23.4 billion on bandwidth in the last U.S. government auction — and AT&T also plans to plow more resources into fiber-optic Internet infrastructure and HBO Max.

The new DirecTV company will include AT&T TV, a streaming version of cable TV, and U-verse, AT&T's oldest cable service. AT&T will keep the DirecTV business in Latin America. AT&T said it expects "little to no change" for subscribers. The transaction is expected to be completed in the second half of the year.

"It's fair to say that some aspects of the (DirectTV) transaction did not play out as we had planned, as pay-TV homes in the US declined at a faster pace across the industry than expected," AT&T wrote.

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U.S. and Canadian subscribers to cable or satellite TV services fell by 27 million between 2010 and 2020, and fell by 6 million in 2020 alone, Digital TV Research said. A flurry of new streaming services have recently emerged to compete with Netflix, including HBO Max, Disney+ and NBCUniversal's Peacock. AT&T's video business lost 6.7 million customers over the past two years and claimed 17.2 million subscribers by the end of 2020. AT&T was absolutely hemorrhaging subscribers in the first quarter of 2020, even by accelerated cord-cutting standards. According to one measure, the company lost more than a million video subscribers in the quarter, with DirecTV losing nearly 900,000 and AT&T now losing about 138,000. This accounts for about half of the 2 million subscribers lost in the first season is not. largest pay TV provider in the United States.

This followed news last December that the company announced a price increase from January, according to Ars Technica.

According to the TV Answer Man website, AT&T on Monday "raised the monthly price for the first year for new DIRECTV and AT&T TV subscribers." However, the company is not raising prices for AT&T TV Now, nor is it raising prices for existing customers.

"New DIRECTV subscribers will now pay $59.99 per month for the first year of their Select plan (155 channels), compared to $49.99 previously; $69.99 per month for the first year of their Choice plan (185 channels), compared to $59.99 per month previously; $79.99 per month for the Xtra plan compared to $69.99 previously; and $84.99 per month for the first year of its Ultimate package (250 channels), compared to $74.99 per month previously," the report said.

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This is reflected on their website. Select Package, per AT&T website, is currently priced at $59.99 per month. According to the Wayback Machine, the same site offered the package for $49.99 per month starting May 7. The same is true for the Choice and Ultimate packages.

In another change, AT&T last week stopped offering AT&T Watch TV, the ultra-slim package launched two years earlier for $15 a month.

"Standalone WatchTV is no longer available for new registrations or re-subscriptions," the website states. "Existing WatchTV customers who subscribe to the app or have an eligible AT&T Unlimited plan can continue to use the service. The page will then, after a few seconds, automatically redirect to the myAT&T login page.

Fast Company described AT&T Watch TV as "an obvious PR stunt from the start," aimed at currying favor as AT&T sought government approval for their ultimately successful acquisition of Time Warner.

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Also this week, Forbes reported details that AT&T employees appear to have unwittingly signed up customers for DirecTV Now subscriptions without their permission, in order to capture subscriber numbers. In 2017, after the scheme was discovered, the company "fired employees found to have engaged in unethical practices." This led to several shareholder lawsuits.

A CNBC report last month said AT&T was looking to dump money-losing DirecTV, but no such deal has yet materialized.

Stephen Silver, a technology writer for The National Interest, is a journalist, essayist, and film critic who also contributes to Philly Voice, Philadelphia Weekly, Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review, and Splice Today. . Co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver. AT&T lost nearly 1 million TV customers in Q2 2020, continuing a rapid exodus of users from DirecTV and other AT&T-operated video services.

In the three months ended June 30, AT&T reported a net loss of 954,000 video customers in earnings results released today. That includes a net loss of 886,000 customers from AT&T's "Premium TV" service, a category that includes satellite DirecTV, U-verse cable service and AT&T TV's Internet service that mimics cable TV. Another 68,000 customers left AT&T TV Now, a separate streaming service formerly called DirecTV Now.

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Higher prices helped drive the loss of customers. As it has done in recent quarters, AT&T said its practice of offering fewer promotional prices contributed to the loss of customers to AT&T TV Now. AT&T said the Premium TV loss was "due to competition and lower gross additions from continued focus on adding higher value customers." AT&T wants customers who leave DirecTV or U-verse to switch to the AT&T Internet TV service and thus remain in the "Premium TV" category, but any gains in the premium streaming service were apparently not high enough to compensate for satellite exit. and wire customers.

The latest quarterly loss left AT&T with 18.4 million video customers, including both Premium TV and AT&T TV Now, down from nearly 25.5 million in mid-2018.

About 91,000 customers counted among the net TV losses actually still had service as of 30th of June. These are subscribers "for whom we have agreed not to have service suspended under the FCC's 'Keep Americans Connected Pledge,'" AT&T said. "For reporting purposes, the Company counts these subscribers as having discontinued service."

This FCC pledge was implemented in response to the coronavirus pandemic, but expired on June 30, so those customers could be cut off forever if they don't repay what they owe. The promise technically only covered broadband and phone service, but AT&T's statement indicates the company is also applying it to TV customers, or at least to customers who bundle TV with phone or broadband.

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AT&T is trying to revive its video fortunes with HBO Max, a result of its acquisition of Time Warner Inc. However, AT&T said Q2 HBO revenue was "$1.6 billion, down 5.2 percent year over year, reflecting a decline in subscription and content revenue. and other revenue." HBO's operating expenses were "$1.5 billion, an increase of 32.5 percent year over year, primarily due to higher programming costs and expenses related to HBO Max," AT&T said.

HBO Max launched in May and has 4 million customers, including "about three million retail customers and another million activations that came through AT&T's platform (i.e., bundled plans)," The Verge wrote today.

"Through cable customers and HBO Now subscribers, the company already had more than 30 million subscribers it could move to HBO Max," The Verge wrote. "[AT&T CEO John] Stankey noted [in an earnings call today] that getting people who subscribe to HBO through traditional linear cable packages to sign up for HBO Max has been slow, and that's an area they want to focus to improve.”

At $15 a month, HBO Max brings in just a fraction of that revenue per month. customer that AT&T gets from satellite and cable-like services. AT&T's average revenue per user for Premium TV is $124.98 per month. That's up from $112.19 in mid-2018, reflecting AT&T's price increases and reduced use of promotions.

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AT&T also lost some broadband customers last quarter, falling from 14.05 million to 13.94 million. Fiber customers rose from 4.1 million to 4.32 million during the three-month period, but losses in the DSL category drove the total number of customers down. The average income per broadband user was $51.61 per month.

On a company-wide basis, AT&T's operating income fell from $44.96 billion in Q2 2019.

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