AT&T’s traditional TV business continues decline, but digital offers growth

Oct. 24, 2018 / 2:45 PM GMT

By Claire Atkinson

AT&T’s traditional subscription TV business continues to lose subscribers — and its digital replacement isn’t picking up the slack.

AT&T announced on Wednesday that it lost 346,000 subscribers to its DirecTV and U-verse services in the third quarter of 2018, adding to declines in previous quarters.

Previous losses had been offset by DirecTVNow, the company’s internet-delivered TV service that provides more than 85 channels for $55 per month. But the service added only 49,000 subscribers in the most recent quarter.

By contrast Netflix added 650,000 subscribers in the same period.

“We continue to navigate industry pressure,” John Stephens, AT&T’s chief financial officer, said. “We are refining our four video products tailoring them to customer needs.”

AT&T currently offers four ways to subscribe to video: WatchTV, a subscription service offered to mobile phone subscribers, streaming service DirecTVNow, satellite service DirectTV, and cable service U-verse.

DirecTVNow has around two million customers, executives said on its call with investors. The company has also announced a plan to create a new streaming service using HBO and Warner Bros.content that will launch next year.

AT&T bought Time Warner for $85.4 billion last year and touted a plan to use AT&T data to better target consumers with high-precision advertising. Its ad unit, Xandr, saw positive momentum, growing revenue by 30 percent in part thanks to its acquisition of adtech firm AppNexus. However, domestic advertising revenue at Turner declined 4 percent in the period, the company said on the earnings call.

Stephens noted that customers are “seasonally shopping for shows,” and that the company would set up a “product re-alignment in 2019.”