AT&T lost 658,000 video subscribers in the United States in the last quarter of 2018. 267,000 of them were to its DIRECTV NOW online service, which lost subscribers for the first time since its launch, following the end of introductory offers, falling to 1.59 million. Over half a million accounts were established for its Watch TV service.
The DIRECTV satellite service lost 403,000 subscribers. It shed 1.2 million subscribers in 2018, a loss of 6%, taking its total to 19.22 million.
The AT&T U-verse telco television service gained 12,000 subscribers, adding 50,000 over the year. Its total of 3.68 million is still far from its peak of 5.97 million.
DIRECTV NOW online video subscribers fell as the company scaled back promotions and the number of customers on entry-level plans declined significantly. The number of subscribers on higher-tiered plans remained stable.
Having lost half a million DIRECT NOW subscribers on promotional plans, the company argues that the number of full price subscribers grew. It said that eliminating promotions for low value, high churn customers clearly elevated subscriber losses of the quarter but average revenue for the remaining users increased.
Chief executive Randall Stephenson told analysts the remaining customer base is growing, highly engaged and has good churn characteristics, adding “we actually like where we are in terms of how we’re positioning the streaming product”.
Regarding traditional linear television, he said “We’re not going to be horridly promotional to try to drive growth in this except where we have a good strong broadband footprint”.
He said Watch TV, which he described as “our very low-end content offering for our mobile subscribers” had half a million accounts. “We’re not yet calling them subscribers till we see behaviorally how they engage with the product and what kind of profitability we have.”
AT&T ended 2018 with a total of 24.5 million video subscribers in the United States, which is 750,000 fewer than a year previously.
AT&T reported quarterly video entertainment revenue was down by over half a billion dollars on the same quarter the previous year, to $8.68 billion.
Outside the United States, the AT&T service in Latin America and the Caribbean, now branded Vrio, gained 250,000 subscribers over the year, ending 2018 with a total of 13,84 million.