AT&T Grows DirecTV Now; Video Satellite/Fiber-Based Platforms Slip

AT&T continues to see slow gains from its DirectTV Now, streaming digital video platform business. However, its legacy satellite and fiber-based video platforms lost ground.

During its fourth-quarter earnings period, DirectTV Now added 368,000 subscribers, giving the one-year-old service 1.2 million customers.

AT&T says the DirecTV Now streaming service gained business from “cord-cutters” and those “cord-nevers.” In addition, it made subscriber improvements by bundling together its wireless and TV services to consumers.  

At the same time, AT&T’s DirecTV's satellite-television business lost 147,000 subscribers, while the U-verse fiber-optic service lost 60,000 video customers.

During an analyst call on Wednesday, Randall Stephenson, chairman/CEO of AT&T, said: “Since the day we bought DirecTV, we assumed that traditional linear video would be in a declining mode.”



He added: “[But with] OTT and the ability to consume video on mobile devices, we believe this would be the trend. ... As traditional linear declines, our traditional linear video will be repurposed.” Stephenson did not provide any details.

This year, AT&T plans to launch a next generation of its OTT platform, which will include a cloud DVR and a third concurrent stream for DirecTV Now. Also, AT&T plans to launch a “home-centric” version of the OTT service. Stephenson describes it as “a very small, inexpensive streaming device plugged into your TV and then you connect it to any broadband service.”

Fourth-quarter AT&T’s entertainment revenues -- which includes all DirecTV platforms -- sank 4%, from $13.2 billion to $12.7 billion. For the 2017 year, revenues slipped 1%, from $51.3 billion to $50.7 billion.

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