What Factors and Trends Have Been Driving AT&T's Performance?

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What Factors and Trends Have Been Driving AT&T's Performance? PART 1 OF 9

What’s Expected for AT&T’s DIRECTV NOW Customer Acquisitions


AT&T’s (T) DIRECTV NOW, launched in late 2016 to much fanfare, saw strong initial adoption. AT&T reported ~200,000 video net additions driven entirely by DIRECTV NOW in the service’s first month. AT&T’s focus on the DIRECTV NOW service is increasing, as its pay-TV business is facing subscriber losses.

AT&T’s management has indicated that the company has moved from promotional prices to more run-rate prices. This move provides AT&T with the opportunity to bundle wireless and get into new customer areas, multiple dwelling units, and some of the youth market. As a result, AT&T is positive about DIRECTV NOW’s growth.

What&#8217;s Expected for AT&amp;T&#8217;s DIRECTV NOW Customer Acquisitions

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Over-the-top video service: Growth potential

The introduction of AT&T’s DIRECTV NOW over-the-top (or OTT) video service in 4Q16 will help AT&T diversify from its US wireless business. The OTT video streaming service has huge growth potential. Users have been subscribing to OTT services in greater numbers than ever before, mainly due to the high monthly bills that users are paying cable and satellite TV providers. A 4Q16 report from Digitalsmiths suggests that about 35% of users pay more than $100 every month to their pay-TV provider, as you can see in the above graph. AT&T’s competitors in the video streaming space are Netflix (NFLX), Amazon (AMZN), Verizon’s (VZ) Go90, and Alphabet’s (GOOGL) YouTube.


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