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Why AT&T Expects DIRECTV Now’s Subscriber Growth to Continue

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AT&T’s DIRECTV Now

AT&T’s (T) DIRECTV Now OTT (over-the-top) online video viewing service delivers content directly to subscribers over the Internet instead of over a satellite or cable connection. In 3Q17, the telecom company gained 296,000 DIRECTV Now customers.

During the UBS 45th Annual Global Media and Communications Conference on December 5, 2017, AT&T chief financial officer John Stephens spoke about AT&T’s video business. Stephens stated that DIRECTV Now has surpassed a million customers and is set to see solid growth thanks to improved services and bundling opportunities. Furthermore, management expects new product capabilities, such as cloud digital video recording, 4K resolution, multiple stream opportunities, pay-per-view services, and digital advertising to drive profitability.

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Peer comparison

Amazon’s (AMZN) Prime Video and Netflix (NFLX) compete with AT&T in the online video streaming space. In 3Q17, Netflix added 5.3 million customers, while Amazon added 5.0 million US Prime customers, according to Consumer Intelligence Research Partners and cited by Business Insider. As OTT video streaming services continue to rapidly add subscribers, traditional pay-TV companies are losing subscribers. Charter Communications (CHTR) lost 104,000 pay-TV customers in 3Q17, while Comcast (CMCSA) lost 125,000.

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