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Why AT&T Is Losing US Pay-TV Customers

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Cord cutting is denting the US pay-TV customer base

Like other pay-TV service operators, AT&T (T) is facing a decline in its US pay-TV customer base due to cord cutting. In the fourth quarter, AT&T lost 391,000 traditional US pay-TV customers. This number includes 403,000 satellite TV customer losses and 12,000 U-verse TV customer gains. In addition, Comcast (CMCSA) and Charter Communications (CHTR) lost 19,000 and 36,000 residential video customers, respectively.

This reduction in the company’s US pay-TV customer base is mostly the result of the increasing popularity of OTT (over-the-top) offerings.

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OTT market

Millions of consumers have already swapped traditional pay-TV services for OTT, as OTT services directly provide content to users over the Internet at lower rates than a satellite TV or cable connection.

Currently, Amazon Prime Video, YouTube TV, and Netflix (NFLX) are popular streaming service providers. In the fourth quarter, Netflix added 8.8 million customers worldwide.

To increase the competition, AT&T’s WarnerMedia and the Walt Disney Company (DIS) are also planning to launch streaming services in late 2019.

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