In Pay-TV Business, AT&T Wakes Up and Smells the Coffee


May. 9 2019, Published 2:39 p.m. ET

The pay-TV market is shrinking

Few major pay-TV companies have seen the worst of cord cutting more than AT&T (T). Between the fourth quarter of 2018 and the first quarter of 2019, AT&T shed almost 1.3 million pay-TV customers. The pay-TV market is generally shrinking. Dish Network (DISH) and Charter Communications (CHTR) lost 259,000 and 145,000 pay-TV subscribers, respectively, in the first quarter. Comcast (CMCSA) and Altice USA (ATUS) shed 121,000 and 10,000 pay-TV subscribers, respectively, in the quarter. AT&T lost 627,000 pay-TV subscribers in the same period.

AT&T seems to have woken up to the reality that it may not halt the decline in its pay-TV business, so the company is trying a new strategy to try to continue making money from its existing pay-TV customers.

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AT&T is keen to get pay-TV customers using its other products

AT&T works with an army of contract salespeople who move door-to-door to help it sign up pay-TV customers. According to a report from Business Insider, AT&T now requires its door-to-door pay-TV salespeople to sell its other products, such as Internet and wireless plans. At the end of the first quarter, AT&T had nearly 24 million subscribers on its DIRECTV pay-TV service. Getting these customers to pick up its other products could be a huge boost to AT&T’s top line even if the traditional pay-TV market continues to shrink.

It’s not all smooth for AT&T in its attempt to get its pay-TV customers on more of its products. It turns out that some salespeople have seen their earnings drop as a result of selling non-pay-TV products, causing some to abandon the job, a challenge that could derail AT&T’s efforts.


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