AT&T’s focus on DIRECTV NOW
US wireless carrier AT&T (T) has been facing significant declines in its satellite TV offerings. It lost 544,000 pay-TV customers in the first quarter, more than its expected loss of 385,000. A growing shift from traditional cable services to low-cost video streaming services provided by players such as Netflix and Amazon have disrupted pay-TV companies.
Amid declining pay-TV subscriber numbers and the rise of online streaming services, AT&T started the streaming service offering DIRECTV NOW to win customers. However, AT&T has been losing DIRECTV NOW customers for the past two consecutive quarters. In the first quarter of 2019, DIRECTV NOW lost 83,000 subscribers, worse than analysts’ expectation of 82,000 losses. DIRECTV NOW also lost 267,000 customers in the fourth quarter, as the company stopped offering its initial promotional plan to save on costs and reduce its debt level.
Subscription price increases
AT&T recently raised the subscription prices for its DIRECTV NOW plans, which might have resulted in its DIRECTV NOW customer losses.
Like AT&T, Hulu and Netflix have raised their monthly subscription prices to boost profits. While Hulu has increased the cost of its on-demand live TV subscriptions, Netflix has raised its subscription prices by 13%–18% for US subscribers.