AT&T introduced DirecTV Now in order to get the cord-cutters back that it has been losing. They’re even pushing the “triply-play” bundles that include internet, TV, and wireless in order to keep their customers, but things seem to be a lot worse for the company.
According to a new filing with the Securities and Exchange Commission, the company has lost nearly 400,000 traditional cable subscribers last quarter. This is more than the worst forecasts previously made. The company posted a net loss of 90,000 pay TV subscribers. Even though the company added 300,000 DirecTV Now subscribers, 390,000 traditional TV subscribers left the service in just 3 months. That’s a substantial amount of lost customers.
The speed at which AT&T is losing traditional subscribers is astonishing, even though it’s picking up DirecTV Now subscribers. This is a huge problem for the company and will continue to be in the foreseeable future. DirecTV Now service, which starts at an affordable price of $35 per month, is substantially more affordable than the average cable bundle, which on average costs $103 per month. Why wouldn’t customer jump ship to save the extra money? Of the DirecTV Now subscribers, many of them are more than likely wireless customers too of AT&T, which means they only pay $10 per month for the streaming service. AT&T is more than likely losing money on these customers.
Cord-cutting is disrupting the cable industry like no other. Streaming TV market is able to dominate the cable industry so quickly, and this is a problem for them because it brings some serious competition. Streaming services like AT&T, YouTube, Hulu, and Fubo are all at a $40-per-month price point because they can offer smaller channel packages and still turn a small profit. While this form of entertainment is better and cheaper for consumers, it’s definitely devastating for the cable TV market.