Led by AT&T meltdown, big U.S. pay TV companies take a dive in second quarter

by Steve Blum • , , , ,

AT&T’s video businesses bled out in the second quarter of 2019, losing nearly a million net subscribers. Its two old school linear platforms, the DirecTv satellite service and the DSL-based Uverse service, hemorrhaged 778,000 subscribers while its DirecTv Now streaming platform took a 168,000 subscriber hit.

Actually, it’s the DirecTv Then platform – its new name, announced yesterday, is AT&T TV Now.

It’s a similar, if less gruesome, story for the other three major U.S. pay TV companies. DISH, which is positioning itself for a run at the mobile telecoms sector, lost 79,000 satellite subscribers but picked up 48,000 Sling streaming customers, for a net loss of 31,000 monthly accounts. That’s better than expected – analysts had predicted a net loss of 252,000 subs – and better than the two big cable companies.

Comcast lost 224,000 video subs, and Charter Communications had a net loss of 141,000, with residential cancellation offset a bit by a gain in business accounts.

All up, the major legacy pay TV companies lost 1.3 million subscribers between April and June of 2019. The second quarter of the year is traditionally a tough time for the subscription video business, as people take advantage of summer to move from one home to another, or to just take off and shut down utilities for a few weeks.

Even so, this year’s second quarter losses are “freaking ugly”, as one Wall Street analyst put it.

It was especially ugly for AT&T, though. It lost more than twice as many subscribers as the other three combined. It comes during a period when AT&T is trying to enter the video and motion picture business in a big way, with its acquisition of HBO, the Warner Bros. studios and the Turner networks. So far, it’s misplaying its hand. Grafting businesses driven by artistic and marketing creativity onto a monopoly model telco is a losing proposition.

It’s going to take more than an uninspired rebranding to make AT&T pretty again.