As customers abandon traditional television services, AT&T is determined to keep up with a changing media landscape.
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The problem is not AT&T’s alone. Verizon reported a loss of 53,000 Fios Video customers in the first quarter while Comcast lost 121,000 cable subscribers. AT&T anticipates the exodus to continue, so it is preparing new streaming offerings to stem the tide. While most legacy services increase in price from year to year, the two-year contracts locked in customers at a stable rate. AT&T was not just anticipating renewals from such customers, said Cowen analyst Colby Synesael, it was also depending on pricing them up.
DirecTV Now has its perks: HBO, ESPN and more than 40 other live channels, most of which are on demand as well. But while it should be the best of both worlds, customers are abandoning that option as well. The service lost 350,000 subscribers in the last six months and has 1.5 million remaining. “I was impressed by what Disney did,” he said on the earnings call. “I thought it was very instructive.”
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