AT&T Loses Another 1 Million TV Customers As Cord Cutting (And Greed) Take A Toll
from the not-the-sort-of-death-star-we-planned dept
2019 saw a record number of consumers ditch traditional cable television. 2020 was already poised to be even worse, and that was before a pandemic came to town. The pandemic not only sidelined live sports (one of the last reasons many subscribe to traditional cable in the first place), it put an additional strain on many folks’ wallets, resulting cord cutting spiking even higher.
Among the hardest hit continues to be AT&T, whose customers have been fleeing hand over fist even with AT&T’s attempt to pivot to streaming video. According to AT&T’s latest earnings report, the company lost yet another 954,000 pay TV subscribers — 886,000 from the company’s traditional DirecTV and IPTV television offerings, and another 68,000 customers from the company’s creatively named AT&T TV Now streaming video platform. All told, the losses left AT&T with 18.4 million video customers, including both Premium TV and AT&T TV Now, down from nearly 25.5 million in mid-2018.
That’s a fairly amazing face plant for a company that spent more than $150 billion on megamergers (DirecTV in 2015, Time Warner in 2018) in a bid to dominate the pay TV sector. The problem is the deals saddled AT&T with an absolute mountain of debt, which the company then attempted to extract from its customers in the form of relentless price hikes. During an economic crisis and pandemic:
“Higher prices helped drive the customer losses. As it has in past quarters, AT&T said its practice of giving out fewer promotional-pricing deals contributed to the customer losses for AT&T TV Now. AT&T said the Premium TV loss was “due to competition as well as lower gross adds from the continued focus on adding higher-value customers.”
While AT&T executives are trying to pretend this was all part of some master strategy to only retain higher-revenue subscribers, this is absolutely not the sort of sector domination company executives originally envisioned. The entire point of releasing a cheaper streaming TV service is to lure cost-conscious customers fleeing traditional cable. Raising rates relentlessly sort of defeats that purpose. The company also managed to shoot itself in the foot with such a bizarre array of discordant TV brand offerings, it, at one point, managed to confuse the company’s own employees.
Even AT&T’s investors (who usually adore megamergers) balked at the company’s spending spree and sloppy execution, and for months rumors have indicated that AT&T could wind up selling DirecTV for a pittance. Overall, just another day for a telecom and media sector that’s utterly obsessed with mindless merger mania and growth for growth’s sake, even when it makes absolutely no sense.