As AT&T’s Pay-TV business continues to lose subscribers, its OTT game is looking strong
In the U.S., AT&T’s DirecTV satellite dropped 188,000 subscribers, leaving it with 20.27 million as of the end of the quarter. Meanwhile, AT&T U-verse TV didn’t do much better, remaining virtually unchanged at 3.63 million subs. Despite these gloomy numbers, the company has one thing to look up to — it’s OTT TV service DirecTV Now.
Launched in late 2016, DirecTV Now has grown to serve over 1.4 million subscribers. In Q1 2018, the service added 312,000 customers — 240,000 more subscribers than the prior quarter. With the additional subscribers, DirecTV Now may soon give Dish’s Sling TV, which had 2.2 million subs at the end of Q4 2017, a run for its money.
Not much was mentioned about the telco’s recently announced $15/mo service, AT&T Watch. As 2018 progresses, AT&T “will have a lot of offers in video” CFO John Stephens said on the earnings call. “One of them will be AT&T Watch.” Stephens didn’t go into detail on the new product. “I’ll leave it to the marketing and sales team to come out with details,” he said on the call. However, Stephens said that the introduction of the new streaming product was a testament to AT&T’s willingness to take risks and “innovate” in order to grow the business.
Overall, AT&T was short on meeting analyst projections. The company reported revenue of $38.0 billion, down 3.4% year over year, and adjusted earnings per share of 85 cents — analysts expected the telco to report revenue of $39.3 billion and adjusted earnings of 87 cents per share.