AT&T loses 233K video subs in Q1 as U-verse continues cratering and DirecTV flatlines

DirecTV dish
AT&T added 242,000 IP broadband users in the first quarter, but those gains were mitigated by losses of DSL users and the company ended up with a net of 115,000 new high-speed internet users.

AT&T reported continued blood loss for its fading legacy pay-TV platform in the first quarter, with U-verse dropping another 233,000 video customers.

But this time, the somewhat recently acquired DirecTV satellite platform wasn’t able to pick up the slack, with the service holding flat sequentially at 21.01 million domestic subscribers. The neutral growth for DirecTV compared to expansion of 328,000 users in the first quarter of 2016.

U-verse TV, meanwhile, has seen its base shrink by 23% over the last 12 months and now has just 4.02 million users. The further U-verse TV shrinkage follows a report last week by fellow telco pay-TV operator Verizon, which indicated that FiOS (minus 13,000 users in the first quarter) is now in decline on the video side, as well.

FREE DAILY NEWSLETTER

Like this story? Subscribe to FierceVideo!

The Video industry is an ever-changing world where big ideas come along daily. Cable, Media and Entertainment, Telco, and Tech companies rely on FierceVideo for the latest news, trends, and analysis on video creation and distribution, OTT delivery technologies, content licensing, and advertising strategies. Sign up today to get news and updates delivered to your inbox and read on the go.

AT&T didn’t report figures for newly launched virtual MVPD service DirecTV Now. It’s unclear how much the IP-based platform grew in Q1 vs. how much the linear satellite service lost. In the morning earnings call with investors, AT&T CEO Randall Stephenson conceded that DirecTV Now is cannibalizing DirecTV to some extent, but he called the impact “nominal.”

RELATED: Verizon loses 13K Fios video subcribers in Q1 as telco pay-TV business faces the abyss

AT&T added 242,000 IP broadband users in the first quarter, but those gains were mitigated by losses of DSL users and the company ended up with a net of 115,000 new high-speed internet users.

Jefferies analyst Mike McCormack said the broadband gains exceeded his expectations, but the pay-TV losses were far above the 35,000 he had in mind.

“Satellite subscribers (including DirecTV Now) were flat, despite adding an average of nearly 300,000 in the prior five quarters,” McCormack said to investors in a morning note. 

“Management attributed the result to higher churn from standalone video customers following price increases, though the entrance of a YouTube OTT service also bears monitoring,” he added.