AT&T’s DirecTV Now adds 200K subs in month 1, misses analyst’s expectations by half

DirecTV Now HBO (AT&T)
Cowan & Company predicted 400,000 new subscribers in DirecTV Now's first month, but AT&T reported only 200,000.

AT&T said its new virtual MVPD service, DirecTV Now, added just over 200,000 subscribers in its first month on the market, missing the expectations of at least one analyst by a full half.

AT&T revealed the number in an 8-K filing with the SEC, ahead of next week’s fourth-quarter earnings report. The company said its services generated “more than 200,000 video net adds, entirely driven by DirecTV Now.”

The revelation came as equity research firm Cowan & Company released a pre-earnings release note to investors that said, “Expect color on the DTV Now launch including subscriber adds in which we assume +400K adds.” 

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RELATED: Comparing DirecTV Now, Sling TV and PlayStation Vue side by virtual side

In recent quarters, the subscriber gains made by the traditional DirecTV Now platform have been all or more than offset by the TV customer declines of AT&T’s U-verse platform. They apparently offset each other evenly in the fourth quarter.

Meanwhile, DirecTV Now’s highly anticipated launch occurred on Nov. 30, making any fourth-quarter metric a benchmark for how the service performed in its first month. 

It’s worth noting that Wall Street doesn’t seem to have a consensus on how the new v-MVPD product should be performing at this point. 

RELATED: DirecTV Now subscriber momentum holding despite tech challenges, UBS analyst says

“We believe this DTV Now sub add is ahead of expectations,” said Wells Fargo’s Jennifer Fritzsche in a note sent out this morning.

On Thursday, Frost & Sullivan analyst Dan Rayburn tweeted that the DirecTV Now service was “peaking” at 35,000 simultaneous users, seemingly a solid metric for a service that’s been on the market for less than two months. 

The subscriber reports follow a tough week for DirecTV Now’s operators, who have endured a steady stream of negative press reports about the service’s technical glitches. 


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