Despite deep price cuts to its linear and virtual DirecTV services, AT&T said it ended up losing around 90,000 subscribers in the third quarter.
This caused MoffettNathanson analyst Craig Moffett to question why AT&T was so “irrationally promotional” in the first place.
“Much has been made of AT&T’s $10 offers for DirecTV Now, their giveaways of HBO, and their promotional pricing of DirecTV satellite service for as little as $25 a month,” Moffett wrote in a note to investors this morning.
“But it is now clear that none of that promotionality [sic] really helped that much. At best, AT&T’s satellite offers may have slowed the erosion of DirecTV from what otherwise would have been even worse. This is about industry growth rates, not market share.”
In an 8-K filing to the SEC last week, AT&T pegged its losses across linear platforms at around 390,000 during Q3. It also said it gained 300,000 DirecTV Now users during the period.
With AT&T pulling the Band-Aid off early on the bad Q3 subscriber news for its linear satellite platform, many telecom eyes are turning to rival satellite operator Dish Network. Dish hasn’t announced a call date for its Q3 earnings, but analysts suspect another tough quarter in Englewood, Colorado.
“We believe the prospects for the satellite operators are distinctly unattractive,” Moffett added. “Without a broadband component, to offset pressures in video, Dish Network and AT&T’s DirecTV will continue not only to lose share to OTT video, but also to lose share to cable, and they will see increasing pressure on ARPUT as well.”