As AT&T readies HBO Max and AT&T TV for launch next year amid freefalling video subscriber totals, the company is continuing to discuss its shifting video strategy.
AT&T CFO John Stephens, speaking today at the Wells Fargo TMT Conference, said that his company’s ultimate plan to provide long-term value for consumers.
“Having customers lock in for prices for two years and then having to raise them to cover content cost increases, that’s something we’re getting out of,” Stephens said.
AT&T has seen dramatic video subscriber losses on a quarterly basis for several months now and many of those losses are happening at the company’s beleaguered satellite business, DirecTV. During the third quarter the company lost approximately 1.16 million premium video subscribers between DirecTV and U-verse. Much of that is stemming from AT&T “cleaning up” its customer base, and moving subscribers off promotional pricing.
Moving forward, Stephens said that AT&T is pushing more focused promotions that he said will give consumers a more transparent view of the cost to quality relationship.
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“That transition we’re going through is tough, and we’ll continue to go through it for the rest of this year. But we’re optimistic that we’ve hit the peak of losses in the third quarter, and we’re looking for AT&T TV and the anniversary of this new intake approach to much more rational product offerings, to really help us going forward,” Stephens said.
AT&T TV is currently being beta tested in about 15 U.S. markets, according to Stephens, and it will launch nationwide early next year. It’s a streaming TV service that will drive down the cost of customer acquisition for AT&T by requiring only a self-installed Android TV box for service instead of a satellite dish installed by a technician.
HBO Max is launching in May 2020 priced at $14.99, the same price as HBO Now. The company wants to have 50 million domestic subscribers and 75-90 million premium subscribers by year-end in 2025 across the U.S., Latin America and Europe.