AT&T reported losing nearly one million video subscribers between its DirecTV and DirecTV Now services as the company’s pay TV woes continued in the second quarter.
The company dropped 946,000 video subscribers – 778,000 from its traditional distribution services, DirecTV and U-verse, and another 168,000 from its streaming TV service DirecTV Now. The total was much higher than the 80,000 net video additions reported one year.
AT&T now has 21.58 million traditional video subscribers (down 8.7% year over year) and 1.34 million DirecTV Now subscribers (down 25.9% year over year).
But as video subscribers left AT&T in droves, the company’s video entertainment revenues only dipped slightly, down 1.7% to $8.03 billion. The company’s overall entertainment group revenues fell just 1% year over year and operating income rose 2.6% to approximately $1.5 billion.
AT&T is planning to address its deflating video subscriber numbers by introducing a new “thin client” video service, which the company confirmed will be called AT&T TV. The service is expected to begin trials in the third quarter.
AT&T’s WarnerMedia group is readying its own new subscription streaming service, HBO Max, for launch early in 2020. But for now, the company said that HBO is continuing to drive digital subscriber growth. WarnerMedia’s total operating revenues totaled $8.35 billion during the second quarter. Approximately $3.54 billion of that was subscription revenue, $1.28 billion was advertising revenue and about $3.5 billion came from content licensing and other revenue. Operating income for the segment totaled $1.97 billion.
Xandr, AT&T’s advanced advertising and analytics, reported $485 million in operating revenues during the second quarter, up 23.7% year over year. The segment’s operating income fell 2.4% to $325 million.