AT&T lost another 954,000 premium and streaming TV subscribers in the second quarter but credited its new AT&T TV service with helping to offset the continued losses.
AT&T posted a net loss of 886,000 premium TV (DirecTV, U-verse) subscribers and a net loss of 68,000 AT&T TV Now subscribers. The company ended the quarter with 17.69 million premium pay TV subscribers and 720,000 AT&T TV Now subscribers.
AT&T has now lost nearly 2 million total video subscribers through the first half of the year – compared to 1.57 million through the first half of 2019. The company said its video subscribers have been impacted by COVID-19 and its marketing focus on a high-value customer base.
AT&T reported “solid” video and IP broadband ARPU (average revenue per user) gains but overall entertainment group revenues fell 11.4% to approximately $10 billion. Video revenues fell 13.2% while high-speed internet revenues dropped slightly. Operating income for the second quarter dropped 32% to approximately $1 billion.
AT&T’s WarnerMedia segment touted the rollout of HBO Max during the second quarter and said that HBO added 1.7 million new subscribers through the first half of 2020, which helped it reach 36.3 million total subscribers and meet its target for the year.
AT&T expects HBO Max 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.
Even with the high-profile HBO Max launch, WarnerMedia segment revenues fell 22.9% to $6.8 billion as Turner, HBO and WarnerMedia all experienced COVID-19 impacts. Total operating income for WarnerMedia fell 16.6% to $1.9 billion.
“Our solid execution and focus in a challenging environment delivered significant progress in the quarter, most notably the successful launch of HBO Max, resilient free cash flow and a strengthened balance sheet,” said AT&T CEO John Stankey in a statement. “Our resilient cash from operations continues to support investments in growth areas, dividend payments and debt retirement. We are aggressively working opportunities to sharpen our focus, transform our operations and continue investing in growth areas, with the customer at the center of everything we do.”