directv nowIn an 8-K filing with the SEC, AT&T revealed total DIRECTV NOW subscribers drove 200K net adds to their video portfolio, as of the end of 2016. The filing highlights an expected quarterly loss of $1 billion for AT&T, driven primarily by pension and benefits costs, according to the company.

AT&T put significant emphasis on DIRECT TV NOW and the 200K subscriber number, but it’s difficult to determine total DIRECTV NOW subscribers accurately, since that 200K net add number also includes DIRECTV DBS and U-verse TV subscriber movements.

AT&T reported a total 3K net loss in video subscribers for 3Q16, before DIRECTV NOW was available. So an educated guess, based on the 8K filing, probably puts total DIRECTV NOW subscribers somewhere in the range of 180K to 220K. We may get more clarity on this January 25th, when AT&T releases it full quarterly financial results.

directv now channel line-up
AT&T DIRECTV NOW Channel Line-up (Source AT&T)

AT&T made a distinction for the total DIRECTV NOW subscribers count, stating these were paid subscribers. The report did not reveal which tier these paying customers subscribe to. AT&T DIRECTV NOW pricing starts at $35/month and can rise to $70 or more, depending on the package and features.

There are conflicting reports regarding the success of DIRECTV NOW. AT&T says they are pleased with the launch and call it successful, given its scale and complexity. But the Internet and social media echo chamber has captured frustrations with the performance of the OTT service.

Regardless, DIRECTV NOW and its competitors like Sling TV illustrate an important trend for traditional pay-TV providers. They are embracing OTT delivery of a traditional linear pay-TV package, and indications suggest we’re just at the beginning of this trend. ABI Research just published a report saying linear OTT packages like DIRECTV NOW and Sling TV will drive revenue growth from $1 billion today to $7 billion by 2021.

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