AT&T Chief Financial Officer John Stephens told attendees at an investor conference today that the company is “optimistic” that its video losses have peaked.
The company saw a net loss of over 1.7 million video subscribers in the third quarter of 2019, nearly double the 946,000 losses that the company saw in second quarter. The entire pay-TV industry had a difficult third quarter as more people cut the video cord, but AT&T’s losses were the most dramatic, representing 79% of the entire industry’s losses for the quarter.
AT&T Video Losses
According to Stephens, AT&T is now more focused on “long-term value opportunities” for video customers. He contrasted this with the company’s previous strategy of offering introductory prices that had to be increased after two years to cover content costs.
Key drivers for AT&T’s improved video business metrics, Stephens said, will include “the anniversary of this new intake approach to much more rational product offerings” and AT&T TV – the company’s over-the-top video offering that launched several months ago in select markets.
AT&T expects to make AT&T TV its lead video offering moving forward, as the company de-emphasizes satellite-delivered DirecTV and its home-grown U-verse IPTV offering. As Stephens noted, AT&T should gain cost efficiencies as it begins to eliminate the need to roll a truck to install a satellite dish, instead sending a self-installed device to customers using UPS.
He also pointed to opportunities to sell fiber-based broadband to end users as OTT video offerings drive the need for faster broadband. Fiber broadband from AT&T is now available to 14 million locations, but only 4 million of those locations are current subscribers, suggesting considerable upside for AT&T.
It’s worth noting that AT&T may not be able to replace DirecTV with AT&T TV in some areas because the broadband connection may not be fast enough to support both services. It’s also worth noting that at least one financial analyst has questioned whether end customers really see benefits to OTT offerings that essentially are just a new delivery method for traditional pay-TV content.
Nevertheless, Stephens said, “We’re committed to making this work.”
Stephens made his comments at the UBS Global TMT Conference, which was also webcast.
4 thoughts on “CFO: AT&T “Optimistic” That Video Losses Peaked Last Quarter”
AT&T truly rather biased long term value customers are leaving your company in the million of ATT customers per quarter; nearly 2 million ATT customers lost per quarter is not something that is an incredible accomplishment;
but rather something that indicates that one is losing customers because it is doing something drastically wrong with its fundamental business model unfortunately; its time to wake up and smell the reality of ATT rather grim and quite dismal outlook for at least the next eight to ten future earnings quarters till the rest of ATT potential customers have mostly entirely left for greener pastures.
Why is AT&T so absolutely inept at damn near everything? Why is the CEO still allowed to stay? Almost all DirecTV subscribers are mostly in rural areas without adequate broadband. So how exactly do you "see" your subscriber numbers improving or stabilizing? You're effectively cannibalizing your own paying customers with a product nobody even wants or in most cases can even use! I live in suburban Austin, Texas and can't even get better than 50 Mbps with AT&T. It's Spectrum or bust in my area.
I feel your pain. In fact, I was paying for 45 Mbps until last week I realized they actually cut the speed down to 25 Mbps without even notifying me. After 4 hours on the phone trying to figure out why and how I can get anything faster or at 45 again, I was told there was I had no other choice. When I said I;m going to have to consider other options the lady I was speaking with responded with "We respect your decision."
This was 2 days ago. I am now using a new ISP.
Not to worry soon the LEO(low earth orbit) satellites will arrive on the scene to lay complete havoc and chaos on the like of ATT and Comcast rather vulnerable business model in about 30 months when the first wave of LEO's will be turned on to completely cover the earth with not only broadband coverage but also the ability to have widely distributed IPTV services which already is enjoying plus 50 million IPTV active subscribers which is only growing exponentially year over year;
now you do make quite a good exceptional noted comment that in business it would seem that true business incompetence is often rewarded in the real business world; often times its not actually what you know rather its more who one knows;
now often times things in real life will get a whole lot worse before they will eventually get better; the real problem for ATT is that their is no potential bottoming out at the rate of defection of those actually entirely leaving ATT and not coming back;
now making positive sounding business statements such as we only need net profitable ATT customers is patently absurd simply because once one loses those potential customers; they will go to ones potential competitors and definitely will not likely get them back anytime soon at all.
now I used to work for ATT Bell Laboratories and I can tell you definitively they have not learned from their classic business case study mistakes at all and are in fact merely repeating them once again to the potential dismay of business investors to garner as much potential hope and support as possible in a realistic business downward trending business environment; remember always ones trend is ones friend.