AT&T lost nearly 1.2M linear pay TV customers in 2017

DirecTV dish
Image: DirecTV

AT&T continues to see the migration of its pay TV base to its DirecTV Now virtual platform, with 368,000 customers joining the vMVPD in the fourth quarter. 

DirecTV satellite and U-verse TV, meanwhile, combined to lose 207,000 U.S. customers. For all of 2017, the two platforms combined to lose 1.159 million customers. And 13 months after launching DirecTV Now, the telecom conglomerate said it has around 1.2 million vMVPD subs. 

“We would expect to continue grow video customers with our DirecTV Now outpacing our linear customer counts in the sense of net additions. So, we do expect that,” said AT&T CEO Randall Stephenson, speaking to investment analysts during AT&T’s fourth-quarter call Wednesday. 

RELATED: DirecTV satellite losses hit 250K in Q4, analyst believes

AT&T believes the churn rate for its wireless customers is nearly half for those who also have DirecTV Now. It also believes in its potential develop advanced advertising revenue over the next few years to better monetize its virtual pay TV platform. But for now, the service remains a loss leader, one that investment analysts aren’t so bullish about.

“That the company continues to grow its base of DirecTV Now subscribers isn’t helpful—AT&T loses money on them,” said MoffettNathanson analyst Craig Moffett, in a note to investors after AT&T’s call.  

“What matters is that their satellite subscribers are leaving,” Moffett added.
Whether they can stop the declines of high-value legacy satellite subscribers, whey they ultimately make all (or more than all) of their profits, will be critical to the company’s fortunes going forward.”

RELATED: AT&T notches 329K postpaid phone net adds in Q4, touts wireless/video bundles

As AT&T grapples with the new economics of IP-delivered skinny bundles, it shed some light Wednesday on the revised interface that will soon package not only DirecTV Now, but all of its multiscreen delivery.

The company now says it will debut the new DirecTV Now technology platform in the spring. 

For a full rundown of AT&T’s Q4 financials, read this FierceWireless story.