AT&T TV Subs Decline in Q4, Despite Strong DirecTV U.S. Gains

[goaliebob99]

From Variety:
http://variety.com/2016/biz/news/att-q4-2015-directv-subscribers-decline-1201689189/

AT&T’s DirecTV unit added 214,000 U.S. subscribers in the fourth quarter of 2015 — but that wasn’t enough to offset the decline in the telco’s U-verse TV business, which dropped by 240,000 subs in the period.

Still, revenue for AT&T’s video entertainment business jumped 29% sequentially, to $9.25 billion. The company ended 2015 with 25.4 million total TV customers, comprising 19.78 million for DirecTV and 5.61 million for U-verse. It was the first full quarter AT&T included DirecTV in its results; the telco completed the DirecTV deal in July 2015.

“Our DirecTV integration is going well, and the customer response to our new integrated mobile and entertainment offers is strong,” AT&T chief Randall Stephenson said in announcing the results. He cited the company’s launch earlier this month of an unlimited data option for wireless customers with either DirecTV or U-verse video, and added that the company in 2016 plans to launch “a variety of new video entertainment packages that give customers even more choices” with the first to debut within the next 45 days.

The telco is developing new “mobile-centric” video services in conjunction with Otter Media, AT&T’s joint venture with Chernin Group, Stephenson said. Otter Media owns multichannel network Fullscreen, which is preparing to launch a subscription-video service, he noted.

The AT&T Mobility wireless business added a net 2.8 million customers in Q4, to end the year with 128.64 million. Revenue for the segment declined 4.9% year over year, to $18.89 billion, on lower service and equipment sales; AT&T Mobility’s operating income climbed 22% to $4.38 billion.

Total revenue for the fourth quarter was $42.12 billion, slightly below Wall Street expectations of $42.72 billion. Net income for the period totaled $4.0 billion, or 65 cents per share; adjusted EPS of 63 cents was in line with analyst projections.

The company continues to expect to achieve $2.5 billion in annual cost synergies by 2018 from the DirecTV takeover, Stephenson said on the earnings call Tuesday.

AT&T’s overall monthly revenue per TV subscriber increased to $120.59, up from $102.66 in Q4 2014 (prior to the DirecTV acquisition).

I am glad to see the strong sub growth given the cord cutter enviroment we live in. Hopefully 4k will help to bring in more subs and grow revenue. The bundling options are certainly helping and I see this being sustained when the new IRD of the future is finally released in the next few years. ATT has a solid plan lets see how it is executed. Hopefully we can finally fill in the gaps in the HD packages to include Epix HD and Pac12HD.

 

[jcrandall]

I think this sums it up pretty nicely:
DirecTV added 214,000 U.S. subscribers in the fourth quarter of 2015 — but that wasn’t enough to offset the decline in the telco’s U-verse TV business, which dropped by 240,000 subs in the period.

 

[Jimbo]

I think this sums it up pretty nicely:
DirecTV added 214,000 U.S. subscribers in the fourth quarter of 2015 — but that wasn’t enough to offset the decline in the telco’s U-verse TV business, which dropped by 240,000 subs in the period.

A lot of that is due to the Push ATT has made to move people to D*.

 

[CSM]

Does this sound like they are going to shut UVerseTV down? If AT&T is not making money off of it would it be profitable for them to just let customers with LOS issues and those who wouldn't want a dish on the roof and who like UVerseTV keep it? It also sounds like their plan is to get as many customers off of UVerseTV to free up Internet bandwidth.

 

[KungFu Panda]

ATT is strongly pushing customers over to DTV even to the point that they practically dont offer it anymore through normal sales channels. You have to ask for it otherwise they are going to give you DTV. If a tech come out to do a DTV install but cant install for whatever reason they can switch you to Uverse on the job but it will cost more monthly. $25 for the last customer that I know of. ATT is pushing DTV so that they can free up bandwidth for Internet. If a customer has 4 connected TV's, Uverse has to provide enough bandwidth to the Gateway so that all 4 Tv's can work simultaneously. Thats anywhere from 25mb to 55mb depending on subscribed internet speed as well. Most customers dont watch all the Tv's at once so it's a huge waste on bandwidth allocation.

 

[KungFu Panda]

Does this sound like they are going to shut UVerseTV down? If AT&T is not making money off of it would it be profitable for them to just let customers with LOS issues and those who wouldn't want a dish on the roof and who like UVerseTV keep it? It also sounds like their plan is to get as many customers off of UVerseTV to free up Internet bandwidth.

They probably wont shut them down for the reason you just mentioned. They will keep it as a back up. Usually the customer is getting internet anyways and as long as the signal is from the VRAD then there isn't a whole lot more work to do after the Gateway is up to provide the video service since all the stb's connect to the gateway.

 

[Troch77]

That is a Good Number for Directv.
I Wonder though if that is Uverse customers that may have switched to Directv that may have brought the Directv number up.

 

[fsds]

Couple of days ago I called to cancel my home phone which is a waste of money and one of their pitches was to get me to go to DirecTV and also getting me to switch from Verizon wireless to AT&T wireless. I have had a lot of problems with Uverse TV they have made a major effort to correct my problems but still having dropout problems. Going back to Dish the end of February because I do not want DirecTV even with their great bundle offer. I will keep the internet service for now but that is it for Uverse.