AT&T, earlier this year, finally sold off a stake in DirecTV, reaching a deal with private equity giant TPG to spin off DirecTV into a separate entity, in which AT&T will continue to own 70 percent of the satellite service.
But that deal hasn’t been completed yet, so AT&T still owns DirecTV for now. And it lost a huge amount of subscribers, once again, in the first quarter of the year.
According to the company’s earnings report, the company lost 620,000 premium video subscribers in the first quarter, across DirecTV, AT&T U-Verse and AT&T TV. The company had lost 897,000 in the same quarter the year before, although that was the month that the coronavirus pandemic began and all pay TV services had huge losses.
In the same quarter, AT&T announced that HBO Max had a big quarter, adding 2.7 million net subscribers.
“HBO Max continues to deliver strong subscriber gains, fueled by the success of our day-and-date theatrical strategy and our steadily strengthening post-COVID content slate. In the U.S., we’ve added more than 11 million domestic HBO Max and HBO subscribers in the last 12 months,” the company’s CEO, John Stankey, said in the earnings call, per AT&T’s transcript.
“We continued to excel in growing customer relationships in our market focus areas of mobility, fiber and HBO Max,” Stankey added. “We also continue to increase penetration in markets where we offer fiber broadband and we’re moving quickly to deploy more fiber. HBO Max continued to deliver strong subscriber and revenue growth in advance of our international and AVOD launches planned for June.”
AT&T announced the controversial decision in late 2020 to put the entire 2021 Warner Brothers movie slate on HBO Max, with the same release date as the movies will arrive in theaters. One of those films, “Godzilla vs. Kong,” became the first big theatrical hit of the pandemic era when it was released in March.
The DirecTV deal, the product of months of talks, was reached in late February, and entailed TPG paying $16.25 billion for a 30 percent stake in the new entity, known as “New DirecTV.”
“As the pay-TV industry continues to evolve, forming a new entity with TPG to operate the U.S. video business separately provides the flexibility and dedicated management focus needed to continue meeting the needs of a high-quality customer base and managing the business for profitability,” AT&T said at the time the deal was announced. “TPG is the right partner for this transaction and creating a new entity is the right way to structure and manage the video business for optimum value creation.”
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to The Philadelphia Inquirer, Philly Voice, Philadelphia Weekly, the Jewish Telegraphic Agency, Living Life Fearless, Backstage magazine, Broad Street Review and Splice Today. The co-founder of the Philadelphia Film Critics Circle, Stephen lives in suburban Philadelphia with his wife and two sons. Follow him on Twitter at @StephenSilver.