DirecTV's Death Spiral Continues on as Hundreds of Thousands Cancel
The cord cutting continues as AT&T continues to ramp up its HBO streaming service.
AT&T released its earnings for the fourth quarter on Wednesday, and the company said that it lost another 617,000 video subscribers, to DirecTV and its other services. The company described the loss as “the result of lower churn and higher quality base.”
The company had lost 590,000 subscribers in the previous quarter. The losses are actually less than they were in the first half of 2020, as the company lost 897,000 subscribers in the first quarter of 2020, and 886,000 in the second quarter.
And on Wednesday, AT&T booked a $15.5 billion charge on its business unit that includes DirecTV, the Wall Street Journal said. The Journal described that as “reflecting the damage cord-cutting has taken on its DirecTV satellite unit even as the company’s HBO Max streaming service’s growth ramped up.”
The announcement came as AT&T posted revenue of $45.7 billion in the fourth quarter a 2.4 percent decline over the same time last year, as “pandemic impacted revenues across most businesses, particularly WarnerMedia and domestic wireless service,” the company said.
AT&T posted a loss of $13.89 billion in the fourth quarter, which largely reflected the charge on the video business. The company had posted a profit of $2.39 billion in the fourth quarter of 2019.
AT&T’s video business is composed of DirecTV, U-Verse and AT&T TV. Another service, AT&T TV Now, was discontinued last month. The company has been widely reported to be attempting to sell off stake in DirecTV, with the most recent reports listing TPG as the leading contender to purchase that stake.
In the fourth quarter, AT&T also added 273,000 AT&T Fiber subscribers, bringing the total additions for the year to over one million.
The company also said that its streaming service HBO Max had reached forty-one million subscribers, following the announcement that AT&T-owned WarnerMedia was putting its entire 2021 slate of movies on HBO Max, in addition to theatrical releases. The service has also reached sixty-one million subscribers worldwide.
“We ended the year with strong momentum in our market focus areas of broadband connectivity and software-based entertainment,” John Stankey, AT&T’s CEO, said in the release.
“By investing in our high-quality wireless customer base, we had our best full-year of postpaid phone net adds in a decade and our second lowest postpaid phone churn ever. Our fiber broadband net adds passed the 1 million mark for the year. And the release of Wonder Woman 1984 helped drive our domestic HBO Max and HBO subscribers to more than 41 million, a full two years faster than our initial forecast.”
Stephen Silver, a technology writer for The National Interest, is a journalist, essayist and film critic, who is also a contributor to 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.