DIRECTV NOW's Fall From Grace Continues With More Subscriber Losses

Advertisement
Advertisement

DIRECTV NOW is continuing to hemorrhage subscribers at an alarming rate.

AT&T today released its earnings results for the second quarter of 2019 and as part of that release confirmed its DIRECTV NOW video service saw a loss of 168,000 subscribers during the quarter.

This follows on from the 83,000 that left the service in the previous quarter and the 267,000 in the quarter before that.

Advertisement

Overall, this has resulted in a loss of 518,000 subscribers since the start of the fourth quarter of 2018, bringing the total number of existing subscribers now to 1.3 million.

Before DIRECTV NOW started seeing these losses the service was regularly adding subs and on track to hit the two-million subscriber mark in due course. This also positioned the service in the second spot in the live TV streaming rankings behind Sling TV.

However, after three consecutive months where the service has continually lost subscribers, it now remains to be seen what position DIRECTV NOW ranks in. Over the same period Hulu with Live TV and YouTube TV have continually gained new users and while it had been expected Hulu's service has already overtaken DIRECTV NOW, it now seems likely that YouTube TV may have as well.

Advertisement

Of course, a lot has happened during the last few quarters, playing its part in these losses. For one thing, DIRECTV NOW redefined the service which massively impacted on the value on offer. For example, not only did AT&T increase the price of its DIRECTV NOW plans, but at the same time decreased the number of channels offered. Put simply, subscribers were expected to pay more for access to less channels than before.

Adding to the situation, over the past few months AT&T has made it abundantly clear that it is less concerned with DIRECTV NOW subscribers than it should be. The company not only declared that DIRECTV NOW is no longer seen as a priority by AT&T and WarnerMedia, but also voiced how it does not care that these subscribers are leaving.

In fact, AT&T previously argued that the losses the service is encountering is actually intentional as it looks to 'clean up' the service on all fronts. This was explained as not only trimming low-quality content from the service (hence the culling of the channels), but also trimming the number of low-quality subscribers.

Advertisement

Up until 2019, AT&T was very aggressive when it came to DIRECTV NOW pricing and at one point was selling subscriptions for just $35 per month along with the promise that price would be locked in for life. AT&T did not honor that promise and it is those customers who are on the lower monthly rate that the company is now happy to see leave.

It should be pointed out that the quarter was not only bad for DIRECTV NOW, but bad for AT&T's video services in general considering the quarter resulted in an overall video subscriber loss of 778,000.

This coupled with the 544,000 subscribers that departed in the previous quarter means AT&T has lost over one million video subs in the last six months alone.

Advertisement

If this trend continues then by the end of the next quarter services like DIRECTV NOW will have seen continued subscriber losses for a full year.

This seems likely to happen as in addition to the channel losses subscribers were forced to deal with through the readjustment of the DIRECTV NOW plans, DIRECTV subscribers have also recently lost access to local channels owned by Nexstar as well as CBS-owned channels due to a breakdown in licensing agreements.