AT&T Posts 886,000 Q2 Video/OTT Sub Loss; Broadband Declines Too

AT&T says the bulk of its pay-TV subscriber woes is behind it. The numbers tell a different story. The media giant July 23 said it lost 886,000 video subs in the second quarter (ended June 30), which is a slight improvement from the 897,000 subs lost in the first quarter.

The decline included 68,000 AT&T TV Now online TV subs, about half of the 138,000 subs lost in Q1. The online TV segment ended the quarter with 720,000 subs — down from 1.3 million during the previous-year period. AT&T ended Q2 with 18.4 million video connections compared to 22.9 million on June 30, 2019.

Incoming CEO John Stankey continues to paint a rosy future, saying the company’s “resilient cash” from operations continues to support investments in growth areas, dividend payments and debt retirement.

Follow us on Instagram

“We are aggressively working opportunities to sharpen our focus, transform our operations and continue investing in growth areas, with the customer at the center of everything we do,” Stankey said in a statement.

Regardless, as pay-TV operators continue to lose video subs to alternative channels, including over-the-top video and SVOD, they have rebounded through the growth in high-speed Internet — a prerequisite to broadband video access.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Yet, the telecom said it lost 79,000 broadband subscribers to end the period with about 13.9 million connections. That compared with 14.4 million subs on June 30, 2019. Broadband net losses included 159,000 disconnections where nonpaying subscribers are receiving service under the “Keep Americans Connected Pledge” AT&T rolled out during the ongoing coronavirus pandemic.

AT&T said Entertainment Group revenue (which includes pay-TV units DirecTV and AT&T U-verse and OTT) dropped 11.4% to $10.1 billion, reflecting continuing declines in video subs, legacy services and lower advertising revenue, which were impacted by lower spend attributable to COVID-19.

Revenue declines were partially offset by higher pay-TV and OTT video ARPUs. Entertainment operating expenses totaled $9 billion, down 8.3% versus the second quarter of 2019, largely driven by lower content costs resulting from fewer subscribers, lower marketing costs and ongoing cost initiatives, partially offset by annual content rate increases, higher amortization of fulfillment cost deferrals, including the impacts of second quarter 2020 updates to decrease the expected subscriber lives and pandemic-related bonus payments to front-line employees and contractors.

Leave a Reply

Your email address will not be published. Required fields are marked *

19 − nine =

This site uses Akismet to reduce spam. Learn how your comment data is processed.