August 27, 2019
John Donovan, CEO of AT&T’s communications segment, which includes wireless and troubled DirecTV and DirecTV Now, has announced he is retiring on Oct. 1.
AT&T has not named a successor, although media reports suggest Lori Lee, CEO of AT&T’s Latin America operations and global marketing officer, could assume Donovan’s position and become the telecom’s most senior female executive.
The 58-year-old Donovan, who has been with AT&T since 2008, helped spearhead the telecom’s $48.5 billion acquisition of satellite TV operator DirecTV in 2014.
With that service now projected to lose about 2 million subscribers annually to alternative distribution services such as SVOD and online TV, AT&T is struggling to reshape a traditional pay-TV distribution business in the rapidly changing over-the-top video ecosystem.
And simply launching online platform DirecTV Now hasn’t been the answer. The service continues to lose subscribers who signed up for the initial loss-leading $34.99 monthly fee. That fee has been upgraded to $39.99.
Last month AT&T said it was changing the service’s name to AT&T Now. Subsidiary WarnerMedia is launching HBO Max early next year, while continuing to operate HBO Now in its current form in the interim.
Indeed, consumer choice for accessing home entertainment continues to evolve — driven in large part by the actions of Netflix, Amazon Prime Video and Disney-owned Hulu.
Craig Moffett, an analyst for research firm MoffettNathanson, lauded Donovan’s telecommunications contributions to AT&T, while tempering praise with market realities in the overall home entertainment market.
“It’s the entertainment businesses that are the problem,” Moffett told The Wall Street Journal.