January 30, 2019
Stop the funeral for pay-TV.
AT&T’s signature alternative — broadband-based DirecTV Now — suffered a major blow in the fourth quarter, ended Dec. 31, 2018.
The telecom Jan. 30 reported that the standalone online TV service lost 267,000 subscribers compared to gains of 368,000 subs in the previous-year period. The period included 65,000 free trial subscriptions.
AT&T attributed the decline to ending the service’s $35 monthly promotional pricing.
The tally does not include WatchTV, AT&T’s recent app-based $15 online TV service, which ended the year with 500,000 subscribers.
DirecTV Now ended the year with 1.59 million subs compared to 1.15 million subs at the end of 2017.
The subscriber loss is a shot across the bow for online TV, which launched in 2015 with Dish Network’s Sling TV. Hailed as an antidote to declining pay-TV – and SVOD – online TV offered premium TV channels without long-term contract at a fraction of the price of the traditional cable bundle.
Yet, AT&T’s legacy U-verse pay-TV service added 12,000 subscribers, compared to a loss of 60,000 video subs last year. The distribution channel ended the year with 3.68 million subs compared to 3.63 million at the end of 2017.
The company ended the year with 14.4 million high-speed Internet subscribers, which was up a scant three-tenths of a percent from 14.35 million at the end of 2017.
Meanwhile, satellite service DirecTV lost 403,000 subscribers in the quarter – up 274% from a loss of 147,000 subs in the previous-year period.
El Segundo, Calif.-based DirecTV ended the year with 19.2 million subs – down 6% from 20.4 million subs at the end of 2017.
For AT&T CEO Randall Stephenson, reducing the company’s $183 billion debt load following the $85 billion acquisition of Time Warner is the No. 1 goal in 2019.
“In 2018, we generated record free cash flow while investing at near-record levels,” Stephenson said in a statement. “Our dividend payout as a percent of free cash flow was 46% for the quarter and 60% for the year, allowing us to increase the dividend for the 35th consecutive year. This momentum will carry us into 2019 allowing us to continue reducing our debt while investing in the business and continuing our strong record for paying dividends.