HBO Max can’t come soon enough for AT&T.
The telecom giant Oct. 28 said it lost 1.16 million pay-TV subscribers in the third quarter (ended Sept. 30). It lost an additional 195,000 AT&T TV Now (formerly DirecTV Now) subs.
The losses compared with 346,000 pay-TV subs jettisoned and 49,000 DirecTV Now subs added in the previous-year period.
The company attributed the losses to customers rolling off promotional discounts, programmer disputes and competition, as well as lower gross adds due to the continued focus on adding higher-value subscribers.
In the past 12 months AT&T has lost more than 3.2 million pay-TV subs as subscribers migrate toward alternative video services, including over-the-top. It ended the period with 20.4 million combined DirecTV and U-verse subs compared to 23.3 million a year ago.
AT&T TV Now has lost 713,000 subs since launching Nov. 30, 2016, as a $34.99 monthly standalone online TV service. It ended the period with 1.14 million subs compared to 1.85 million last year.
Unlike other pay-TV distributors, AT&T is not supplanting linear TV subs with high-speed Internet. The company lost 83,000 broadband subs compared to a net addition of 31,000 subs last year. It lost 36,000 DSL subs, an improvement from a loss of 45,000 subs in the previous-year period.
AT&T did add 318,000 high-speed fiber subscribers.
AT&T ended the period with 14.3 million broadband subs, down from 14.4 million a year ago.
“The strategic investments we’ve made over the last several years have given us the essential elements to meet growing demand for content and connectivity,” Randall Stephenson, AT&T chairman and CEO, said in a statement.
Stephenson remain upbeat on the company’s future saying the three-year plan delivers both “substantial and consistent” financial improvements over the next three years.
“We grow revenues, [pre-tax earnings] every single year, and free cash flow is stable next year, but then grows in both of the next two years, as well,” he said. “And all of this is inclusive of our investment in HBO Max.”