Stankey: HBO Max, AT&T TV Now Merger Possible

With WarnerMedia staking much of its future on over-the-top video and digital distribution, the May 27 launch of subscription streaming platform HBO Max could eventually spearhead a unified OTT product offering with digital TV service AT&T TV Now, a senior executive told a virtual investor event.

Speaking May 13 remotely on the JP Morgan Technology, Media and Communications confab, John Stankey, who is set to replace AT&T CEO Randall Stephenson in July, said the two software-based platforms would ideally become linked in the future. The move mirrors WarnerMedia melding existing HBO Now and HBO Go subscribers into Max.

“You want a platform that can distribute both [services],” Stankey said. “So AT&T being software driven, HBO Max being software driven, user interface capabilities, bundling, price start to move together. I think we’re at a very natural place to see that begin to occur and our TV business and our SVOD business start to become one as we get out over the next couple of years.”

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Indeed, distribution is key to Max (and AT&T TV Now) surviving in the crowding OTT universe. The latter has already gone through two name changes from DirecTV Now, which saw initial consumer interest plummet following pricing changes.

Max is launching without an assist from Amazon Fire TV. Recent data contends Roku has 51% of the streaming media device market in the U.S., and about 30% of the streaming stick market. By comparison, Fire TV has less than 30% of the U.S. streaming device market, but 57% of the streaming stick market.

It also remains unclear whether the $14.99 Max will be offered on Amazon Channels — the e-commerce behemoth’s shrewd platform offering third-party SVOD service to more than 100 million Prime members. Notably, Amazon Channels was credited with driving subscriber growth to HBO Now following its 2015 launch. But in exchange for the landing on Channels, Amazon reportedly extracts significant compensation from services, in addition to keeping user data.

Regardless, myriad services such Starz OTT, BritBox, Acorn TV, Showtime OTT, CBSN and Epix market themselves on Channels.

Global Pay-TV to Add 35 Million Subs by 2025 — Driven by Online TV

Pay-TV consumption in the United States is declining, but globally, there’s still life in the distribution channel — thanks to online TV.

New data from London-based Digital TV Research suggests there will be 35 million new pay-TV subs through 2025, with the global base reaching 1.06 billion across more than 138 countries.

Driving growth is online TV, which includes platforms such as Sling TV, Hulu with Live TV, AT&T TV Now and YouTube TV in the United States. IPTV will add 84 million subs through 2025, topping 391 million. Online TV will grow its global market share in pay-TV from 30% in 2019 to 37% in 2025.

Satellite TV, which is projected to lose another 4 million subs through 2025, will generate 20% of pay-TV subs, down from 21% in 2019.
Cable will decline 7%, accounting for 40% of all pay-TV subs by 2025 — a near 50% drop from 74% market share in 2010. There will be 430 million cable TV subs (both analog and digital) by 2025, 101 million fewer than in 2010.

“Our forecasts are based on the assumption that professional sports will restart in August following relaxations in the COVID-19 lockdown,” analyst Simon Murray said in a statement. “If this does not happen, then pay-TV will experience considerable churn.”

AT&T Lost 3.4 Million Pay-TV Subs in 2019

The pay-TV subscriber drain is no longer a drip. It’s a bursting dam.

AT&T Jan. 29 announced it lost more than 3.4 million linear TV subscribers in 2019, including 945,000 subs in the fourth quarter, ended Dec . 31. That compared with sub losses of 1.2 million and 391,000, respectively, in the previous-year periods.

Pay-TV, which includes DirecTV and AT&T U-verse, ended the year with 19.4 million subs — down 15.3% from 22.9 million at the end of 2018.

Follow us on Instagram

More disconcerting is that AT&T’s much publicized foray into over-the-top video distribution isn’t resonating with consumers. AT&T Now TV, the brand name replacement for DirecTV Now, shed 665,000 subs last year, up 52% from a loss of 436,000 subs in 2018.

The online TV drop-off abated somewhat in Q4 to 219,000 subs, an improvement from 267,000 subs lost in the previous-year period. AT&T ended the year with 926,000 TV Now subs, a 42% decline from 1.6 million subs at the end of 2018.

And unlike rival Comcast supplanting pay-TV subs with high-speed Internet, AT&T actually lost broadband subs in 2019. That included a 1% decline in broadband and 23% drop in DSL. The telecom ended the year with 14.1 million high-speed Internet subs compared to 14.4 million in 2018.

With AT&T’s WarnerMedia readying the launch of HBO Max and rebranded (again) AT&T TV, CEO Randall Stephenson remains upbeat.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

“We delivered what we promised in 2019 and we begin this year with strong momentum in wireless, with HBO Max set to launch in May and our share retirement plan well underway,” Stephenson said in a statement. “Our 2020 outlook positions us to deliver meaningful progress on our 3-year financial and capital allocation plans as we continue to invest in growth opportunities and create value for our owners, as we did last year.”

 

AT&T TV Streaming Service Launching in February 2020

AT&T’s complicated path to online television distribution is getting a little clearer. The telecom giant plans to roll out a branded service called AT&T TV next February, according to Jeffery McElfresh, CEO of AT&T Communications.

Speaking Dec. 12 at Barclays Global Technology, Media and Telecommunications Conference in San Francisco, McElfresh said 2019 was the high point for pay-TV subscriber losses, which included DirecTV, AT&T U-verse, AT&T Watch and AT&T TV Now (formerly DirecTV Now).

AT&T Communications CEO Jeffrey McElfresh

The telecom’s pay-TV and OTT sub losses in 2019 have been staggering. AT&T lost 1.4 million AT&T TV subs in Q3, not including 195,000 OTT. The company lost 950,000 pay-TV subs in Q2, excluding 168,000 DirecTV Now subs. It lost another 544,000 subs in Q1, on top of 85,000 OTT.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Indeed, the DirecTV Now losses, which have been troubling in light of the marketing and company push toward OTT distribution around a known satellite brand, prompted a branding change to AT&T TV Now.

“As you think about the subscriber volumes of our legacy business, we will improve the performance of that,” McElfresh said without elaborating. “But our growth agenda is on 5G [which just bowed in 10 cities], our entertainment group and on AT&T TV that will be offered nationwide.”

He said the lower capital expenditures involved in OTT distribution and technological improvements would help AT&T TV reach the finish line.

The odds are not in the telecom’s favor. Since launching in 2015 with Sling TV and Sony PlayStation Vued, the online TV business has been considered an antidote to SVOD and savior for legacy pay-TV. But consumer interest has stagnated.

Follow us on Instagram

Sling remains the market leader with about 2.6 million subs. But DirecTV Now, which reached 1.5 million subs through loss-leader pricing, saw subs drop the service following a price hike. And shuttering PlayStation Vue never gained much traction beyond 500,000 subs.

“We’ll grow … in our pay-TV business with AT&T TV, coupled with a focus on our fiber broadband footprint driving incremental penetration,” McElfresh said. “And that’s how we balance out our entertainment group’s performance in 2020 and beyond.”

Sling TV Offsets Q3 Dish Subscriber Losses

Sling TV is back.

Dish Network Nov. 7 said it added 214,000 Sling subscribers in the third quarter, ended Sept. 30. That compared to a gain of 26,000 Sling subs in the previous-year period. Sling ended the period with 2.69 million subs, up 13.5% from 2.37 million subs at the same time last year.

Launched in 2015 as the first standalone online TV service, Sling helped create a market that now includes YouTube TV, AT&T TV Now, Philo TV and Fubo TV, among others.

Meanwhile, the legacy Dish satellite TV service continued to shrink, losing 66,000 subs in the period, a significant improvement from 367,000 subs lost last year. Dish ended the period with 9.49 million Dish subs, down from 10.28 million subs at the same time last year.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Net pay-TV subs increased approximately 148,000 subs in the third quarter, compared to a decline of approximately 341,000 subs in the third quarter of 2018. To mitigate pay-TV sub losses, Dish unveiled a Flex Pack skinny bundle consisting of more than 50 channels and the choice of one of 10 themed add-on channel packs, which include, among others, local broadcast networks and kids and general entertainment programming.

“While we plan to implement these and other new marketing efforts for our Dish TV services, there can be no assurance that we will ultimately be successful in increasing our gross new Dish TV subscriber activations,” the company disclosed in its regulatory filing.

Pay-TV Shocker: AT&T Loses More Than 1.3 Million Q3 Subs, Including 195,000 OTT

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.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

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.”

Online TV Fortunes Shift as Sony Reportedly Looks to Sell PlayStation Vue

With Dish Network’s pioneering launch of Sling TV in 2015, online TV appeared to be traditional pay-TV’s antidote to subscription streaming video, Netflix and Amazon Prime Video.

But four years later and the online TV, or virtual MVPD market, has cooled. Online TV services added 430,000 combined subs in the second quarter — a 44% decline from 756,000 net subs additions in the previous-year quarter.

The market, which includes Philo, Hulu Live, YouTube TV, Spectrum TV, and Vidgo, among others, appears stuck in neutral as high-profile SVOD services from Disney, Apple, NBC Universal and WarnerMedia are poised to enter the market.

AT&T’s ambitious DirecTV Now service has thousands of subs after it did away with a $34.99 loss-leading price point. The platform is now called AT&T TV Now with about 1.5 million subs.

Subscribe HERE to the FREE Media Play News Daily Newsletter!

Sling TV continues to lead the standalone online TV market with 2.47 million subs — up 128,000 subs from 2.34 million subs last year. But that growth has eluded Sony’s branded $49.99 PlayStation Vue service, which languishes as a fiscal underachiever with around 500,000 subs.

According to media reports, Sony has hired Bank of America Merrill Lynch to explore PS Vue sale options, with competitor Fubo TV reportedly interested. Nothing has been announced and sports-themed Fubo and Sony aren’t talking.

When Vue launched, it was the first online TV service offering cloud-based storage and on-demand features. But Sony last year began sounding warnings about Vue, saying the “market and future business model” for the platform remained rocky.

Indeed, when Vue dropped Sinclair Broadcast Group stations last year, Sinclair sent out a press release announcing that it had removed ABC, CBS, Fox and NBC affiliated stations from the platform due to “certain contractual provisions” — downplaying any material effect on its business due to Vue’s “very small subscriber base.”

“We remind Sony subscribers that there are other video distributor options available to receive our broadcast stations’ programming, including Sony’s direct competitor YouTube TV, which continues to carry stations that Sony has dropped,” Sinclair wrote in the release. “Fortunately, subscribers to PlayStation Vue can terminate their subscriptions with ease and without termination fees.”

AT&T Rebranding ‘DirecTV Now’ to ‘AT&T TV Now’

As expected, AT&T has begun informing DirecTV Now subscribers that the online TV platform is changing its brand name to AT&T TV Now.

The telecom giant, whose WarnerMedia subsidiary is in the process of rolling out the HBO Max subscription streaming video service, is attempting to rejuvenate DirecTV Now, which continues to lose subscribers who signed up for the initial loss-leading $34.99 monthly fee. That fee has been upgraded to $39.99.

“In the coming weeks, the AT&T TV app will be available for download across various app stores, and current DirecTV Now customers will see this update automatically on their devices,” AT&T said in a statement. “We’ll share more details on this rollout when it begins.”

AT&T acquired El Segundo Calif.-based satellite operator DirecTV in 2014 for $48.5 billion. It acquired Time Warner in 2016 for $84.5 billion.

Subscribe HERE to the FREE Media Play News Daily Newsletter!