With subscribers dwindling, AT&T considers ways to ditch DirecTV

Cal Jeffrey

TS Evangelist
Staff member

The acquisition seemed a good idea at first. The Wall Street Journal notes that after the merger, AT&T took Comcast’s place as the largest pay-TV distributor with 26 million subscribers. It now has 23 million as of the second quarter this year. A loss of 3 million customers may not seem that alarming, but it is the rate at which subscribers are leaving that has investors worried.

DirecTV lost 544,000 paying customers in Q1 2019. It then lost another 778,000 in the second quarter. Furthermore, the company projects that losses will continue as more consumers look to cut the cord.

Investment management firm Elliott Management Corp recently disclosed it had a $3.2 billion stake in AT&T. It sent a letter to the board voicing concern over the struggles and is pushing for "strategic changes." Investors are looking for ways to mitigate the "damaging results" of the acquisition.

Initial thoughts were to sell off the service to Dish Network, but AT&T’s Chief Financial Officer John Stephens confirmed to Reuters that the company is not in talks with Dish citing regulatory concerns.

"In its letter to AT&T’s board, Elliott said AT&T’s DirecTV acquisition has come with 'damaging results.'"

“So there’s been some stories out there about the industrial logic about putting 2 satellite providers [sic],” said Stephens. “It hasn’t been successful, and I don’t know that there’s any change in that regulatory perspective.”

Stephens was referring to an attempted merger in 2001 between EchoStar Communications (later to become Dish) and Hughes Electronics (former owner of DirecTV). That deal was ultimately quashed by regulators claiming it violated antitrust laws and would leave rural Americans with only one option for TV service.

AT&T is instead considering spinning off DirectTV into a separate public company. However, a source familiar with the matter told WSJ that such a move would not be likely until sometime in 2020, to make it a “tax-efficient transaction.”

That said, selling it off to Dish is still not entirely out of the question.

Dish Chairman Charlie Ergen showed interest in picking up the provider in 2014 but lost out to AT&T. At an investor’s conference on Tuesday, Ergen said that interest is still there, despite the regulatory hurdles. He said the company would continue looking into it.

Image credit: Ken Wolter via Shutterstock

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RaXoR

TS Addict
Well given that ATT is competing directly against themselves, this was a given. ATT should have done what they originally did which was use DTV as the TV provider side of the business and themselves as the internet/phone service.

Also not kill DTV Now like they did. Skyrocketing prices and dwindling channel lineup was just a recipe for disaster. Then they tack on the ATT TV Now name instead. They had a potentially good service with DTV Now at it's peak.
 
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Uncle Al

TS Evangelist
Direct TV was one of the first streaming subscriptions I used and it was pretty good, but over time problems with connections on their end and the advent of YouTube TV caused me to change. From the end users point of view, they just never seemed to keep up with the competitors and after AT&T bought them everything just got worse. At this point AT&T might just want to close them and write down the loss .....
 
I have Verizon FIOS.

Fios literally blows away everything else available here in NYC. The transfer speeds are upwards of 500mbps up and down. The Gateway modem in the house operates at 5G speeds in nearby rooms.

Time Warner Cable changed their name to Spectrum.

Spectrum is a joke.

Direct TV is a sick joke.


AT&T has been desperate to tack DTV onto everything they try to sell me.

Free $300 giftcards for Direct TV? LOL That's hilarious.

Direct TV is only useful if you live off the grid in a desert and have solar power with no wires.
 

wiyosaya

TS Evangelist
<...>Skyrocketing prices and dwindling channel lineup was just a recipe for disaster. <...> They had a potentially good service with DTV Now at it's peak.
As I see it, the first sentence I quoted mutually excludes the second sentence I quoted.
 

trparky

TS Evangelist
Everyone who had an ounce of sense in their heads said that this merger was going to result in nothing good and here we are. DirecTV needs to be spun off and Randall Stephenson needs to be kicked out the door with nothing more than an FU.
 

RaXoR

TS Addict
As I see it, the first sentence I quoted mutually excludes the second sentence I quoted.
No, it actually doesn't. DTV Now at its peak had a good lineup and grandfathered pricing for early adopters that was a great deal. Even new customers got a great deal. Then they started to cut down on the channel lineup, started raising prices $5 at a time. Next thing you know, what started out costing $35 a month for 100+ channels ended up costing $70 a month. That's around the time ATT decided to also change the name.
 

Slappy McPhee

TS Addict
We recently moved away from ATT TV Now after being with DTV Now for a year. ATT has been and will ALWAYS be a greedy *** company that could care less about their subscribers or customers. they are so disconnected from the real worth it is a sick joke. we have been using Fubo.TV as an alternative and so far it is alright...just alright. I normally procure content and store it on my Plex server, but my dad is perm disabled and watches a lot of TV so it was their choice to still have traditional *TV*. Fubo.TV for 3 concurrent streams has more channels and a little bit cheaper than ATT/DTV is now. I completely get that Fubo.TV could do something similar like jack up the rates and lose channels, but in the end it is contract free so if that does happen we move elsewhere.
 
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p51d007

TS Evangelist
Not the CASH COW they thought it would be. How about DROPPING the price and make it more affordable?
Plus, if you live in an are where you are subjected to rain, storms, fog, clouds, you probably know what happens with satellite reception.
 

Soulburn74

TS Enthusiast
IF it wasn't for NFL Sunday Ticket, my guess would be that DirecTV would have way less subscribers than it does. I left DTV high and dry, just tired of paying such high prices. I do miss having sunday ticket, but NFL is screwing certain markets, by making 'in market' teams, not necessarily the local teams. (Raiders are 'in market' in LA, so we are screwed on watching any of the games, as none are broadcast in LA, except vs rams/chargers), and can't watch them on sunday ticket..... So they FORCE us to illegally stream the games........ good job. I do go to some games throughout the year in person, and that is THE best experience, but its pricey, and even more so when your team isn't local......... Hulu w/live TV is about $45 a month. (all the pay tv services: HBO/Cinemax/Starz/Showtime are available as well, topping out at around $115 or so. That's half the price of what DTV is when not on a promotional price.
 

Cal Jeffrey

TS Evangelist
Staff member
Randall Stephenson needs to be shown the door over this crap, he was the one who signed off on the AT&T/DirecTV merger.
Oh yeah. He'll be resigning. You don't just blow $49 billion -- with a B -- and keep your cushy CEO position. Trust me the BoD will ask for him to step down.
 

mbrowne5061

TS Evangelist
I have Verizon FIOS.

Fios literally blows away everything else available here in NYC. The transfer speeds are upwards of 500mbps up and down. The Gateway modem in the house operates at 5G speeds in nearby rooms.

Time Warner Cable changed their name to Spectrum.

Spectrum is a joke.

Direct TV is a sick joke.


AT&T has been desperate to tack DTV onto everything they try to sell me.

Free $300 giftcards for Direct TV? LOL That's hilarious.

Direct TV is only useful if you live off the grid in a desert and have solar power with no wires.
I have also been a fan of FIOS, but I made a point of using my own router. It took some finagling - and I had to skip the voice remote (oh, woeisme; one less corporate microphone in my home/s) - but it works, and it seems to be faster than their standard router (750mbps up and down, ping of 2ms)
 

Kooterdan

TS Rookie
As my retired 90yo father was becoming broke from his $210.00 monthly AT&T bill, we were considering going with their $100.00 Dish package, but then, "There was a 2 year contract!" Greedy AT$T. You screwed yourself out of new and existing customers with that 'scary' proposition. WE cut the cable and now our bill is $105.00 a month and we have HBO!
 

kissx

TS Enthusiast
I diched directv last year. youtube tv is so much better and a lot cheaper!
Direct TV was one of the first streaming subscriptions I used and it was pretty good, but over time problems with connections on their end and the advent of YouTube TV caused me to change. From the end users point of view, they just never seemed to keep up with the competitors and after AT&T bought them everything just got worse. At this point AT&T might just want to close them and write down the loss .....