AT&T Warns Investors of Heavy Q3 DirecTV Subscriber Losses

AT&T will report heavy subscriber losses at DirecTV in its third-quarter earnings later this month, bleeding that the telco giant chalked up to heightened competition in the pay-TV arena and the wallop of the summer hurricane season.

In a Securities and Exchange Commission filing late Wednesday, AT&T said it would post a net loss of 90,000 traditional video subscribers for the quarter, offset by the addition of nearly 300,000 subscribers to its DirecTV Now streaming service. AT&T reports its third-quarter earnings on Oct. 24.

As MoffettNathanson analyst Craig Moffett observed, the net loss means DirecTV is losing about 390,000 traditional subscribers — customers that had been paying at a higher rate than the low-cost DirecTV Now service. Moffett chalked it up to consumers moving away from the traditional big pay-TV bundle.

“It should be clear that DirecTV, like all of its cable peers, is suffering from the ravages of cord-cutting,” Moffett wrote.

The analyst also noted that the steep decline in traditional subs means that it is “all but unthinkable” that AT&T will make an effort to acquire DirecTV’s satellite TV rival Dish Network. Moffett also projects heavy video losses for Dish Network. “It is becoming increasingly clear that the wheels are falling off satellite TV,” he wrote.

The hurricanes that battered the southeastern U.S. and earthquakes in Mexico took a toll on AT&T’s wireless and video services, the company said.

AT&T warned that the drop in traditional video subs will hurt its revenues and margins. Adjusted consolidated operating income for its entertainment group will be flat year-over-year. But AT&T reiterated in the filing its full-year guidance of mid single-digit earnings growth and free cash flow of around $18 billion.

The subscriber losses at DirecTV underscore AT&T’s desire to diversify its holdings by adding Time Warner’s studio and networks to its portfolio, even though the earnings power of TW’s cable networks is also impacted by the erosion of the traditional pay-TV bundle. AT&T and Time Warner are said to be expecting formal word from the Justice Department on its review of the $85.4 billion merger by mid-November.

The whole industry may be coming to the realization they are in trouble.

Late last month I want to my local cable office to drop a couple of the premium channels. That left me with the basic and advanced tiers and Internet.

The clerk shocked the heck out of me — told me she would bundle my cable and Internet to LOWER MY BILL. End result was a $50 drop in my future billings. That, with the removal of the 2 premiums, makes for a grand reduction of about $80. She did say that the reduction would go for a year and I could check then to see what future ‘bundles’ might be available.

I told her that that was the first time in 18 years the cable co intentionally lowered my bill.

In what way does it make sense for a phone company to be connected with a satellite TV company?

AT&T has always been a Communications Company and has always as such been involved in TV ever since the Big Three networks were first formed. AT&T did the network switching for all major networks beginning with their landlines and Microwave system even before we had launched a satellite into space. The local TV stations had a microwave dish they received their signal from AT&T. AT&T still is the backbone of nearly all communications even cell phones which uses AT&T switching and trunking services.

People forget that satellite TV was originally in it's in your home design was meant for locations which could not get a local TV station signal and many still today can not even 10 - 20 miles from the local TV tower farms. The digital technology changeover on over the air TV didn't change that because in such cases terrain is the issue.

AT&T by buying into DIRECTV simply is expanding it's consumer base. I've had the large 10 foot C-Band satellite, Dishnet, and Direct, which I have now. It was that or look at three network ghost TV. After the C-Band was installed I did my own maintenance, adjustments etc. I have installed all of my smaller dish systems as well. Direct has been the easiest. DishNet used to have a system which required two cables from each LNB on the dish to the switch close to the receiver.

Persons complaining about loosing satellite signals need to check several things. They require clear line of sight to three different positions at 101, 110, and 119 degrees pointing generally southwest. They must be aligned properly vertical and horizontally. Any length of cable from dish to receiver of about 75' or over requires an in-line amp.

Overall I'm happy with Direct TV because I understand neither the Cable Companies, AT&T {land line portion} nor any others but satellite services will ever in my lifetime provide me service for TV and high speed Internet. I'm waiting on tree trimmers to show up next week. When they finish I'm also calling Hughesnet to finally get rid of Dial Up Internet.

AT&T has ZERO interest or intent in upgrading it's rural land line services so they can provide DSL. If people believe Hughesnet is slow try Dial up. Not posted as a rant but rather for educational purposes. I'm a BellBrat my dad was a 45 yr career Bell Tech and I inherited my parents AT&T Stock LOL.

Tandy-RadioShack and Sears have made bad strategic and tactical decisions for decades and have managed to die a slow death. HPE looks like another slow death. Print media have been in a death spiral for how many years?

KMart was rather quick. Fire the gun toting pretty spokelady and hire the anti-gun extreme opposite. Bankruptcy in how many days?

Some go quickly. Some we wish would go quickly.

Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.