AT&T recently said that they have added more than 200,000 new video subscribers in the fourth quarter of 2016, and that all the sign ups were driven by their new DirecTV Now service, which is their internet-delivered pay TV service. In a filing with the SEC, the Telco said that the gain in the video subscribers includes only the paying subscribers.
“While it’s early days, our recent conversations with investors have focused heavily on whether [virtual pay-TV service providers] will be incremental vs cannibalistic, and we’ve been arguing incremental,” RBC Capital Markets analyst Steven Cahall said. “This potentially sets up Q4 results for interesting subscriber commentary.”
DirecTV Now service was launched by AT&T on Nov 30, and the service has been plagued with many technical issues and glitches since then. One of the service outages lasted for many hours last week and this outage angered many of the customers of the very young over the top offering from AT&T. Many subscribers demanded for refunds owing to the service interruptions, but AT&T refused to offer any refunds to the users who are unhappy with the DirecTV Now service.
Earlier, AT&T executives had promised to shakeup the pay TV industry with the introduction of the DirecTV Now service that is priced competitively. DirecTV Now service starts at thirty-five dollars a month for sixty-four channels offering to a package offering of up to 130 channels for just seventy dollars per month. Local channels on the DirecTV Now service are available in select markets from NBC, ABC, Telemundo, and Fox. AT&T does not have a deal with CBS for their DirecTV Now service though.
AT&T said that the rates of their DirecTV Now service will increase in time, but promised that the early adopters will have the promotional pricing for as long as they use the service. AT&T also offered Apple TV and Amazon Fire TV devices to those users who committed to a three months or one-month plan deal respectively.
In addition to that, AT&T said that they have added more than 900,000-branded net domestic wireless in Q4. Yet reports say that around 700,000 2G users deactivated their accounts in the quarter. “We have discontinued service on virtually all of our 2G cell sites,” the Telco said. AT&T is scheduled to report their Q4 earnings on Jan 25.