DirecTV Loses 156K Net Subscribers In 2Q

(Satellite Business News) — AT&T’s DirecTV satellite TV service lost 156,000 net subscribers in the second quarter of this year, AT&T announced yesterday. The announcement came two years and one day after AT&T closed on its purchase of DirecTV.

The DBS service ended the quarter with 20.856 million subscribers, AT&T said. DirecTV added a net total of 342,000 subscribers in last year’s second quarter, and the 156,000 net loss in this year’s second quarter was by far the worst quarterly sub result for the DBS service since it was bought by AT&T.

In the first quarter of this year, AT&T said DirecTV’s net subscriber additions were zero. In the eight quarters AT&T has reported results for DirecTV, the DBS service has added only 1,312,000 net subscribers

The results were even worse for AT&T’s U-verse wireline video service. It lost 195,000 net subscribers in the second quarter, the company said. That service has seen its subscriber count drop by 2.12 million in the last nine quarters, and ended this year’s second quarter with 3.825 million total subscribers. AT&T has admitted it has been converting U-verse subscribers to the DirecTV DBS service, since the satellite TV service pays far lower wholesale costs for programming and the moves also free up wired bandwidth.

At points, AT&T has said 70 percent of DirecTV’s net adds have resulted from conversions of U-verse customers, which could mean DirecTV’s organic net growth is even worse than the numbers provided by AT&T would suggest.

Combined with the net addition of 152,000 net subs from its DirecTV Now on-line video service, the net declines from the DBS and U-verse services resulted in an overall net video loss for AT&T in the second quarter of 199,000 subscribers. AT&T said it ended the quarter with 25.2 million subscribers to all its video services combined

AT&T said that 85 percent of “traditional video base is now on” the DirecTV satellite TV service. It attributed the loss of satellite TV net subs in the period to “seasonality and elevated competition.”

During a conference call yesterday with financial analysts, AT&T Chief Financial Officer John Stephens continued to blame DirecTv’s downturn on “involuntary churn,” which means subscribers cut off when they do not pay their bills, and customers who leave the service in areas where AT&T is lacking the ability to bundle satellite TV with other services — especially high-speed Internet. Those who were dropped because of non-payment were “a higher number than normal” in the second quarter, he said, though the company expects that trend to continue through much of this year.