Published on October 25th, 2017 | by Brad Gibson0
AT&T data reveals who streaming TV customers are
If you’re one of the 800,000 subscribers to AT&T’s DirecTV Now live streaming TV service – available on Apple TV – it will come as no surprise that you’ve probably never been a customer with AT&T before.
That’s just one of the interesting facts revealed Tuesday in a third-quarter earnings call from AT&T that gives further insight into how Americans are changing their TV viewing habits and switching from traditional cable and satellite services to cheaper bundles of live streaming services through devices like the Apple TV set-top box.
AT&T’s Chief Financial Officer John Stephens confirmed numbers already reported by BESTAppleTV.com back on October 12th that the service has more than 800,000 subscribers, but he also said about 700,000 of those customers – or 87.5 percent of their total client base – are new to AT&T and have never subscribed to any of the companies products, including mobile phones.
“That’s incredible scale in less than a year of operation, and we expect that growth to continue,” Stephens commented. “DIRECTV Now is only getting better. We’ve added live local channels in more than 75 markets, with more than 30% of the country now receiving all four of the major networks.”
Stephens confirmed a number of other interesting pieces of data on customers, including…
- Only 10 percent of the 800,000 DirecTV Now subscribers are converts from its DirecTV or U-verse TV services.
- Half of DirecTV Now’s customers switched from another pay-TV service, mainly from competitors.
- The remainder of them are people who did not previously have cable or satellite TV.
- “More than half” of DirecTV Now customers are not AT&T mobile users with a bundled subscription.
DirecTV Now’s gains were a bright spot in a tough quarter for AT&T’s traditional TV business. Its two other services, U-verse and DirecTV, lost a total of 385,000 customers during the three-month period. The company reported $39.7 billion of revenue in the third quarter versus the $40.1 billion in revenue that analysts had expected.
While the streaming service has won over customers with its lower cost and promotional deals, Stephens said the service has tighter profit margins and no annual contract that will negatively impact the companies bottom line and won’t be made up from the subscriber base of its U-verse and DirecTV services.
“While we increase our capabilities and ad reach even more (with DirecTV Now), there will be some twists and turns along the way in this evolution, but we’re confident in the direction we’re heading,” Stephens said.
He also confirmed the company will be trying to convert to DirecTV Now more of its U-verse and DirecTV customers who have credit issues.
“For those customers of a certain credit quality, we might look to push them or move them towards DirecTV Now,” he said, “just like we’ve done in the past with our (other) successful offerings of prepay.”
Stephens said AT&T is looking toward new money-making opportunities for DirecTV Now in 2018, including pay-per-view options for music and movies and the addition of a Cloud DVR service that is currently in beta testing.
“(In the long term, we’ll be thinking about our) ability…to learn about what customers are watching (and) help us put together new packages…directed towards what customers (want),” he said. “We think that will help us take market share and also help improve the financial results as we structure those packages.”
DirecTV Now launched in November of 2016 using the Apple TV app with an entry-level package price of $35 per month for over 60 channels.