Traditional TV is dying.
On Wednesday, AT&T told regulators that it expects to finish the quarter with about 90,000 fewer TV subscribers than it began with. AT&T blamed a number of issues, including hurricane damage to infrastructure, rising credit standards and competition from rivals. The report also shows AT&T lost more traditional TV customers than it gained back through its online video app, DirecTV Now. And analysts are suggesting that that’s evidence that cord-cutting is the main culprit.
Announced last year, DirecTV Now was AT&T’s answer to Netflix and Hulu. AT&T initially sought to drive aggressive adoption by offering deep discounts, and it bundled it with unlimited data plans for cellphone users.
While those efforts have helped offset losses in DirecTV’s main satellite-based service, it’s that traditional TV package that remains the most lucrative product for providers. Streaming apps don’t do as much to bolster the bottom line — meaning AT&T would be in tough shape even if it were replacing TV subscribers on a one-to-one basis with digital app users, which it isn’t.