Reacting to AT&T’s Stock Market guidance that it expects to lose 390K traditional video subscribers, netted against a gain of 300K OTT subscribers, Craig Moffett, Partner and Senior Analyst at research firm MoffettNathanson has suggested that, in addition to general cord-cutting pressures, satellite TV is particularly affected.
AT&T’s 8-K filing states: “The video net losses were driven by heightened competition in traditional pay TV markets and over-the-top services, hurricanes and our stricter credit standards.”
According to Moffett, there are four important takeaways from AT&T’s video guidance:
Moffett says the weakness in AT&T’s pay-TV numbers shines a new light on the spate of aggressive promotions at AT&T. “Notably, almost all of them appear to be centred on bundling, with the benefit seemingly toward bolstering video metrics at DirecTV. With their wireless and wireline businesses both already suffering from both declining revenues and declining subscribers, it is understandable that AT&T might want to focus on stemming the erosion of their traditional video subscribers so that the third leg of their three-legged stool is not also declining. Today’s 8-K could lend credence to our hypothesis that their promotions might be an expensive attempt to stem such a decline,” he concludes.