AT&T has seen the writing on the wall of the OTT market and put its anchor down with the launch of DirecTV Now in 2016. While the idea behind the service is sound: a streaming OTT service that offers live television and premium content at an affordable rate. The service itself has been plagued by a myriad of issues since its launch, resulting in an unusually large influx of customer complaints. TechCrunch, recently reported on this issue finding that AT&T is refusing to issue refunds for dissatisfied DirecTV Now customers.
However, despite the deluge of complaints, AT&T reports adding more than 200,000 new video subscribers during the fourth quarter of 2016; which was entirely driven by DirecTV Now, according to the company.
In a filing with the SEC AT&T makes clear that these subscriber growth numbers only include paying customers. AT&T is scheduled to report on their actual earning results on January 25th, 2017.
AT&T executives pitched DirecTV Now as a OTT industry disrupter due to their exceptionally low entry-level price of $35 per month for a 64 channel bundle. There are, of course, a variety of different channel packages if 64 channels just doesn’t cover your content needs. The higher-end packages top out around $70 per month.
The fourth quarter of 2016 was a big one for AT&T. Not only has AT&T reported video subscriber growth, their wireless subscribers also grew substantially with a reported 900,000 new branded net domestic wireless subscribers in the fourth quarter of 2016. Of those 900,000 about 500,000 postpaid and 400,000 prepaid.
During that same quarter, AT&T saw roughly 700,000 of their 2G subscribers deactivate their accounts. Despite the company discontinuing service on virtually all of their 2G cell sites, they still have about 2.3 million 2G subscribers and non-voice phone connections as of December 2016. Consumers can expect to see the company continue to phase those accounts out as quickly as possible.
DirecTV Now continues to suffer from a plague of customer complaints, but the service seems to soldier on despite these issues. AT&T has invested a significant amount of time and capital into this product and its success is imperative for the continued growth of the company. While 200,000 new subscribers in Q4 is fantastic, that growth needs to continue into 2017 for DirecTV Now to truly be considered successful.
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