AT&T Tries Desperately to Downplay Its Cord Cutting Problem DirecTV and AT&T executives spent the week trying to convince investors cord cutting wasn't a real problem, after the company's earnings report indicated that the two companies are getting hit harder by cord cutting than many of their competitors. Despite spending tens of billions on its latest megamerger, AT&T this week posted yet another record loss in traditional TV subscribers, after having similarly broken records the quarter before. AT&T saw a decline of 251,000 DirecTV subscribers and 134,000 IPTV (previously U-Verse) subscribers during the third quarter, for a net loss of 385,000 traditional TV viewers.

And while spending tens of billions on mergers then falling flat on your face is an obvious problem, AT&T and DirecTV executives tried desperately all week to convince the press, public and analysts otherwise. AT&T executives spent the week trying to tell the press that the cord cutting phenomenon would magically disipate before the end of the year, contrary to most available evidence. And former DirecTV CEO Michael White helped move this narrative along by telling CNBC that only broadband, not television, really matters. "The whole issue of the growth in streaming: Millennials' habits are different. There's no question about that," White said. "You are seeing cord cutting, that's a reality. The advantage is, we can sell broadband still." The problem is AT&T's broadband numbers aren't much to write home about, either. The company not only posted a net loss in valuable postpaid wireless subscribers on the quarter, but saw relatively flat growth in broadband as AT&T's refusal to spend seriously on fixed-line upgrades cause frustrated DSL and VDSL users to flee to cable. AT&T reported a 125,000 subscriber gain during the third quarter in VDSL and fiber customers, but a 96,000 reduction in traditional DSL subscribers. AT&T executives really figured they had this whole cord cutting thing beaten by spending tens of billions on mergers and offering a compelling streaming alternative in DirecTV Now. And while the company has seen some traction with its DirecTV Now service (which now has 800,000 users), those customers pay much less than traditional TV users. The reality is many of these companies are going to make less money as over the top TV gets more competitive, something none of them really want to acknowledge. And while it's true that companies like Comcast and AT&T can counter some of this by using a lack of competition in the broadband space to drive up broadband rates (hidden surcharges, usage caps and overage fees), there's no escaping the fact that the magical synergies AT&T promised ahead of the DirecTV deal haven't really materialized. The fact that AT&T has doled out tens of billions on megamergers and a streaming alternative and it's not really working to stem the losses is something AT&T executives would clearly rather not talk about. And while it's true that companies like Comcast and AT&T can counter some of this by using a lack of competition in the broadband space to drive up broadband rates (hidden surcharges, usage caps and overage fees), there's no escaping the fact that the magical synergies AT&T promised ahead of the DirecTV deal haven't really materialized. The fact that AT&T has doled out tens of billions on megamergers and a streaming alternativeis something AT&T executives would clearly rather not talk about.







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Most recommended from 35 comments

jjeffeory

jjeffeory

join:2002-12-04

Bullhead City, AZ 33 recommendations jjeffeory Member The whole issue is... The whole issue is that they're WAY over priced, at least on the DirecTV end.



Getting tired of these 1st year price is reasonable, then 2nd year price is OMG-WTF high... ISurfTooMuch

join:2007-04-23

Tuscaloosa, AL 30 recommendations ISurfTooMuch Member So glad we did it We cut out cable when we moved to our new house, and we haven't regretted it. Granted, we got PS Vue, but we don't even use that too much, and we may dump it.



The way I see it, cable has two problems. First, it's expensive, and second, the quality isn't there. Sure, they may offer 500 channels, but what's the point if they don't contain good content that people want to watch? I remember when cable was maybe 20-30 channels, and, honestly, I found more to watch then than now. Who wants 500 channels when all they contain is shit programming?

TIGERON

join:2008-03-11

Boston, MA Motorola MG7550

24 recommendations TIGERON Member Oh Randall Let's see,



1. $63 billion for a failing satellite company

2. $86 billion for a media company

3. Despite selling a small portion, You STILL have a very vast unwanted copper network that is very bad shape and cannot handle netflix HULU, Amazon video never mind 4K...yet you think placing a low data cap ON wireline and ripping off people on that inferior network is going to make up for not upgrading it all to fiber,

4. You are trying to get the orange baboon in the white house to fire all unions and screw people out of their hard-earned money and protect yourself from being sued.

5. You and several other large ISPs have gone state-by-state bribing public officials to block communities from writing themselves.



Just imagine if you did the right thing of spending all that money on fiber to all of your customers instead of listening to greedy shitheads in wall street.



It must be awful to realize that cord cutting is here and no matter how many M&A's you do, you are trying to convince shareholders that putting the company directly in front of a potential implosion is a good thing.



How are you sleeping nowadays? Radioman991

join:2001-09-24

Dayton, OH 10 recommendations Radioman991 Member Who's stunned by this? Had Uverse for 3 years...LOVED IT. Then, "You get a better deal with DirecTV". Yeah then the next year, they totally screw up billing.



So long, DTV & AT&T. Next year the invisible cord will be cut.

Anona9ee5

@verizon.net 7 recommendations Anona9ee5 Anon It's not a real [big] problem for those that also offer Internet service They'll just be raising the prices for accessing the Internet, which they don't mind at all. The profit margin for "cable" TV is much slimmer than for Internet service--where they make money hand over fist.



Frankly, I think they [secretly] love cord-cutters. vpsj

join:2012-09-10

Plainville, CT 6 recommendations vpsj Member I cut it but it took two years I discontinued Directv after 22 years. The monthly bill was just going up and going up. It took two years to cut the cord because when I asked to discontinue service I was offered a rate of 1/2 of what I was paying. You couldn't say no! The plan I had was determined by Directv over the years and the number of channels just continued to increase. I even got a free HD receiver and antenna! But how may channels can you watch?

But finally the fees or their increases started to appear and the discounts dwindled so I could finally say NO! I could get the bill down 25 percent for this year but for how long. The delayed action of the signal providers astounds me. They will offer a new unproven service but not remodel their existing systems. Would I have stayed with a more tailored package and price. Well I was a customer for 22 years. On a side note, I was never offered a reduced package, that might have worked depending on what was lost!

Anona127f

@2600:1005.x 2 recommendations Anona127f Anon An idea Maybe at&t could sell people on using their incoming wires as a teletype. They could market it as 5G Evolution Fixed texting.