DirecTV Now today reported that it lost 267,000 subscribers during the fourth quarter of 2018, causing the service to dip from 1.8 million subscribers in Q1 2018 to 1.6 million in Q4 (via TechCrunch). Despite the decline, DirecTV Now is still at the forefront of the streaming TV market, second to SlingTV as of last fall.
In AT&T's fourth quarter earnings report, the company attributed this loss to the closure of several discount bundles that were heavily featured on the service's website, and shared online. This includes the popular Apple TV bundle (which expired in June 2018) and a few Roku deals.
The company attributed the decline to the end of promotional package pricing, which sometimes saw the service priced as low as $10 per month for an introductory period. It had also offered device giveaways – like Roku streaming sticks or Apple TV boxes – to encourage sign-ups.
AT&T says its “discounted introductory offers ended,” which resulted in the dramatic loss.
At its peak, the DirecTV Now deal for Apple TV required you to prepay for three months of the streaming TV service for about $105. Once you did this, AT&T would send you a 32GB Apple TV 4K at no cost. In essence, customers were paying $105 for a 32GB Apple TV 4K, down from around $170, and getting three months to try out DirecTV Now as a bonus.
Of course, you could still cancel DirecTV Now before those three months ended and not pay to continue using the service, and it appears that's what many people did last year. Although DirecTV Now has a large channel lineup, it also has numerous problems with its service, which also likely led to subscriber churn noted in this week's earnings report. This includes a barebones cloud DVR with low storage and unreliable recordings, various performance issues, outages, and more.
AT&T also raised the price of DirecTV Now last summer, increasing every tier by $5/month to stay "in line with the market." This increased DirecTV Now's "Live a Little" plan from $35/month to $40/month, matching rival services like Hulu with Live TV, which starts at $40/month, and YouTube TV, which also raised to $40/month to compete with Hulu.
Although many were hoping that the Apple TV offer would return in the fall of 2018 as it did years prior, AT&T never resurfaced the deal.
Top Rated Comments
This is simply what happens when you chase short-term profits and treat your customers like cattle. Any company that engages in these sort of practices will get what they deserve.