AT&T CFO John Stephens said yesterday that his company does not see DIRECTV Now as a “replacement” for DIRECTV, the satellite service.
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Speaking before the MoffettNathanson Media Summit in New York, Stephens dismissed talk that the company ultimately wants to make the live streaming service its primary video offering.
“We’re not looking at DIRECTV Now as a replacement for DIRECTV,” Stephens said. “We’re looking for DIRECTV Now as a way to get customers that they wouldn’t otherwise have.”
Even before DIRECTV Now’s debut last November 30, reports from Bloomberg News and other news organizations said AT&T wanted to make the live streaming service its primary video service in three to five years.
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While AT&T did not comment directly on the reports, they quoted company executives as saying DIRECTV Now would be less expensive to operate, and would attract younger people who might prefer streaming to satellite.
Since November 30, AT&T has sent mixed messages in public as to which service it’s most committed to. At one point in April, the company began selling the streaming offering on the Home Page of DIRECTV.com, which normally is reserved for promotions for the satellite business.
Less than a week after the TVAnswerman.com asked AT&T why it was using the satellite site to promote the live streaming service, the company redesigned the Home Page to remove any reference to DIRECTV Now.
The confusion over which plan to promote arguably could be a factor in DIRECTV’s zero subscriber gain in the first quarter. DIRECTV Now did add subscribers in that time period, according to AT&T.
Stephens yesterday said DIRECTV Now has “met our expectations” in subscriber growth. (The company said earlier this year that DIRECTV Now had more than 200,000 paying subscribers at the end of 2016, but it has refused to disclose its first quarter numbers other than to say they are still adding subscribers.)
“Yes, (DIRECTV Now) has met our expectations, actually kind of phenomenal results in December. The promotions we put in with the Fire Stick and the Apple TV were overwhelming, positive, great,” he said.
But the AT&T executive reiterated earlier comments that the company scaled back some promotions for DIRECTV Now to concentrate on “really improving at platform, making sure to get all the technical kinks out.”
DIRECTV Now has been riddled with technical snafus since its launch, although performance as improved somewhat in recent weeks.
As for DIRECTV’s sudden halt in subscriber growth, Stephens blamed that on subscriber churn caused in part on the company previously perusing some customers who would be more likely to drop or switch pay TV service. But the exec said he’s confident that DIRECTV’s future is strong.
“(DIRECTV) can hold or may improve market share,” he said. “But in a business that the overall linear will be coming down. We think it’s got a slower trajectory than many do.”
— Phillip Swann