News Analysis
AT&T may have gotten a wake up after the first quarter when DIRECTV and the U-verse TV services combined lost a net of 233,000 subs. Perhaps even more alarming was evidence that its new live streaming service, DIRECTV Now, suddenly was experiencing backward subscription growth after a strong first month in 2016.

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The telco expected U-verse subs to decline. In fact, AT&T orchestrated a reduction in the number of U-verse customers after it purchased DIRECTV in 2015. The company purposely initiated an effort to get U-verse subscribers to switch to the satellite TV service.

So the net zero subscriber gain for DIRECTV in the first quarter must have sent chills down the backs of AT&T executives. DIRECTV was the in-house TV service that was supposed to generate a large number of new subscribers, not stay flat.

And the disappointing numbers for DIRECTV Now, which the company has suggested will one day replace both U-verse and DIRECTV, probably led to a significant number of sleepless nights for the boys and girls at AT&T headquarters.

Consequently perhaps, AT&T has since shown a new respect for current and future video subscribers by reversing course on two major company plans.

The first one:

Fletcher Cook, an AT&T spokesman, told The TV Answer Man in March that the telco was considering eliminating service at “as early as May 30.” AT&T then also started notifying customers in letters and advertising notices that the site (but not the entire TV service) could close on that date. (The closure would be part of the company’s slow but sure effort to drop U-verse altogether and make DIRECTV its sole pay TV provider.)

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The customer notices were a strong indication that the site’s closure was highly likely, and U-verse subscribers registered their protests at social media sites and elsewhere. The site, which offers streams of on-demand and live programming, has become a popular destination for U-verse video subscribers. Its closure could cause U-verse customers to drop their service, and switch to another provider. (And perhaps not AT&T’s DIRECTV or DIRECTV Now.)

To keep everyone happy, AT&T told me in May that it would not close U-verse after all.

“We’ve elected to continue support the web site for at least the next several months,” Cook said.

And now this week, the company has reversed course again, this time on its plan to restrict computer and laptop use of DIRECTV Now to the Google Chrome browser. The plan, which was announced a month ago, and was seen as an effort to limit technical errors, was highly criticized, particularly by users of the Safari and Explorer browsers.

Just a few days after Chrome was supposed to become the exclusive browser for DIRECTV Now, AT&T revealed the live streaming service would continue to support Safari.

AT&T’s two flip-flops suggests that the company is finally realizing that you can’t alienate video subscribers in today’s highly competitive environment. Consumers have an abundance of choices in video now, from live streaming to pay TV to subscription Video on Demand plans from companies such as Netflix. Any random action that angers a video subscriber could cause him or her to switch services.

That’s why a DIRECTV Now subscriber today can use Safari, and why a U-verse customer can surf anytime he or she wants.

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— Phillip Swann