Why Did AT&T Abandon DIRECTV?

53 comments

Q. Can you explain something to me? Why did AT&T abandon DIRECTV after paying all that money for it? It makes no sense to me. Why buy it if they are not going to run the business the right way? It seems like all they care about is streaming and they don’t care anything about DIRECTV’s customers. Can you explain this?! — Sandy, Taos, New Mexico. 

Sandy, that’s a great question. In 2015, AT&T purchased DIRECTV for $49 billion which would suggest the company had great plans for the satellite TV service.

However, since the deal, AT&T has treated DIRECTV like the proverbial ugly stepsister, choosing instead to invest its time and money in new streaming services such as AT&T TV Now (live streaming service formerly known as DIRECTV Now), AT&T TV Watch (live streaming on mobile devices), AT&T TV (live streaming delivered over a company set-top) and HBO Max (a new HBO online service debuting May 27.)

Meg James of The Los Angeles Times chronicled this strange strategy in her excellent January 31, 2020 story entitled, ‘Nearly 3 Million Subscribers Ditched DIRECTV Last Year. Will AT&T Do the Same?’

“Since AT&T took over, hundreds of (DIRECTV) workers have been cut. Software applications and other functions have been outsourced to IBM and Accenture. The company has been eager to sell smaller assets, including its regional sports networks, and has even considered abandoning its exclusive arrangement with the NFL for the popular NFL Sunday Ticket, according to knowledgeable people who requested anonymity because they’re not authorized to comment publicly. The NFL package — a signature DirecTV offering for 25 years — has become a money loser for AT&T, given the high cost of sports rights,” James wrote.

AT&T’s peculiar policies have led to roughly five million DIRECTV subscribers dropping their service since 2015 with many saying the new owner abandoned them before they did the same to the satcaster. Ex-DIRECTV subscribers (and many current ones) have filled Internet message boards with stories of shoddy customer service and other complaints over the last five years.

“AT&T has slashed funds that had been devoted to recruiting new DIRECTV subscribers and used that money instead to develop new platforms (such as AT&T TV and AT&T TV Now), according to analysts,” James wrote in January.

So why did AT&T take this course, you ask? Even a company as deep-pocketed as AT&T can’t afford to waste $49 billion, right?

I think that when AT&T first expressed interest in purchasing DIRECTV, it truly believed the satellite TV business had many years to go before it would be replaced by streaming. Consequently, the prospect of obtaining more than 20 million TV subscribers was exciting to AT&T executives who foresaw selling other company assets to them, such as phone service.

However, shortly after the acquisition, AT&T became concerned that cord-cutting would soon gut the traditional TV business, including satellite and cable. In 2016 and 2017, newspapers and industry web sites were overflowing with predictions from Wall Street analysts and journalists that cable and satellite would soon be extinct.

AT&T could have ignored the forecasts and continued to invest in improving DIRECTV’s service and programming quality. If it had, the satcaster may have been able to minimize the subscriber defections.

But by choosing instead to publicly place its bet on streaming, AT&T sent a strong signal to DIRECTV subscribers that it didn’t believe satellite TV had a strong future. This decision combined with the tidal wave of press coverage about cord-cutting eventually helped convince millions of DIRECTV subs to drop service. If AT&T doesn’t believe in DIRECTV, why should we?

I won’t say AT&T panicked in 2016 and 2017. But the company clearly overreacted to the cord-cutting stories. The wise course would have been to fortify DIRECTV while getting the streaming business ready in private for possible launch in later years. After all, AT&T had just invested $49 billion in the satellite TV business. That investment needed to be protected.

But AT&T actually launched DIRECTV Now in November 2016, less than two years after it bought DIRECTV! And company executives suggested the new live streaming service would eventually replace DIRECTV.

That was premature. DIRECTV subscribers soon started to flee in bigger numbers. And, ironically, DIRECTV Now (now AT&T TV Now) has become a failure as well with the service losing hundreds of thousands of subscribers over the last year.

It was a lose-lose for everyone.

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53 comments on “Why Did AT&T Abandon DIRECTV?”

  1. After a multi year somewhat tenuous relationship with AT&T, I will be ditching U-verse today. I am not going to the AT&T streaming service either. It’s ridiculous that they make you have to have equipment to get their streaming service. Already have equipment I bought Chromecast Roku, fire stick. All operate everybody else’s streaming service just fine the box of equipment for the streaming services is a blatant money grab from us subscribers. Not me. No more. Done. Even wife is on board! If you knew her you know that it’s over. She is even willing to give up her AT&T or SBC global.net email address. Wow. Never thought that would happen.

    1. Besides having to have a ATT streaming box, you have to have a 2 year contract for this service. What other streaming service requires this? It sounds like another ATT failure.

    2. You don’t have to have equipment for Att Tv. I have it currently on all my smart tv’s and one fire stick. You just sign up for the service then download the Att Tv app on whatever device you want and login with your username and password.

    3. Ken, I don’t have any affiliation with AT&T but have also been a customer for years. Actually, the AT&T TV service comes with one set top box with no charge. The App is available on most newer Samsung and LG tv’s as well as the Amazon line of devices (firestick, fire TV cube, etc.). If you are lucky enough to be in an area where the new fiber optic internet is available, it’s completely worth it. I went from my old U-Verse internet at 18 mbps to 1000 mbps. I could stream on every device and TV I own and not have a single connection issue. I kept my Directv, at least for a year, only because they thought I was canceling my whole account so they slashed the price. Just an FYI from someone in the same boat.

  2. I must be the luckiest man alive because up to today I don’t have any problems whatsoever with my Direct TV programming or signal. I certainly detest speaking with customer service but again I guess I’m just lucky as it has been rare I’ve needed them. To hear some of the complaints from people on here and yet still have the service is ludicrous at best. Quit complaining already and go somewhere else. My picture quality is as good as any and I’m not losing stations like DISH every other month. I guess to each his own, do what’s best for you and unless you just like to hear yourself complain, change providers if you are unhappy. I certainly can’t speak as to what the future may bring but certainly if I see my services and quality deteriorate I will certainly change providers as quickly as possible. Just My 2Cents.

    1. Wait until your discount is up and they want to charge you more and give you less. I loved DirecTV and was just like you but after 15+ years I called about my increased bill and they were more than happy to show me the door.

      1. I was with them for 17 years and my bill went up. So when I changed they tried to charge me equipment charges I told them to wait on it.

      2. Kevin, I canceled mine 3 days ago and was planning to switch to AT&T TV with my upgraded 1000 mbps fiber optic internet and they called me back the next day before the changes were made and cut my Directv bill in half. I’ve only had it about 2-3 years. I took the discount and stayed on Directv so I have no contractual obligations for TV or internet.

  3. I was one of the first wave of subscribers in the mid 90’s. I had DTV for about 18 years. I only dumped it three years ago, because it just got too expensive. This is a very strange case. Is the person who made the decision to buy DTV still employed by ATT?

  4. One call to DTV foreign speaking and never followl through (if you can understand them at all) customer service is enough to ditch the service. My new dish service has US customer service people, and for me, better programming at a less cost. Never go back to any AT&T service of any kind.

    1. I’d rather have NO Picture or Sound than a Call Center with NO ENGLISH or help.

      Never go back to any AT&T service of any kind. (This is happening to ALL AT&T services)
      Wonder how long they will be around ?

      1. Yeah, I live 45miles from the exact middle of nowhere. Dealing with ATT’s pathetic cell coverage, overbilling, same thing every month. If I had a real choice, I’d leave.

      2. Tom, where exactly do you get that idea? I have spoken to 4 different people in customer service for Directv, fiber optic internet service and scheduling and they were all American.

      3. Nick, I forgot to mention AT&T has US, English speaking agents to get you On Board.

        The trouble Starts when you call for ANYTHING “AFTER” they have you Locked into a (2 YEAR) Contract.
        Don’t believe me, READ ALL the Other comments on this page.

  5. I suspect that one reason AT&T bought DirecTV that still makes sense is that they are leveraging the content agreements with the DirecTV volume and getting the benefits on the low volume streaming side. Is there any reason this was not mentioned in the article?

  6. I work for ATT currently and while I have encountered numerous issues with it (the same as other major TV subscribers mind you) the product itself is still strong. As far as getting customers taken care of we (out of my particular dealer type) handle all of our own installs, tech calls, and customer service. I’d be happy to assist anyone who needs help and is interested in to provide an amicable experience.

    1. They used direct tv customers as cash cows. Within 2 years they raised prices by 70%. There non stop raising prices and gouging customer deove people away. The final straw was their horrible customer service. I hope they go bankrupt.

    2. Do you work at an authorized retailer? I come to find they’re more helpful in my encounters than corporate stores. I’m very curious. Either way great!

      1. I work for an event retailer. We do home and garden shows and what not and door to door. Because a lot of our customers we don’t see again in person we make sure to handle any and all issues. That’s the only way to earn business.

      1. Just CALL them. You will find out how HORRIBLE they are.
        ALL these comments are TRUE.

        DON’T Call the “NEW Customers Department” They treat you nice till they HOOK You.

  7. As a long time viewer, I would have been a DirecTV customer forever except their fees kept going up, but I was not getting anything for the raised pricing. Then, in addition, their customer service sucks. Having been accustomed to the old DirecTV’s good customer service, I made the switch. I have Roku and Hulu and see everything that my husband and I want to see plus my cost is now half of what AT&T was charging. I hate everything about AT&T.

  8. Don’t forget the reason why they bought DirecTV to begin with: The CEO was speaking at a shareholders meeting and was told BY THEM that AT&T needed another income stream…so he went out shopping like a kid in a candy store and bought DirecTV. It was not a corporate initiative.

    1. AT&T needs NEW Management.
      When you have a few Stock Holders telling you how to run the Company, Something is Hay-Wire.

      If they needed another Income Stream, Get one you know something about.
      If AT&T would have stayed on Track with it’s Premium PHONE service, they could have KEPT their customers.

      BUT they didn’t.
      AT&T Moved their EXCELLENT Customer Service OVERSEAS, to a place with NO ENGLISH Speaking agents.
      RAISED the PRICES higher than the Space Station, Dumped the Phone Book, & 411 (at a reasonable price)

      and STILL Charge Long Distance on the LAND Lines. (LD went out with Cell Phones and IP Lines)
      AT&T SHOULD have (2 Plans) Measured (500 Minutes @ $ 20.00 a Month) and FLAT (UNLIMITED for $ 30.00)
      for the ENTIRE COUNTRY, Canada and Mexico. Customers would come back.
      FREE Caller ID and FREE Trace. (Customers could figure out where these ROBO calls are coming from.

      AT&T could also KILL service to CON ARTISTS (ROBO CALLERS)
      AT&T’S switches can pick-up Multiple calls being made to different numbers in a quick succession,
      like your Bank does if it spots a bunch of charges Out of the Ordinary on your Credit Card.

      Buying DirecTV was a MAJOR Mistake. AT&T Has NO Business in TV. Look at ALL their Attempts.
      U-Verse (Worst service out there), AT&T NOW, AT&T Mobile, AT&T DirecTV, AT&T TV, and others to Confuse us.

      It would be like having a Car Dealer deciding he needed some extra income,
      so he starts Building Track Houses. (He has NO Experience in Building and SCREWS it up BAD)

      Bottom Line: AT&T is going to Loose ALL their customers in ALL Divisions unless they Straighten up and get their act together.
      First thing GIVE-UP on TV. They have a FLAWLESS Record for Screwing UP TV and Pissing Customers Off.

      Next, WIRE their ENTIRE Franchise ares with FIBER, (for Internet) Try and FIX your Phone services.
      QUIT screwing their CELL Customers, LOWER the Rates.
      (MOVE the Customer Service BACK to the USA and be NICE)

      Maybe you can salvage a loosing company, AT&T has a LOT of work to get customers attention.
      Better start with NEW Management.

  9. Been a DTV subscriber since 1995. That was back in the day when you had USSB and DIRECTV combining to send you programming and two separate bills. The degradation with DIRECTV service since the ATT acquisition is utterly hysterically bad. They have no idea what a multiunit dwelling is and how to service it. They have no idea what the hell they’re doing when you call them. You will get different answers depending on whom you called. Bottom line is that two years ago I got a $90 a month credit for a year then I got a $70 credit for a year and now I’m on a $50 credit for a year. When the $50 credit is up I will call up and ask for a credit if they don’t give me one I will simply wave goodbye to DIRECTV. My experience with DIRECTV’s customer service is by far the worst experience I’ve ever had as a customer with any company in my 54 years on this earth. Without the significant credits I’ve gotten I would’ve been long gone.

  10. I worked for at&t and they had to be the nastiest company anyone could work for. They didn’t care about the customer and they sure the hell didn’t care about the employees. They sold CT to Frontier communications and screwed them over by pulling the plug and running with it and had everyone blaming the new company. They’re doing the same to Direct TV and their customers as well. All the higher ups wanna do is line their pockets. Maybe Randall Stephenson should have to answer a few questions to Congress ABO t the money he embezzled.

  11. I was one of the last group of new hires by DirecTV in October 2015. I had no idea ATT bought them, if I had I wouldn’t have applied. I had been a uverse customer and already knew how they viewed customer service. It wasn’t until early November they started making changes, the first was removing the dtv logo and putting att on the building. They changed the key cards and readers. They let unions strong arm their way in, a whole different can of worms. Then in late 2016 they started changing the systems we used. They NEVER told us about DirecTV NOW, I found out 2 days before launch from Facebook. Then they did streaming NFL Sunday Ticket, no info or training. Then April 2017 we was told to answer the phones saying ATT, we no longer could say DirecTV in our greeting. THAT was when I noticed a HUGE amount of people demanding to cancel. They changed service calls from $49 to $99. No offers on premium channels. No offers on equipment upgrades. Employee perks, gone. Don’t even get me started on the nightmares of combined billing or call center stats.

  12. Been a directv subscriber for many years. until about six years ago I was pretty happy with them. especially with the NFL SUNDAY TICKET. I do not even know how many years I have gotten the ticket. I really enjoyed having it every season. the last four or five seasons he has gotten very pricey. spent a lot of time on the phone trying to negotiate a fair and decent price. if directv does stop providing the Sunday ticket I will cut the cord and go to a platform where I can watch all the nfl games. the price of programming keeps getting higher and higher. next to the SUNDAY TICKET I also subscribe to the NHL CENTER ICE. and all the sports pack. plus a decent program package with HBO and SHOWTIME. not sure what my next move will be. it mostly has to do with the NFL. with me it all remains to be seen.

  13. DirecTV is not going anywhere. There are many areas in the US with bad internet and cable TV providers. Even areas with good cable TV providers, DirecTV is better. AT&T purchased DirecTV, Warner and will purchase dish to gain control of yet another large resource like boost mobile customers and phone service to make their AT&T database larger, bet the government didn’t see that coming 🙂 They are basically a monopoly and making it difficult for other streaming and TV service to compete, that’s why Sony shut down AT&T’s only competition PlayStation Vue because it was getting costly buying rights from them.

  14. I love my AT&T TV. I hear people talking about how you need new equipment to run AT&T TV. Doesn’t sound like most of you understand what this product truly is. Literally the box is free as of right now. No need for an installer either like the dish for DirecTV needed. Just an HDMI to the back of your TV and a plug to the wall. It’s great! Live TV and a great channel selections. The box is basically a vamped up roku with voice remote and many other features. And get this! If you have a roku you can stream it on those other TVs too regardless of where they are. If you move often or travel for work you can bring it anywhere you go. It’s an awesome product. Yes the Now service isn’t great.. But you get what you pay for. I even watch it on my phone and tablet. Who cares if “Phillip Swann” has been covering the TV seen for the past 20 years.. Maybe he’s a little outdated. Let’s be real, technology is surpassing most of us in our old ways. It’s a smart product. Especially if you live in places like myself where there are a lot of tree’s and hills and a dish isn’t an option because your neighbors tree is in the way. It runs off of whatever internet service you have and includes so much more then Netflix or other streaming products. Also a smart product because AT&T doesn’t need to pay installers. Sounds more like a win-win rather than a “lose-lose” and if this company is making such a big mistake tell me how they’re one of the top retailers in the nation? As of today #30
    Check Your FACTS 🙂

    1. WHERE did you get the idea AT&T is one of the TOP retailers ?
      What is your idea of a retailer ?

      Ever try calling AT&T for ANY of their products TECH service, Billing, etc. ?
      You WILL Change your mind.
      NOT New Sales. (They have English speaking sales / CON Artists at that number)

      You say: Just an HDMI to the back of your TV and a plug to the wall.
      You also need (2) 110 Volt PLUGS) one for the BOX and another for the TV
      What about getting a SIGNAL ? You will need GOOD Internet (another Cable and Plug for that) and another Charge

      Yes the “Now” service isn’t great.. (That is another AT&T product)
      AT&T has MANY (Just to confuse you)

      It’s an awesome product. YOU haven’t experienced the AT&T HELL YOU will go thru.
      READ Everyone else’s Complaint’s. They are TRUE. You will be Eating your words SOON,
      Especially when you “TRY” calling for ANYTHING.

      Phillip is NOT Outdated, You are UN-informed.

      Keep us Up Dated on your Ride to HELL

  15. I’ve got a laundry list of complaints about this entire scenario. Tech support hanging up on their own technicians while in my home on speaker phone, refusing to tell me when my contract was done. I had five receivers, four of which didn’t work and they refused to fix, even though there own tech said it was their problem.
    Added packages we didn’t order but were being billed for….
    We ran for the hills and that’s just the beginning of what they were doing.
    Got a new”dish” provider and a new internet”cast” provider. Been thrilled ever since!

  16. As long as people live in Rural Areas there will always be a need for DirecTV, most places in my home state barely have cell signal at all much less this magical air signal to run a wireless streaming box.

  17. Satellite service should cost less than cable. No wires to homes.
    DTV then ATT were and are greedy.
    Contracts, equipment rental. When I started DTV I owned my DirecTV TiVo. When I last owned lease was the same as a access fee.
    Poorly run, ATT thought it could do the same but cord cutting is hurting the greed.
    Now they ATT will need data centers and servers to deliver service…

  18. At&t needs to concentrate on fiber optic wiring replacement!! I live 2 mile out of town on a main highway and my internet STINKS! CONCENTRATE on something At&t!!!!!

  19. Was a loyal Direct tv customer fir over 16 years, but after AT&T purchased it the quality started to suck, channels would freeze, and other odd glitches emerged, when you called the 800 number it was all automated and directed you to unplug and wait, then plug in and wait, and go thru step by step checks (which after several times you had already learned to do prior to calling) and made it hard to get a service tech to talk to and then they wanted your info all over again (left hand not talking to right hand), getting auto billed for NFL Sunday ticket after I gad declined it, cane to a point where roku entered my life and we couldn’t be happier, yes i pay fir YouTube TV, and philo and NetFlix, but between them all I pay less than a third of what I paid for Direct TV and all the other free content makes it worth it, sorry Direct TV but AT&T really bent you over the table and stuck it to you, only program I’ll miss is NFL Sunday ticket but it was way overpriced and that’s another story in itself

  20. The article was written well. However, there was a miss and it goes back to their house built U-Verse product. AT&T had to negotiate carrier pricing for channels for their service. Once AT&T bought DTV, they saw what DTV was paying versus their own Uverse product. Whats the best way to get out of a bad deal? Make another service. Tie that into their purchase of Time Warner, now they have pricing for what they paid as a service provider and as a content creator. And you know what else they have because of that? Advertising analytics. Not only can they see what channels/shows people like to watch, they can create more content like it. Just like Netflix does.
    So what about their competitors? With AT&T having a good amount of connected customer through their internet, they can collect data on what people do on their connection. How much netflix vs Hulu vs HBO Go do they watch?
    So while the public news outlets are here pointing out the failure of DTV, it is actually a huge win in the moves they made next.
    3 things happens because of the domino effect of the DTV purchase.
    1. A customer is now more likely to sign up for an AT&T than any other company. They may leave DTV and goto Uverse. Or AT&T Now. Or HBO Max. Or Crunchyroll. Or Cinemax. Or just sign up for a competitor… which pays AT&T for 30% or more of the programming they show… which AT&T then selling advertising against.
    2. They pay themselves for the programming cost of their own services for their own providers. All the TV options they own became much more profitable. MUCH more.
    3. With all this analytical data, how much better does advertising get? Look at their quarterly reports. Their advertising revenue went from $370 million in Q1 2017 to $1.5 Billion in Q4 2019. That is a huge jump. Not because they “got better” at selling advertising. Its because they can practically see everything happening at multiple angles.
    Most streaming for youth happens on their mobile device. AT&T is the second largest carrier in the US, and has 19~ million subs in MX. Has around 20 million internet subs in the US. They have data.

  21. I cannot stand uATT! They’re customer service is atrocious. We had Direct TV and loved it. When the change came about it all went to hell in a hand basket. We had moved about 5 miles away and called them to let them know to cancel the old address and had them connect us at the new house. So now we have a new account.
    We have been in our new house for 4 months now and all we get from them are huge bills! Apparently they never cut the old house off and we’re getting charged for it. This has been happening for 4 months. Over and over again. Each customer service representative we talk to tells us that they will leave messages on our account so it doesn’t happen again. NOT!! Each time we call them to complain we’re on the phone for at the least 2 hours. First time was 4 due to them switching us to different people. We want to get away from these people so bad but we will have to pay alot of money to break our contract. We’re in our mid 60s and we don’t need this extra stress.
    So very sad 😥

  22. I deal with customer service a lot and DirecTV was the absolute best there ever was in customer service. AT&T has notoriously been the worst ever in customer service since the 80s. I knew when they merged it would be a nightmare, but I didn’t know quite how much. First off, their real demise was changing the format on DirecTV. DirecTV had the easiest user-friendly format there was. AT&T’s is very confusing. Anytime I saw the advertising reps in Walmart I’d always tell them they needed to change the format back to DirecTV, and they would always say “we hear that all the time.” Well if they’re too ignorant to listen, then what do they expect? I wasn’t surprised at all to see people dropping in droves. I’ve written letters also and nothing seems to work. They just don’t get it. Very sad because pretty much everyone I know likes DirecTV over any other service, or I should say liked. At my age I have no desire to ever do a streaming service. I just want to press a button and see what I want on TV. I love the way DirecTV has all the information on a show, including original airing date, cast of characters, and other showings, but they’ve certainly let that fall by the wayside too. Thank goodness for NFL Sunday Ticket, but scissor shoe ignorant to change back. I don’t know what to tell him. So sad because I don’t like any other service and streaming isn’t for me.

    1. Do you know any place to see what Channels are in what package on a Web Page ?

      DirecTV “USED” to have an “EASY” comparison Web Page

      It also gave prices for each package

  23. I work for direct tv technical support and I care about you guys and didn’t abandon I just think lot is going on right now u may find very interesting someday soon!! 🙂 I’m sorry you feel that way though

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