John Stankey, chief executive officer of AT&T, is presiding over a company struggling to solve several thorny problems including how its new streaming service, HBO Max, can succeed without being available on the nation’s two leading streaming devices, Roku and Amazon’s Fire TV.
Although that alone would be enough to keep some executives awake at night, Stankey’s worry list has an even more vexing challenge at the top: What to do with DIRECTV, the company’s beleaguered satellite TV service.
Since purchasing DIRECTV in 2015, the satcaster has lost between six million and seven million subscribers due to cord-cutting and, by many measures and accounts, company mismanagement. AT&T decided soon after the sale that it would focus more on streaming than satellite, triggering a company decline in investment in time and money in DIRECTV.
Consequently, DIRECTV’s subscriber decline continues at a rapid pace, and industry analysts speculate that AT&T may need to sell the satellite TV business for dimes on the dollar to save face, and eliminate debt. (AT&T needed to assume debt to complete the purchase in 2015.)
It was under this cloud that Stankey spoke virtually yesterday to the Goldman Sachs Communacopia Conference. The executive, who officially resumed the AT&T top post just 10 weeks ago, addressed the ongoing DIRECTV sale rumors and here is what he had to say. (With my analysis in bold to help decipher Stankey’s corporate-speak.)
Stankey reiterated that AT&T needs to reduce company debt, another sign that the company could be interested in selling DIRECTV, and possibly, other AT&T entities.
“We want to get the debt in the balance sheet back into our traditional conservative state,” he said. “We’ve used the balance sheet strategically over the years, when we had opportunities to go do some things that we thought would reposition the business for the long-haul, we’ve, of course, used it and used it as a tool. We did that with the Time Warner transaction and we’re now committed to getting it back into the filing trend that we know we want it in to be opportunistic of when that next opportunity pops up and that’s really in a nutshell kind of where we’re focused right now.”
The AT&T chief was coy on rumors that his team is trying to sell certain assets including DIRECTV. But he acknowledged that AT&T is assessing which company holdings still make sense for them.
“…Maybe there’s a little bit more rumors leaking out on whether or not that (selling DIRECTV) is in fact something that’s going to come to fruition remains to be seen and I’m not going to comment on anything, specifically on any unique transaction,” Stankey said.
“But what I would say is, I think what’s important to this management team is, we want to make sure that the assets we have are something that are, one, supporting the key strategic areas, I just outlined. Two, that they’re meaningful in terms of scale that they can produce in growth that we can be good at them, that they can be something that can be differentiated and sustained in the markets that they’re in. And I will tell you that, one of the things I’d like to see the management team be a little bit more effective at what we’re working toward is ensuring that we’re focused and have all of our time and attention on those key strategic areas.”
Stankey and other AT&T executives have said repeatedly that they don’t believe DIRECTV, and satellite TV, can grow now. Streaming is the future, they have maintained. Stankey’s comments that AT&T now wants to focus exclusively on products that can grow would suggest it’s contemplating a DIRECTV sale.
“So if we have an asset that in particular is taking management time and attention and it doesn’t necessarily contribute to those key areas that I just stress…even if it may financially be doing reasonably well…I’d asked whether or not (management) is better served to have a little bit more time and attention on the things that really matter that we think are strategic carrying the business forward.”
“Even if it may financially be doing reasonably well.” DIRECTV continues to show a profit financially, even though it’s losing subscribers.
But Stankey warned that AT&T may not necessarily jettison certain assets (such as DIRECTV) despite the sale chatter.
“And just because the noise is happening, doesn’t mean that there’s something that’s definitive or will come to pass, but I think I’ll take a little bit of that noise to get better decisions is kind of where my head’s at right now,” he said.
Stankey also reiterated that he doesn’t see the pay TV industry, which includes DIRECTV, being successful in the coming years. AT&T, he says, wants to persuade current pay TV subscribers to shift to streaming. (The company has two live, multi-channel streaming services, AT&T TV and AT&T TV Now. AT&T sees them as alternatives to DIRECTV and the company’s other pay TV service, U-verse.)
“Where the moment momentum is, is in getting into a broader distribution product that can touch more households, have more relationships. Frankly, give us more insights about how the customer is behaving on any given day and we think an SVOD, AVOD offers subscription and advertising together is a far more attractive place to be able to launch haul then, what I would call it, what’s been the workhorse the pay TV product for a period of time,” he said.
Stankey added:
“But clearly (pay TV) is one that’s seen its peak and is working down the backside of the growth curve. And as a result of that, I will tell you will be diligent managing the mature product. We will try to drive as many of those (DIRECTV and U-verse) customers to software ways of doing business with us in the pay TV market and give them a natural glide path to some of our other entertainment based products (streaming).”
Stankey yesterday did not mention Dish, or any other company, that might be interested in buying DIRECTV. But despite the somewhat cryptic nature of his remarks, it’s clear that AT&T is seriously exploring the sale of its satellite TV service.
The TV Answer Man will continue to monitor this development, and report back here when we learn more.
Until then, happy viewing, and stay safe!
Have a question about new TV technologies? Send it to The TV Answer Man at swann@tvpredictions.com. Please include your first name and hometown in your message.
— Phillip Swann
People always say, why don’t you drop Directv? Well here are several reasons:
1. When it works properly, its fantastic.
2. All the channels, easy access to them (unlike via internet access, either online or through a Roku/Apple or other type. One touch access, channel up/down – you get it!
3. The best sports line-up available, including via internet. Just the Sports Package (with all of the Regional Sports; Fox, AT&T… YES, MSG – blah, blah, blah) alone cannot be duplicated on any other system.
4. In rural areas or areas with poor cable penetration and/or internet, its the only game.
But the biggest downside is AT&T.
Since AT&T took over the Customer Service has declined. At this point it is really almost non-existent.
When you have a problem, big or small, expect to spend hours if not days first getting to the right person or someone who knows something. Their main C.S. has as little knowledge as any company I have ever worked with. You spend incomparable time on hold. When you finally do speak with someone who has some degree of power, they are usually rude, and in fact, lie about facts. Plus they never take good notes in the system. Then they pass you off to another person and you always have to spend 10 minutes each person explaining what is going on.
AT&T, or Southwest Bell which is who they really are (they bought the rights to the ATT name) are and were a backwater Baby Bell. Always the least profitable and worst performing of the “babies”. They borrowed a lot of money and through some financial chicanery became larger then and had assets that didn’t match their true capabilities. Directv, Time Warner, the old “bad” sections of AOL. On and on. It was all a bad marriage of companies. Now they do not know how to make this Goliath work.
So there you have it in a nutshell. I love them and despise them all in one breath. I hope they sell but not to DISH. Ergen has shown that his wallet is more important then the Service.
The problem is AT&T when they took over DirecTV went down hill, The only reason I still have it on only one of my TV in my house is I’m waiting on my internet company to upgrade. Than I will only be doing Fire stick. And get a Smart TV.
I am one of the earliest subscribers to DTV .if fact I just signed up for another address.I have told often how great the service was before ATT toke over and outsource to overseas.I hope as a company we don’t loose this service since as many of us rual people ie DSL only
I drop all AT&T SERVICES PHONE,INTERNET, U VERSE DIRECT TV CELLPHONES I TRIED THEM ALL THEY ARE A RIP OFF PERIOD GREEDY COMPANY CARES NOTHING ABOUT THEIR CUSTOMERS I WAS A DEVOTED 15YR CUSTOMER THEIR AWFUL ME CELLPHONES( 2)LINES 300.00 CABLE INTERNET 300.00 $600.00 AMONTH RIDICULOUS GREED WILL DESTROY THEM
I disagree. Dish has been superior to DTV in their hardware (Hopper), and their customer service. DTV has NO customer service IMHO, and I have had both. If all you watch is sports, stay with DTV, but overall, Dish Network is very superior to DTV and is at a better price.
Very well stated. I have been a Directv subscriber for nearly 20 years and I can echo all the positives about it that you have stated. I told anyone who would listen that once ATT bought it, the service would go downhill. Off shoring CS was a huge mistake.
I am an 80 year old X-Broadcast Station owner. I saw the same events take place after the FCC did away with the three year ownership rule and opened up the FM Band with Docket 80-90 which permitted FM stations on every street corner. I saw the writing on the wall. I have been a DTV customer since 2006. When my rate went up last week I said no, and moved to Dish. I am sorry ATT bought DTV. Maybe Dish will survive 2 more years before streaming takes all of the customers. Love your stories.
Not sure, as a long time DirecTV customer, why I would ever subscribe to an ATT streaming service. I know how well I was treated by DirecTV pre ATT and how poorly I am treated now.
Absolutely true , since the switch to ATT. customer service is poor and same at ATT , are charging you different things in the bull , that you didn’t have before , ATT IS RUINING DIRECTV
Amen. Dreaded the thought of AT&T buying DirecTV. My dread was correct. I curse the government for allowing the merger.
Curse the government all you want, but it doesn’t “allow” a merger. It only sues to block a merger if the government believes the merger violates antitrust laws. It is hard to see how a telephone company buying a television service created a monopoly.
If you want to curse anyone, it would be the former DirecTV shareholders. They are the ones that voted in favor of the merger.
Yeah that’s all good except for no internet everywhere. That’s why there a satititte n my yard.
Yes, but you are saving thousands in taxes by living in the ‘boonies.
U sell im droping my service
Hope AT&T sells Direct TV…and I have a window to drop it without having to pay a penalty. Very poor customer service. Dish is much better provider with much better customer service and packages.
when they have them, too often dish loses channels because charlie is a penny pincher… his, not yours
ATT big problem is the contract and keep upping the price. That was the main reason I left and it was so hard to to talk to a real person
With data capped internet streaming of live TV is difficult. My cable provider who gives me my internet wants $50 more a month to remove caps. Caps I will bust if I stream TV content through a streaming service like AT&T’s or even YouTube TV.
If AT&T wants to see better success from streaming, ironically they should be pushing the FCC to remove data caps.
the dirty little they don’t tell you about cutting the cord
you still have to pay for internet plus extra for unlimited and higher speeds to support s multiple tv family
plus streaming services
Netflix and hulu are great for what they offer but to get access to network channels and current live tv you gotta pay
up and your back to where you started
It’s no secret that you need the internet to stream. You need electricity too. Just like with DirecTV. I’m paying 1/2 what I was paying. That too is not a secret.
Yes, in the last 5 years, the quality of DIRECTV has deteriorated. The customer service representatives (both DIRECTV & AT&T mobile)tell lies to get you to sign this lease (year or more). They lie about the pricing and what is offered. Being promised a lower bill, then getting an outrageous one, it floored me. Like most of us, I cannot afford $500 to $900 payments. Sale it and get it back the way it was before AT&T took over
Living in the country with poor internet forces us to remain a Directv customer. As ATT loses DTV subscribers our rates soar! Total rip-off!
AT&T is a company that has always been very heavy on the top end. It started after the Ma Bell breake up. More chiefs than indians bringing in revenue.
As a former direct t.v. subscriber , I left because of the lack of fresh programming and price. Their advertising and infomercials were taking over my programming. Once again typical AT&T greed . The days of the AT&T strategy making quick easy money at the cost of taking advantage of their customers is over. The AT&T name still opens doors for a company who’s doors should of been closed decades ago.
I left AT&T years ago because of extremely poor customer service and poor quality for rural customers. DIRECTTV has gone downhill significantly since being under AT&T. They do not honor long term customers at all and LIE every single time on their customer retention promotions. Streaming will never work in our rural area because of limitations hence the reason we have satellite. After all these years, DIRECTTV is going bye bye because they certainly do not value loyatly.
My parents d have Direct TV. I blight my Dad and Mom a 4k Samsung TV their B Day. He to call service for 4k upgrades and rep. named George was excellent and even .y Dad and myself # in case was any problems and he responded the very next day. Can’t beat that response. Fastest serviced I had ever seen and answered all questions without hesitation!!!!!!!!
I have read the comments ,they are true ,customer service is so bad ,I started mailing my bill ,you couldn’t get them to understand enough to pay it at customer service ,I like Directv but as everyone has said its AT&T and the price just keep going up.
Didn’t y’all read
AT&T is dumping DirecTv
I wonder NFL pkg might go??
I read with interest John Stankey, the AT&T CEO’s remarks on DirecTV. After getting past the “corporate speak,” I too am left with the impression AT&T is testing the waters for a buyer and also whether the FCC or FTC will have an issue with a possible sale.
My fear for those of us who are satellite service customers, because of poor broadband or a multitude of other reasons, is we will be a captive audience in a Dish/Charlie Ergen/DirecTV monopoly. Mr. Ergen has shown a complete disregard for his Dish customers and will wield even more control if/when the DirecTV customers are added to the mix. He has been able to use his power and influence with little penalty because of ironclad customer contracts and a captive market segment that relies on satellite services. Sadly, we have no recourse and are shackled for a minimum of two (2) years…all while Dish is saving millions in carriage agreement contracts and padding their bottom line!
As a reluctant Dish customer and a former DirecTV customer (from the good old…pre AT&T days), I hope Dish is unable to purchase DirecTV. What little satellite competition will be gone and Mr. Ergen will hold all the cards. He’ll play a cutthroat game, and once again the customers’ will be dealt a losing hand…
As a family living just 50 miles west of San Antonio, it is insulting and incredible that we have no cable service and now may not have satellite tv service. How is that possible in 2020?
again david they would be sold to another company and i think they have seen a massive decline is people are ok when you drop channels like el rey, fusion, esquire, or any number of fringe cable channels but when they dropped the 5 broadcast networks although they signed a deal with fox to keep a west coast dns,and also they might have worked out a deal with ktla to keep the cw on, but no nbc,no cbs or abc although those watch shows on the cbs app, the nbc.com website or through directv there app and on demand and abc.com, although abc it takes 8 days to unlock shows if you don’t have a local abc affilate and i’ll be able to stream the emmys either live on the emmy website or probably the next day on abc.com, as i was able to watch the acm’s on the cbs app
I can not take one more….”no signal” every time the weather changes.do you guys have any updated Technology over there!!??? I’ve been a customer since 2002!! “”no signal”” is getting so fricken old Idiots!!!
kevin they actually have updated that as it’s been about two months since my signal went out but now with hd channels they say you can switch to the sd channel so they have done that and oh you probably also noticed that with one of there early morning software updates they did a couple of days ago, with the recording manager it used to be on the side but now you have recording manager at the top
PS I am the president of a 50 member HOA that is fully aligned with my frustration. Anyone at Hill Country Telephone Coop listening??
The hell with DirecTV…every since AT&T bought them they have been going up. My bill went from 92.00 to 154.00. I’ll get a fire stick and 9.99 a month for everything.
If you think DTV is bad service I have been trying to get rid of my Att Dsl for two months . 1 mbps at best. Its still connected and I am still getting billed. I have called chatted sent letters email etc and they still haven’t shut off
At&t AND Direct TV are both beyond horrible. I have been with both for many years and both are ghetto companies. No customer service! All CSR are rude and inadequate in their jobs. The costs are more than the average person can afford. I am now looking into alternatives such as Orby and an old fashioned antenna. No cable available in my are.
AT&T Totally destroyed this company with horrible customer service. I was with directv for almost 20 years and I’d laugh because I just couldn’t take it anymore.
Service aside, which should be corrected. The tv/streaming model ATT has deployed is horrid for customers. There are 3-4 different streaming services (including direct tv) under the ATT umbrella. To provide value they should offer the full suite of features if you subscribe to DirectTV. Instead they nickel and dime everything. This way streaming would be a part of the Direct TV offering and you’d have less reasons to change.
I concur with so many of the comments already made. I’ve been a DTv customer since 2007 (pre-AT&T). It’s been quite the decline. Recently they apparently changed my billing cycle unbeknownst to me to a very inconvenient date and failed to send a bill at all, probably to try to force me to sign up for auto-pay. We haven’t had HD for a select handful of channels since January, but no luck getting it fixed. We are ready to drop it too, but holding out to find out what NFL decides to do with its Sunday Ticket contract. Here’s hoping the NFL launches its own streaming “network.” I don’t love the need for multiple streaming services, but at this point it can’t be more expensive or that much worse then getting raked by DTv.
My in-laws had Uversion (or whatever AT&T’s tv service is called). Oh the stories! It was terrible pre-DTv purchase. There is zero accountability so they keep getting away with it. They are fooling themselves thinking they can persuade DTv customers to switch to its streaming service in an amount that would pull them out of the red.
I have FIOS for internet and phone. So if Directv satellite is no longer available why would I ever go with another ATT product ( probably with terrible customer service just like DTV now has ) when I could just get FIOS TV??? Why would anyone choose an ATT product if another option is available to them when ATT has destroyed Directv?? Common sense dictates they will not.
AT&T DirecTV