AT&T reported the loss of 886,000 “premium video” customers in the second quarter, but company CFO John Stephens said he was “real pleased” with the newest addition to that service category, AT&T TV.
“It has been successful and it’s working,” Stephens told equity analysts during AT&T’s second quarter earnings call last week. “Once again, because of the pandemic, some of the home installs and some of that activity has been limited, so once again we’re cautious as we come out of that.”
AT&T’s “premium video” segment includes satellite TV service DirecTV, which is now primarily being marketed in rural areas where cable broadband is more scarce; U-verse TV, a legacy pay TV service no longer being sold to new customers; and AT&T TV, an Android TV-based service that combines IP video delivery with traditional pay TV accoutrements (i.e fatter bundles, fees and contracts). AT&T TV rolled out nationally in March.
AT&T hasn’t disclosed how many customers have adopted AT&T TV.
Stephens did say, “AT&T TV gains helped offset premium video losses.”
He added that AT&T TV had a 90% attachment rate with AT&T wireline broadband, meaning 90% of those who signed up for high-speed internet also took the new pay TV service.
AT&T has indicated that a primary AT&T TV agenda is to spur sales of the company’s fiber-to-the-home broadband service. AT&T said it added 220,000 fiber internet customers in Q2.
AT&T has also touted the self-install nature of AT&T TV as a cost reducer, requiring now truck roll or satellite launches.
Those reduced costs have yet to show up on AT&T’s balance sheet, Stephens told analysts, but they will.
“It’s a challenging business,” Stephens said, summing up the pay TV gambit in the age of cord-cutting. “We continue to focus on cost savings, and we continue to generate a lot of cash out of it.”
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