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AT&T CEO Heralds “Dramatic” DirecTV Now Results One Week After Launch

By Diana Goovaerts | December 7, 2016

AT&T is apparently pleased with initial numbers around its DirecTV Now mobile video product.

Just one week after launch, AT&T CEO Randall Stephenson at an investor’s conference on Tuesday heralded the product’s early success, noting the company hit the subscriber benchmark it had set for the month of December the day the service launched.

“This is a big runner,” Stephenson said. “We have no idea what the churn characteristics of this are going to look like so we’re going to be cautious about putting numbers out. But the early demand has been rather dramatic. It’s been really, really impressive.”

In addition to general uptake, Stephenson said “attach rates” for add-on channels like HBO and Cinemax for $5 extra per month each are also “really good.” Further, Stephenson noted “virtually all” of DirecTV Now’s new subscribers have come to the service online and a high proportion of subscribers live in multiple dwelling units like apartment complexes. Stephenson said the latter point means AT&T is hitting the demographic nail on the head.

While he acknowledged initial margins for the service will be thin (but above 0 percent), Stephenson said those figures will increase as the product grows and scales into a special advertising opportunity in the market. Stephenson also said AT&T is expecting churn improvements as a result of DirecTV Now, which he said will have a huge impact on profitability. For the time being, though, Stephenson indicated AT&T is “perfectly content” with the low margins due to the minimal capital required to launch the product.

Stephenson touted DirecTV Now as “a 5G service being launched on a 4G network,” and noted products like it will help drive efforts to make 5G a reality.

“I think the industry is about to say ‘We need to bring 5G forward,’” Stephenson said, noting AT&T and Verizon’s work on next generation networks. “I think we’re all going to be kind of in a push to bring that forward as much as possible.”


Filed Under: Apps

 

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