AT&T's Attempt To Dominate The Pay TV Sector Continues To Go...Poorly
from the not-according-to-plan dept
AT&T's attempt to buy its way to TV sector domination isn't going so well. In 2015 you'll recall that AT&T spent $67 billion to buy DirecTV, eliminating a direct competitor in the TV space. In 2018 it spent another $89 billion to acquire Time Warner, one of the biggest broadcasters in America. Both acquisitions were designed to propel AT&T toward supremacy in the TV sector. Neither acquisition is actually doing so. In fact, to recoup the massive debt incurred from both deals, AT&T started raising rates hand over fist despite the growing competitive threat posed by streaming video providers.
It's not exactly going according to plan. AT&T's latest earnings report (pdf) indicates that the company lost a whopping 4 million TV subscribers last year alone; not exactly the market domination AT&T envisioned:
Meanwhile AT&T's fixed-line broadband subscriptions, generally seen as the backup plan for users who "cut the cord" on traditional television, also continue to slowly but steadily erode:
And things aren't getting better for AT&T anytime soon.
Wall Street stock jocks are worried that the company is facing a large number of programming contract expirations this year, which will require that AT&T (read: AT&T customers) shell out even more money for the exact same programming. That's before you get to the rising tide of competitors including Disney and Apple that intend to also try and dominate the sector by throwing money at it over the next few years. Profit margins are going to drop like a stone on TV, and AT&T, still saddled with some of the highest debt loads of any company on Earth, isn't particularly well equipped for it, even with the FCC effectively in its pocket.
It's a major reason why AT&T has been facing a bit of an investor revolt lately by "activist" investors who feel like AT&T's obsession with mindless merger mania is actually harming the company's attempts to gain inroads in the TV sector. AT&T hopes to rekindle some growth by adding yet another new streaming TV service to its already insanely confusing roster of video brands, but there's no indication that the company's path will get easier anytime soon.
Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.
Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.
While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.
–The Techdirt Team
Filed Under: competition, cord cutting, pay tv
Companies: at&t
Reader Comments
Subscribe: RSS
View by: Time | Thread
But they ARE dominating Pay TV
AT&T is dominating the parts of pay TV that cuts the cord.
Just as Comcast dominates in customer service.
[ link to this | view in chronology ]
Re: But they ARE dominating Pay TV
I wouldn't say "dominating". They're the biggest wireless provider, but there's still at least a small amount of competition in that sector.
And as far as broadband, I'm sure that, like any of the big ISPs, there are regions where AT&T is the only provider available, but they're not as big as some of the other regional monopolies.
[ link to this | view in chronology ]
Headline in 2023:
AT&T has largest loss in a single quarter of any copy after having to write down $150 billion in goodwill.
Seriously, how much goodwill are they carrying from buying DirectTV and WB? It must be billions. And even after they write down those loses they're still going to owe that money.
[ link to this | view in chronology ]
Allen and Two Temps
The viewing landscape is changing with the rise of streaming services and sites like YouTube. These options have content that is not available on any cable service and are more convenient for a viewer once the content is posted. Cable cutting will continue for the near future as many review their options and viewing habits and decide cable/satellite is not worth the money.
[ link to this | view in chronology ]
Maybe a good comparison would be buggy whip makers doubling down on producing buggy whips instead of, say, evolving into producing belts for the engines. AT&T is trying to be dominant in a failing business model. The miracles of natural monopolies with cozy relationships with the government.
[ link to this | view in chronology ]
So
They've spend about 250 billion for basically companies that own time limited rights to programming?
Yet the bit of the market that could make money is the hard lines that supply the data if they invest and expand?
They own a crumbling infrastructure, but want to bill more for less?
What? Focus on the wrong things why don't you.
[ link to this | view in chronology ]
AT&T is a Negative Indicator
Like I have written at this web site more than once:
When AT&T buys late into a business sector (AT&T is always late) and proclaims that they will expand and dominate this business sector with their staggering breadth and brand synergy, you should know that it's time to stop investing in that business sector at all.
[ link to this | view in chronology ]
Leaving No Foot Unshot
AT&T has tried to recover its poor investment costs by hiking cell phone charges. At least, that's how it looked before I took my multi-line account to a different provider.
[ link to this | view in chronology ]
What does anyone expect from a company's name which is American Telephone & Telegraph Company.
Randall Stephenson is an idiot. This isn't an insult. I honestly believe the man is incapable of understanding technology and customer needs, but yet can speak well enough (or used to) to satiate investors at stockholder meetings.
AT&T has a decent foundation. It just has really bad executives making even worse decisions.
Maybe AT&T should reach out to me. I have no CEO experience, but I can absolutely bet I can do a much better job than Stephenson.
To sweeten the deal for a possible change in career, you have have me for millions less than what the company is paying this idiot.
[ link to this | view in chronology ]