Shares of TV providers drop as AT&T warns of video losses

The Trentonian (Trenton, NJ) - - BUSINESS -

NEW YORK » Signs that more peo­ple are drop­ping their tra­di­tional TV sub­scrip­tions weighed on TV providers’ stocks Thurs­day.

AT&T said it lost 90,000 video sub­scribers in the U.S. in the third quar­ter. It’s a steeper drop than the same pe­riod last year, even though gains from its newer, cheaper on­line ca­ble­like ser­vice, DirecTV Now, are in­cluded. DirecTV Now wasn’t avail­able in the July-Septem­ber quar­ter in 2016.

DirecTV Now added 300,000 sub­scribers in the quar­ter, so AT&T lost about 390,000 satel­lite TV and cable cus­tomers.

AT&T, which is also the No. 2 wire­less car­rier in the U.S., blames tough com­pe­ti­tion from both tra­di­tional TV providers like Com­cast and newer dig­i­tal-video ser­vices like YouTube TV. It also blames the im­pact from hur­ri­canes and stricter credit stan­dards for cus­tomers.

AT&T’s pre­dic­tion, is­sued af­ter the mar­ket closed Wed­nes­day, echoed Com­cast’s fore­cast in early Septem­ber of third-quar­ter losses of 100,000 to 150,000 video cus­tomers due. That would be Com­cast’s largest quar­terly loss since 2014. Com­cast also blamed com­pe­ti­tion and weather.

Ris­ing prices for tra­di­tional TV bun­dles and those grow­ing dig­i­tal op­tions are in­creas­ingly driv­ing cus­tomers on­line and away from tra­di­tional TV.

“It should be clear that DirecTV, like all of its cable peers, is suf­fer­ing from the rav­ages of cord-cut­ting,” Mof­fet­tNathanson an­a­lyst Craig Mof­fett wrote in a Wed­nes­day night note to in­vestors.

Tra­di­tional TV sub­scribers in the U.S. peaked in 2012 at just over 101 mil­lion, ac­cord­ing to me­dia re­search group Ka­gan, and the in­dus­try has shed more than 5 mil­lion cus­tomers since then.

More losses are ex­pected.

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