AT&T CFO Talks Company’s New Video Strategy, Says Price Hikes Are Coming to an End
It is no secret that AT&T has had a rough time retaining subscribers over ther course of the year. In October, the company reported they lost another 195,000 AT&T TV NOW subscribers in the third quarter and 1.16 million traditional pay TV subscribers between the DIRECTV satellite TV and U-Verse services, leaving AT&T TV NOW with just 1.1 million subscribers, from a peak of 1.8 million last year.
Their infamous price hikes have been to blame for their subscriber loses, but CFO John Stephens assured analysts during the Wells Fargo TMT Conference on Tuesday that those days are coming to an end. “What we’ve done on the customer side is really focused on long-term value opportunities for customers … And so having customers lock in for prices for two years and then have to raise them just to get content cost increases. That’s something we’re getting out of,” he said. “On the promotional side, we’re doing much more focused promotions that will — when you come in — [give] you a good sense of what the pricing is, what the quality of the delivery is …”
Despite the rapid loss of subscribers, Stephens believes AT&T can still gain favor with customers moving forward. “The transition that we’re going through, it’s tough, and we’ll continue to go through for the rest of this year, but we are optimistic,” he stated. “We’ve hit the peak of losses in the third quarter We’re looking for AT&T TV and this — the anniversary of this new intake approach to much more rational product offerings to really help us going forward.”
AT&T is also banking a lot on HBO Max, which launches in May 2020. AT&T is expecting to spend up to $2 billion on HBO Max in 2020 and investing an additional $1 billion in each of the following two years. This is before HBO Max even achieves profitability in 2025. The streaming service, will be “the key aspect of the video strategy going forward,” Stephens stated.