On their earnings call today, AT&T Communications CEO John Donovan shared that they are considering a skinnier bundle for DIRECTV NOW.
Content is the largest and fastest-growing cost of any video offering. We’re evaluating our channel lineups and taking a fresh look at how we can align content cost with the price. It’s also about what customers want. And many want smaller, value-based video packages.
While few details were shared, some speculation is that this could lead to an option with a lower entry price with bundle add-ons similar to Sling TV.
The service has grown very rapidly reaching 1.85 million subscribers in less than two years. It has come at a great expense though, both in terms of promotions — like their free Apple TV deal — and content which has the most Top 35 Cable Networks of any service.
We made the strategic decision to rationalize our promotions and special offers for DIRECTV NOW. We’re taking a more tailored, data driven approach. Specifically, we focused on reducing promotions for low value, high churn customers.
The pullback in promotion has already impact the service’s growth. While they added 49,000 subscribers this quarter, they saw an 85% decline in net additions compared to the previous quarter.