AT&T misplaced 617,000 clients from DirecTV and its different TV companies within the remaining quarter of 2020, capping a yr through which it misplaced almost Three million clients within the class, AT&T reported right this moment.

AT&T right this moment additionally knowledgeable the Securities and Alternate Fee that it has taken “noncash impairment prices of $15.5 billion” associated to its ongoing DirecTV debacle. AT&T stated the $15.5 billion prices mirror “modifications in our administration technique and our analysis of the home video enterprise… together with our determination to function our video enterprise individually from our broadband and legacy telephony operations.” This operational determination “required us to establish a separate Video reporting unit and to evaluate each the recoverability of its long-lived belongings and any assigned goodwill for impairment,” AT&T stated.

AT&T stated it additionally logged “prices of roughly $780 million from the impairment of manufacturing and different content material stock at WarnerMedia, with $520 million ensuing from the continued shutdown of theaters in the course of the pandemic and the hybrid distribution mannequin for our 2021 movie slate.”

The fees have been added to AT&T’s This fall bills. As a consequence, AT&T reported a $13.9 billion internet loss within the quarter, in comparison with a internet revenue of $2.4 billion a yr in the past. This fall income was $45.7 billion, down from $46.8 billion yr over yr. The This fall internet loss swung AT&T to a full-year internet lack of $5.4 billion.

“Executives known as the non-cash accounting charge a signal of the pay-TV unit’s getting older standing as the Dallas firm promotes an Web-streaming mannequin that offers its content-production enterprise a direct line to viewers,” The Wall Road Journal wrote right this moment.

“Our largest and single most essential wager is HBO Max,” AT&T CEO John Stankey stated.

Premium TV clients flee in droves

AT&T is all the way down to 16.5 million clients within the Premium TV class that features DirecTV satellite tv for pc, U-verse wireline video, and the newer AT&T TV on-line service. That is down from 17.1 million three months earlier and down from 19.5 million because the starting of 2020.

AT&T has strung collectively a number of years of massive TV-customer losses since early 2017, when it had over 25 million customers within the class. The lack of almost Three million clients in 2020 was an enchancment over 2019, when AT&T misplaced 3.Four million Premium TV clients within the calendar yr.

These numbers don’t embrace the streaming service previously identified as DirecTV Now, which AT&T simply killed off this month. The service dropped from 1.86 million subscribers in Q3 2018 to 656,000 by year-end 2020. Present clients can hold that service, however AT&T is not providing it to new customers.

DirecTV and U-verse clients have been pushed away by years of value will increase and AT&T’s decreased use of promotional presents. That is mirrored in AT&T’s common income per person (ARPU) within the Premium TV class, which jumped from $121.76 monthly at year-end 2018 to $131 at year-end 2019 and $137.64 on the finish of 2020.

AT&T attributed the 617,000-customer loss in This fall to “competitors, decrease gross provides from the continued deal with including larger worth clients and a programming dispute, partially offset by decrease churn.”

Video income down 11.2 %

AT&T reported video income of $7.2 billion in This fall 2020, “down 11.2 % yr over yr because of declines in premium and [online] subscribers, partially offset by larger premium TV ARPU and better promoting revenues in the course of the normal election.” Working bills within the class have been $7.1 billion, leaving AT&T with a revenue of $98 million.

AT&T does not report particular person numbers for DirecTV, U-verse TV, and AT&T TV. However the firm stated positive aspects in AT&T TV streaming subscribers final quarter helped offset losses in DirecTV and U-verse, which means that DirecTV and U-verse collectively misplaced greater than the 617,000 net-customer loss within the Premium TV class.

AT&T stated it’s inspired by the progress of HBO Max, which prices $15 a month by itself however can also be included in varied bundles. “The discharge of Marvel Girl 1984 helped drive our home HBO Max and HBO subscribers to greater than 41 million, a full two years quicker than our preliminary forecast,” Stankey stated.

Promoting DirecTV at a loss

AT&T purchased DirecTV for $49 billion in 2015 however has been attempting to promote the beleaguered satellite tv for pc division for the previous few months. AT&T is reportedly near a deal to promote a stake in DirecTV to TPG, a private-equity agency, however AT&T could keep majority possession of the corporate. Bids for DirecTV have reportedly valued the subsidiary at about $15 billion.

Fiber positive aspects, DSL losses

AT&T’s broadband-subscriber base remained regular at 14.1 million within the quarter. The corporate boosted fiber-to-the-premises subscribers from 4.68 million to 4.95 million in This fall 2020, however it dropped from 8.98 million to eight.74 million in fiber-to-the-node and from 440,000 to 407,000 in its outdated DSL service. AT&T stopped accepting new DSL clients in October 2020.

AT&T stated its This fall broadband income was “$3.1 billion, down 1.Four % yr over yr because of declines in legacy companies partially offset by larger IP broadband ARPU ensuing from a rise in high-speed fiber clients and pricing actions.” Working bills have been $2.8 billion.