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The big bet Legacy Pay-TV on the Internet offers is losing momentum.
AT & T and Dish Network's pay-TV online services each experienced weak subscriber growth in the first quarter of 2019.
DirecTV Now, AT & T's streaming TV service has lost 83,000 net subscribers over the period, announced its earnings on April 26 – after losing 267,000 subscribers in the fourth quarter of 2018 and 312,000 during of the first quarter of this year. It closed the period with about 1.5 million subscribers, a figure unchanged from a year ago. (AT & T did not release the subscriber figures for its low-cost package, Watch TV, which costs $ 15 per month, versus DirecTV Now's $ 50 from.)
The neighborhood was a bit rosier for Dish's Sling TV, but not much.
Sling TV closed the season with 2.4 million subscribers, about 121,000 more than a year ago, says its May 3 quarterly report. It only gained 7,000 net subscribers, compared to 91,000 in the same quarter in 2018.
The quarter was one of the worst in the world in the United States, according to Rich Greenfield, a media badyst at BTIG Research, on Friday, which dropped on pay-TV offerings.
Traditional pay-TV companies such as DirecTV and Dish are relying on streaming offers to compensate subscribers that they are losing in their satellite TV and other activities. But now, Greenfield found, virtual packages do not cover losses.
Read more: Bundles of digital TVs that promised a cheap alternative to cable are becoming more expensive. The CEO behind a $ 20 pack explains why.
In the first quarter of 2019, the overall net losses of pay-TV services in the United States, including Internet offerings, were 1.02 million, compared to a net gain of 245,000 this year. Virtual television services added only 174,000 subscribers compared to 933,000 in the first quarter of 2018.
Greenfield has tracked most of the major traditional pay-TV services in the United States, including Charter, Comcast, DirecTV, Dish, Verizon, etc., as well as DirecTV Now, FuboTV, Hulu Plus Live TV streaming services, Philo, Sling TV, PlayStation View from Sony and YouTube TV.
The weak quarter is due to the fact that many Internet packages have increased prices to cope with rising programming costs.
DirecTV Now, Hulu Live Plus TV and FuboTV have increased their prices in recent months. Philo, one of the cheapest, has dropped its $ 16 offer in May and only offers its $ 20 package. And, last summer, PlayStation Vue and Sling TV increased the cost of some projects.
At DirecTV Now, the loss of subscribers was linked to the redesign announced in March of its bouquets and list of channels, which increased the cost of its packages of $ 10 per month. It was the second service price increase in less than a year. For DirecTV Now, AT & T is expecting a "decent" second half, said CEO Randall Stephenson, when announcing its first quarter results.
Dish blamed Sling TV's slow growth for increased competition, including that of other streaming TV services, and clashes with AT & T and Univision, which saw the removal of channels like HBO from the service. November.
Traditional pay-TV companies had used Internet offerings to avoid competition from streaming services such as Netflix, offering the ability to watch video anywhere, without a contract and at prices generally below those of the cable. For existing networks such as Disney and Comcast's NBCUniversal, these bundles have also helped preserve the distribution costs levied by the pay-TV providers that distribute their channels.
While on-line pay TV offerings from mainstream TV companies such as AT & T and Dish are wavering, the traditional media brand Viacom has chosen another path.
The company purchased for $ 340 million earlier this year a free streaming TV service called Pluto TV, which derives its revenue from advertising rather than a combination of advertising and subscription fees. Viacom has since launched 14 free channels for BET, Comedy Central, MTV and other brands on Pluto TV. Viacom publishes its results on May 10th.
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