AT&T Explores Parting Ways With DirecTV (wsj.com) 59
According to The Wall Street Journal, AT&T is exploring parting with its DirecTV unit as customers are leaving the service in droves. From the report: The telecom giant has considered various options, including a spinoff of DirecTV into a separate public company and a combination of DirecTV's assets with Dish Network, its satellite-TV rival, the people said. AT&T may ultimately decide to keep DirecTV in the fold. Despite the satellite service's struggles, as consumers drop their TV connections, it still contributes a sizable volume of cash flow and customer accounts to its parent. AT&T acquired DirecTV in 2015 for $49 billion. The company's shrinking satellite business is under a microscope after activist investor Elliott Management Corp. disclosed a $3.2 billion stake in AT&T last week and released a report pushing for strategic changes. Elliott has told investors that AT&T should unload DirecTV, The Wall Street Journal has previously reported.
Jettisoning DirecTV would be an about-face for Mr. Stephenson, who billed the acquisition of the company as a bold move to diversify beyond the wireless phone business and tap into a growing media industry. The deal made AT&T the largest distributor of pay TV channels, ahead of Comcast. DirecTV is now part of an entertainment and consumer wireline unit that made up 27% of AT&T's $173.3 billion 2018 revenue. For Mr. Stephenson, who has helmed AT&T for 12 years, parting ways with DirecTV would be an acknowledgment that a major cornerstone of his diversification strategy hasn't gone as planned. It also adds pressure for AT&T to deliver on the promise of the Time Warner deal. Mr. Stephenson has signaled he is prepared to step down as CEO as soon as next year, the Journal reported last week. The Journal goes on to say that AT&T may ultimately decide to keep DirecTV because of "AT&T's towering net debt load, which stood at more than $160 billion earlier this year. The cash generated by the pay-TV giant has helped pay down that debt and fueled other investments in the rest of the company."
"Any spinoff of DirecTV would be unlikely until mid-2020 at the earliest, five years after the deal closed, to make it a tax-efficient transaction for AT&T," the report adds.
Jettisoning DirecTV would be an about-face for Mr. Stephenson, who billed the acquisition of the company as a bold move to diversify beyond the wireless phone business and tap into a growing media industry. The deal made AT&T the largest distributor of pay TV channels, ahead of Comcast. DirecTV is now part of an entertainment and consumer wireline unit that made up 27% of AT&T's $173.3 billion 2018 revenue. For Mr. Stephenson, who has helmed AT&T for 12 years, parting ways with DirecTV would be an acknowledgment that a major cornerstone of his diversification strategy hasn't gone as planned. It also adds pressure for AT&T to deliver on the promise of the Time Warner deal. Mr. Stephenson has signaled he is prepared to step down as CEO as soon as next year, the Journal reported last week. The Journal goes on to say that AT&T may ultimately decide to keep DirecTV because of "AT&T's towering net debt load, which stood at more than $160 billion earlier this year. The cash generated by the pay-TV giant has helped pay down that debt and fueled other investments in the rest of the company."
"Any spinoff of DirecTV would be unlikely until mid-2020 at the earliest, five years after the deal closed, to make it a tax-efficient transaction for AT&T," the report adds.
If customers are leaving. (Score:2)
If customers are leaving, maybe it's time to look at the business model and why they are leaving.
But my bet is that the content provided is too crappy for what the customers get when they pay for it, and I suspect that the ratio of too much crappy ads and too little content is the problem.
A lot of people are probably getting their content on YouTube and other streaming services instead with a lot lower ad volume spamming them.
Re: If customers are leaving. (Score:2)
The problem is the pricing and bundles are not ret by the retailers. Asshats like Viacom have more to do with this than anyone. Theyre the ones forcing you to spend all that money to support shit like Toddlers & Tieras. Want to sell comedy central and nickelodeon? Well you cant unless you also pickup 5 MTV channels, VH1, 4 BET channels, TVLand, and SpikeTV
Re: If customers are leaving. (Score:5, Insightful)
That's always been the case and isn't what's killing DirecTV.
The problem is that satellite TV is a big up-front investment and pricing is difficult. For years they have been pricing to be competitive with cable and now cable is being undercut by streaming. They are now in a situation where they have to price their service at the cost of content, plus overhead, plus paying back their investment to put up the satellites (and save for the next gen of satellites). The content isn't the problem - all of their competitors are on the same playing field they are (except perhaps Disney). If they lose half of their customers, they can let go half of their call center staff, but the satellites don't get cheaper, so every subscriber bears a larger infrastructure burden. They either have to eat the loss or raise prices - which causes people to leave and makes the problem even worse. There really isn't a good way out of this cycle.
Cable providers have it better. The worst case for them is that they get into a different business - providing the last-mile for streaming access. Their infrastructure is valuable for the foreseeable future. Satellites works fine for fixed-programming broadcasting, but not so much for on-demand viewing.
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Their real problem is that customers don't want a road that only goes to the cable company any more. We want off the plantation, and they don't own us. But they sure think they do. As long as they think they can control us, they won't even try to give us what they want.
Anything that helps run ATT into the ground is good for humanity, so i hope they hang onto DTV forever.
Re: If customers are leaving. (Score:4, Insightful)
mostly price... If I cant spend $35 or less a month I dont want it. Dont care if you offer me 65 channels or 165 channels, its mostly shit anyway. At most I watch 3 or 4 different channels, none of those live, and rarely more than 3 to 4 hrs a week. None of that viewing habit can justify the pricing packages they offer. If you want AMC, or food network, or TNT, you're pretty much stuck buying 65+ channels. This is why streaming is so popular in the first place, but even they are subject to this stupid bundling crap. I cant wait till they go out of business from all the cord cutters. Honestly the only thing that keeps these assholes in business is all the damn sports freaks. They shell out insane money to get all the sport channels. If it wasnt for people buying season pass purchases to get 47 ESPN or similar channels, this would have come to an end a long time ago. I'd pay $25/mo for a pick-15 plan. Pick 15 channels, i dont even care that they arent the premium ones like hbo, they sell those as add-ons anyway.
Btw which ATT? SBC out west kept buying up other iLECs and eventually changed their name to ATT, which swallowed up damn near all of them, and then there is ATT Wireless, which was Bellsouth wireless, who eventually renamed themselves Cingular, before becoming ATT Wireless. they have different OCN and different SPIDs when filing with the FCC. In the landline side of things its a nightmare. The ATT in Louisville is a completely different group than the ATT right across the river in Indiana. In louisville its the old Bellsouth stuff, same systems, same equipment. Across the water is Ameritech. Its still a nightmare to order a fiber circuit between the two locations even though they pretend to be all one happy family.
IF you think thats bad you should deal with Windstream. There is Windstream the iLEC in several cities, there is Windstream formerly NuVox, Windstream formerly Norlight, and Windstream formerly Paetec, and thats just in my region. Im sure they swallowed others.
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This probably explains why "DirectTV Now" was renamed to ATT Now. That was the streaming company. If you are an ATT Wireless customer on an unlimited plan, they comp you a free Lite bundle of 30 channels as well as a pick-1 between HBO, Pandora, and i think it was showtime, i cant remember. Its good for only a single stream session but I dont really watch that much and kids pretty much stick to netflix or youtube when they arent playing shit like robloks. all-in-all its not too bad. Avoiding another $30-$5
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Declining subscriber county is a huge problem for DirecTV.
Big expenses are not unique to satellite. The infrastructure of a cable tv system can be quite a bit more than a satellite tv system. I you look at the numbers the cost of investment in Cable TV infrastructure is vastly more per potential subscriber than a few satellites in orbit. Cable TV systems are an immense investment and far more expensive and vast per subscriber than a few satellites in orbit. Cable TV can suffer from the same problems as sate
Re: If customers are leaving. (Score:2)
but the satellites don't get cheaper
I don't know the industry, but I suspect this isn't the case. Much of the cost is in putting that bird in the sky, and SpaceX has been putting a lot of downward pressure on the pricing here. In addition to that, the technology for high bandwidth data over wireless keeps improving. I think most of the cost is probably in the consumer gear needed, and the labor costs of installing the equipment. Cable companies don't have to deal with that aspect as much since most houses built in the last 40 years come pre-w
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I don't quite understand why installing satellite television hasn't gotten simpler. I mean you can put satellite TV on a boat or a motorhome and the antenna system is self-stabilizing and locates the bird on its own. Obviously in a mobile environment, this constant tracking requires much more complex equipment, but since houses are stable, couldn't this be much more simplified while still perfectly automating the process?
The next strike against satellite is antenna to set-top cabling. Why not come up wit
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Cable/satellite TV is dying. People are leaving, but, it's happening slowly enough that the CEOs of AT&T and other companies can just pretend that everything is fine. By the time things collapse, they will have cashed in their billions and retired.
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No, most probably what's happened is that either the allegations in the recently filed class action lawsuit are true and those numbers were artificially boosted by signing up people without their consent and by misleading them Wells Fargo style or then cord cutting has started hitting their bottom line really badly. My personal gut feeling that it's a combination of t
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It's like when AT&T bought Alltel. Yes, Verizon bought Alltel, but not in New Mexico - it
Shouldn't have "diversified" to begin with. (Score:5, Insightful)
And they were buying totally unrelated businesses?
Now they own a bunch of TV content and still don't know how to deal with it. They can't get those working with their own streaming service, so naturally they're coming out with MORE streaming services.
Elliott has a lot of work in front of him if he wants to set AT&T straight.
It's raining, it's snowing. No clear sight to sat (Score:1)
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YMMV. Rain fade was common enough for me to be annoying, and even 15 minutes can ruin a show.
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Bananas on football fields. It only has to ruin one minute of a show to ruin it if it's the right moment. Then I'm no longer invested and want my time back, but you can't have it back. Best just not to watch via such an unreliable method. Meanwhile, if my cable satellite connection goes out for a minute, streaming playback pauses.
Broadcast television, even cable broadcast, once seemed awesome. Now it just seems pathetic.
What else is pathetic is that we're still not using multicast IP for this. They could gi
Re: It's raining, it's snowing. No clear sight to (Score:2)
There's more to it than that. Cablecos are heavily invested into coax, which means coax wired to multiple rooms in every house, in addition to massive inventory of coax based cable boxen. If they started rolling out IP based stuff there'd not only be all of that equipment to replace, but all of that new cabling to do. Sure, they could do WiFi, but in many places that's almost guaranteed to perform like shit.
In fact there isn't even any plan to transition, believe it or not. I can't speak for every market, b
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It's really four things:
- Alignment
- Obstruction free view of the sky
- Solid dish mounting
- Dish kept free of snow or other debris
Ten years of DirecTV costs pretty close to $20k in monthly bills. Putting five hundred into a proper installation is worth it. The third one gets people - when it rains it's often windy and sometimes the dish shaking in the wind is causing most of the problem.
Re: It's raining, it's snowing. No clear sight to (Score:1)
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I've had DTV for 14 years. When I get rain fade, which is RARE, it lasts at most 15 mintues. GTFO with your BS lack of knowledge. Don't post about things you have no understanding of.
I have Dish and rain fade happens a couple times a year here with Missouri thunderstorms for 15 minutes to a couple hours at least two or three times a year. It has been the same with my old Dish installation and a new one in an improved location.
This is rather annoying since satellite TV could otherwise be useful for keeping track of hazardous weather. As it is, it is worthless for this.
I left DirecTV for two reasons (Score:5, Informative)
First reason, I fucking hate AT&T. They have fucked me every time I have done business with them over the last 30 years. I will not give them money under any circumstances ever.
Second, DirecTV like to jack your bill up without telling you. You then need to call them, threaten to leave 6 times, speak to a retention specialist and then suddenly, out of thin air your bill is a fraction of what it once was. Our bill went from 45$ a month to 140$ without so much as an email saying it would happen. We called and within an hour our bill was suddenly back to 45$ but no refund on the monthly 140$ they already charged us. My wife told the guy to go fuck himself, something she NEVER does. We canceled on the spot and haven't looked back.
Their hostility to their own subscribers is why people are leaving. The monthly loss of channels due to "negotiations" their billing practices, their bundling of shit I dont want to watch and making me pay for it just so I can watch the shit I do want to watch............ man is there a worse business model than this because I struggle to think of one.
Literally paying for shit we don't want can only go for so long before we pull the plug.
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Sure, it may be defined in a contract and used industry wide but it is still an anti-consumer process. It is a strange system in which you punish the loyalty of your customers.
The only reason people deal with it is because it is frustrating to change services every year.
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Second, DirecTV like to jack your bill up without telling you. You then need to call them, threaten to leave 6 times, speak to a retention specialist and then suddenly, out of thin air your bill is a fraction of what it once was. Our bill went from 45$ a month to 140$ without so much as an email saying it would happen.
I'm no fan of AT&T either but it sounds like your promotional period ended. The end date is stated right there in the contract so no email is necessary. An email would be a nice courtesy but since when is this company courteous to its subscribers.
Yes, the first time is the ending of the promotional period. They are all too happy to not tell you when it's coming up because they know that no one checks their bill every month. The second time was a verbal promotion, over the phone, then the third, then the fourth and on and on. At some point, it's no longer a promotion but a shake down scheme meant to extract money from you that is 3-5 times higher than you were paying, refusing to give it back but negotiating for a lower monthly as another "promotion"
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Has DirecTV always been significantly worse than Echostar, or is this a result of the AT&T buyout?
From my experience, DirecTV use to have the better signal and experience compare to Dish/EchoStar. But since the buyout by ATT, the whole experience has been terrible. Their boxes crash all the time, it’s slow to change channels. They never had rain issue previously but recently if it rains hard it would lose signal. Maybe they shouldn’t have outsourced their programming to FPT.
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It's tempting to assume that if Comcast, DirecTV, et al, are not doing this, then this means Dish is the outlier that's doing something commercially foolish, but they don't seem to be having any problems right now -
As far as I can tell, they all operate with practically the same customer side practices and pricing.
The option I am facing now is to drop dedicated phone service to get a pay as you go phone plan beholden to nobody, which I have done. And then switch between cable and DSL internet service yearly as the promotional prices expire with no video or phone service.
A third option for internet would be nice but does not exist in my area.
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The big thing that killed it for me was the head of DirectTv telling Tivo that they didn't like paying them license fees for the boxes and that they would com
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I really hate what they did to TiVo too. Crippling the on-demand features just to try to force users to their own Genie product, then instructing the call center workers to lie about it is just plain wrong.
ATT has taken a screw them all attitude. (Score:4, Insightful)
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Golden parachutes work in orbit. (Score:1)
Nobody would buy DirectTV for a price ATT's price (Score:4, Insightful)
Because it is now worth so much less than what Stephenson paid for it. ATT will only be able to unload this under new mgmt which is willing to say the old mgmt were idiots and we never should have bought it. Old fashioned sat service was already looking obsolete even when ATT overpaid for it.
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As far as I could tell (having been a wire-line customer of SBC since before they bought out most of the baby bells and what was left of the old AT&T), this was because for whatever reasons, it was taking them too long to deploy Uverse. For a couple of years they were offering DirecTV for DSL (and mobile too, I think) subscribers, because back in the '0xs cord-cutting wasn't a big thing yet, and that was the only way they could make up for it. And satellite has the advantage of low cost for installation
I haven't watched "TV" in 30 years. (Score:2)
Full disclosure: I'm 56, and remember the days of watching TV... on a TV.
We don't have TVs anymore. We have Big Ass Monitors. There really aren't TV shows anymore. There are movies and video programs. Frankly, there's not much worth watching anymore in my opinion. Not because I'm "some old dude", but seriously, Hollywood is commoditizing "entertainment' into unwatchable time-wasting nonsense... or foolishly remaking stuff from 30 or more years ago that was already good enough.
As for me... I watch the rar
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Merge with Dish (Score:1)
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That was 2002, when the satellite TV market still looked promising. In 2019, it's an industry in decline, and regulators might see the merger as necessary to keep satellite TV alive. In addition, the feds could make giving up bandwidth / satellite slots a condition of the merger and auction off the resultant capacity.
Satellite TV does not have enough pricing power to double their fees; it would be too easy for cable companies to undercut doubled prices.
Another Sucker (Score:3)
In other words AT&T is looking for another sucker to unload this steamy loaf on. Good luck with that, but I have no doubt they will find some one that was "born yesterday." Might have helped if AT&T hadn't run the company in to the ground. Then after that they bought in a piledriver....
People are leaving (Score:1)
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Doing Business with AT&T (Score:2)
I have DirecTV and have a few problems, but my only alternative is cable and Comcast is worse. They can't even deliver HD content.
DirecTV was number one is customer service for years. AT&T broke that. I HATE doing business with them, only to Wells Fargo is worse.
I had a $100 subscription with every channel. Channels keep disappearing and the price is now $180, and I have no Premium channels.
American TV is dreadful. Silly plots full of silly plot holes. Comedy that isn't funny.
The broadcasters keep
When you have "Telegraph" in your company name (Score:3)
Bear in mind the FCC decision on cable competition (Score:3)
Bear in mind the FCC decision on cable competition was predicated on satellite TV being ubiquitous [broadcastingcable.com]. So basically what's happening is the cable companies needed DirecTV's existence to prove they faced competition, and thus escape regulation. Once that declaration was made and sealed in court, a cable company bought DirecTV, bled it dry, and is now preparing to jettison the dried up husk.
This is why AT&T never should have been allowed to purchase DirecTV. Because that gave them fingers in both pies, they don't care what happens to the weaker service. People leaving DirecTV most likely end up signing up for cable TV, so represents minimal loss to AT&T. That gives them little to no incentive to operate DirecTV rationally nor profitably.