Shares of TV providers drop as AT&T warns of video losses

This Thursday, July 27, 2017, photo shows an AT&T logo at a store in Hialeah, Fla. AT&T said Wednesday, Oct. 11, 2017, that it lost 90,000 video subscribers in the U.S. in the third quarter, a steeper drop than the same period a year earlier. That includes a gain of 300,000 customers in DirecTV Now, an online cable-like service that is cheaper than traditional TV. (AP Photo/Alan Diaz)

NEW YORK — Signs that more people are dropping their traditional TV subscriptions weighed on TV providers' stocks Thursday.

AT&T said it lost 90,000 video subscribers in the U.S. in the third quarter. It's a steeper drop than the same period last year, even though gains from its newer, cheaper online cable-like service, DirecTV Now, are included. DirecTV Now wasn't available in the July-September quarter in 2016.

DirecTV Now added 300,000 subscribers in the quarter, so AT&T lost about 390,000 satellite TV and cable customers.

AT&T, which is also the No. 2 wireless carrier in the U.S., blames tough competition from both traditional TV providers like Comcast and newer digital-video services like YouTube TV. It also blames the impact from hurricanes and stricter credit standards for customers.

AT&T's prediction, issued after the market closed Wednesday, echoed Comcast's forecast in early September of third-quarter losses of 100,000 to 150,000 video customers due. That would be Comcast's largest quarterly loss since 2014. Comcast also blamed competition and weather.

Rising prices for traditional TV bundles and those growing digital options are increasingly driving customers online and away from traditional TV.

"It should be clear that DirecTV, like all of its cable peers, is suffering from the ravages of cord-cutting," MoffettNathanson analyst Craig Moffett wrote in a Wednesday night note to investors.

Traditional TV subscribers in the U.S. peaked in 2012 at just over 101 million, according to media research group Kagan, and the industry has shed more than 5 million customers since then.

More losses are expected. UBS analyst John Hodulik said in a Thursday note that "cord cutting continues to gain steam as streaming TV builds momentum."

AT&T stock fell 6.1 percent to close at $35.86 Thursday. Shares of cable companies Comcast, Charter and Altice and rival satellite TV provider Dish also dropped.

People also read these

Kenny Baker, who played R2-D2 in 'Star Wars,'...

Aug 13, 2016

Kenny Baker, the 3-foot 8-inch (1.1 meter) actor who played R2-D2 in the "Star Wars" films, has died

Olympic fans injured outside arena when camera...

Aug 15, 2016

Seven people were injured Monday when an elevated television camera plummeted more than 60 feet to...

Trial date set for ex-Patriots star Hernandez in...

Aug 16, 2016

A judge has set a trial date in February for former New England Patriots star Aaron Hernandez in...

Rape case from the past casts pallor on 'Birth of...

Aug 17, 2016

Hollywood trade publications are reporting that a woman who accused filmmaker Nate Parker of rape...

DeGeneres defends herself after posting photo...

Aug 17, 2016

Ellen DeGeneres says she's not racist after receiving backlash on social media for posting an...

About Us

The World Insiders brings you exclusive coverage from across the globe in a timely, easy to consume format sourced directly from our regional media partners.

Contact us: sales[at]theworldinsiders.com

Subscribe Now!