The telecom giant started notifying customers Tuesday morning of the change. According to a company website, current DirecTV Now customers won’t need to do anything as the change takes effect. “Your service will continue without a hiccup,” the company said in a message to customers. “Your app should update automatically, and you’ll use the same sign-in info for the AT&T TV app.”
The rebrand comes as the company continues to see steep losses in pay-TV subscribers four years after it acquired DirecTV for $48.5 billion. In the second quarter, AT&T reported last week, DirecTV and U-verse cable systems lost 778,000 subscribers and DirecTV Now shed 168,000. Launched with great fanfare in late 2016, DirecTV Now offered a “skinny bundle” of channels, delivered through the internet, and it quickly gained subscribers. But after steep price hikes, it has moved in the other direction in recent months, and now has about 1.3 million subscribers. Internet-based rivals from Hulu and YouTube have squeezed DirecTV Now and Dish Network’s Sling TV.
AT&T said the pay-TV subscriber losses had been expected, and since acquiring the satellite operation the company has articulated a strategy to convert its subscribers to digital and eventually 5G customers. The company has also been launching new video services such as AT&T Watch, a basic bundle, as well as an IP-delivered service called AT&T TV, an attractively priced, “thin-client” offering, is currently in beta.
CEO Randall Stephenson talked up AT&T TV on the company’s recent earnings call. “AT&T TV, you should assume, this will be the workhorse over the next couple of years,” he said. “And we will put our shoulder and our muscle behind AT&T TV, get a lower price point, shore up this customer base over the next couple of years.” He called DirecTV a “good product,” saying it will “be there for a long time.”
In a statement Tuesday, the company said, “As previously announced, we plan to introduce the AT&T TV brand later this summer. We are simply aligning the DirecTV Now experience under the same brand family. The DirecTV Now product remains unchanged. We continue investing to enhance our satellite experience and that brand remains unchanged today.”
Meanwhile, carriage disputes this month with CBS stations in 14 markets and Nexstar-owned local stations in 120 markets have resulted in those stations going dark across AT&T’s systems. Wall Street analysts see the company attempting to “bend the cost curve,” disrupting the long-established pattern of carriage fee increases demanded by programmers as linear ratings continue to ebb.
HBO Max is another corporate priority for AT&T. The WarnerMedia streaming service, which will launch next spring, is a subscription offering that will include all current HBO content plus titles from Warner Bros., TNT, CNN and many other WarnerMedia units. Pricing and programming details are scheduled to be revealed in the fall.