AT&T Met Q2 Revenue Goals Despite TV Subscriber Losses

AT&T expects streaming to play a significant role in its future operations despite the slight decline in HBO subscribers.
Game of Thrones "The Bells"
"Game of Thrones"
Helen Sloan/HBO

AT&T met its Q2 revenue goals, despite subscriber losses at HBO and DirecTV. The company saw a 778,000 net loss in DirecTV satellite and U-verse customers, while AT&T’s DirecTV Now service lost 168,000 subscribers. The earnings report came nearly a week after DirecTV subscribers lost access to CBS programming due to contract disputes with AT&T. HBO also saw a 0.9 percent decline in subscription revenue, though the platform’s overall revenue went up 3 percent.

Though AT&T saw notable losses in television subscribers, it’s hardly the only company struggling in that area as consumers are continuing to cut their cords in favor of streaming services. The company’s earnings were nonetheless more optimistic than those of streaming rival Netflix, which reported a loss of 126,000 U.S. subscribers in its Q2 earnings call last week.

AT&T CEO Randall Stephens told investors that streaming would continue to be a significant focus for the company as it prepares to launch its upcoming HBO Max streaming service next year.

On the television front, WarnerMedia received 191 Emmy nominations earlier in July, including 137 Emmy nominations for HBO. The platform’s “Game of Thrones” broke records with its 32 Emmy nominations. AT&T CEO Randall Stephens told investors that HBO’s momentum would carry into 2020 when the company launches its upcoming HBO Max streaming service.

Although a concrete release date for HBO Max is still up in the air, the company said it would launch in the spring. Previous industry chatter suggested that the upcoming streaming service could launch at a price point of $16-$17 per month and bundle HBO, Cinemax, and a library of Warner Bros. films and shows. AT&T is expected to share more details about the service during an event at the Warner Bros. lot in Burbank on October 29.

The new HBO Max details will arrive during a particularly busy time for streaming services. Apple and Disney+ will be launching their own streaming services around that time and NBC is expected to release its own streaming service sometime in 2020.

Despite the subscriber losses, WarnerMedia was still the conglomerate’s fastest growing division in Q2. AT&T reported that HBO’s revenue was up 3 percent in the quarter, while WarnerMedia’s revenue increased by 5.5 percent to $8.35 billion. The company cited several of its successful films in the quarter, including “Pokémon Detective Pikachu” and “Shazam!” and also noted success in the video game market with “Mortal Kombat 11.”

AT&T reported $44.46 billion in revenue in Q2, which was slightly higher than Wall Street’s expectations of $44.85 billion.

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