Sources: DirecTV Now lost 3K customers in February while growth in March was roughly flat
New subscribers to web-TV service have slowed in early 2017 — AT&T CEO: We've ‘pulled back’ on marketing after fast start — AT&T Inc.'s live online video service, DirecTV Now …
Context & Ripple Effects
DirecTV Now launched on November 30 and immediately became the whole story of AT&T's video business: an SEC filing showed the service drove all of AT&T's 200K+ paying video additions in Q4, far ahead of the ~61K analysts expected, even as total quarterly revenue slipped to $41.8B. The launch was fueled by heavy promotion, which is exactly what is now being withdrawn.
By February the engine stalled — sources report a net loss of about 3,000 subscribers and roughly flat growth in March, with AT&T's CEO conceding the company has 'pulled back' on marketing after the fast start. That makes the early-2017 slowdown the first test of whether DirecTV Now's momentum was demand or discounting.
First-order effects
- AT&T loses the one video metric that was moving in the right direction: the Q4 surge 'entirely driven by DirecTV Now' goes flat just as marketing spend comes down, leaving the record 385,000 traditional pay-TV losses unmasked in the combined video numbers.
- The CEO's admission that AT&T 'pulled back' on marketing reframes the launch numbers as bought growth, raising the bar for how investors read every future net-adds figure.
Second-order effects
- AT&T faces the classic vMVPD squeeze: restart promotions to keep subscriber counts rising, or hold price to protect margins — a trade-off that later resolved into a $5 price hike that cost the service 267K subscribers, 14% of its base in a single quarter.
- With wireless carrying the revenue story ($39.7B in Q3, down YoY), continued video erosion strengthens the case for the Time Warner acquisition as AT&T's pivot from distribution to content ownership.
Third-order effects
- If the pattern holds — discounted launch, promo-fueled adds, stall, price correction, churn — virtual pay-TV becomes a low-loyalty commodity where subscriber counts are rented rather than owned, forcing carriers to justify streaming bets through bundling and content control instead of raw net adds.
- For the broader pay-TV industry, the episode foreshadows consolidation logic: only players with both pipes and programming can absorb streaming-margin pain, pushing smaller distributors toward exit or partnership.
The trend: Carrier-launched streaming services are proving to be promotional instruments whose subscriber growth evaporates once discounts and marketing recede, exposing the underlying decline of traditional pay-TV.