This news comes as the investment group Elliott Management announced it now owns $3.2 billion of AT&T stock and that it’s pushing for AT&T to sell off DIRECTV. According to this long letter, AT&T purchased DIRECTV at its peak, and it’s streaming version DIRECTV NOW (now called AT&T TV Now) has been “poorly executed.” Because of this, Elliott Management is pushing for AT&T to sell off DIRECTV.
Here is the part in the letter from Elliott Management that talks about AT&T:
Beyond the wireless issues detailed above, AT&T has suffered from product issues in other business units that have hampered its ability to remain competitive:
DirecTV Over-the-Top (OTT) Issues: AT&T’s OTT offering, DirecTV NOW (renamed AT&T TV Now), has been poorly executed with delays, technical mishaps, weak customer service and usability issues. Despite describing DirecTV NOW as a replacement for DirecTV, the natural-substitution narrative has not played out. While unsustainably low prices and aggressive promotion did initially help the product scale, the benefits turned out to be very short term in nature. As AT&T raised prices to normalized levels, results rapidly deteriorated. After just two years of existence amidst an otherwise-booming OTT market, DirecTV NOW’s subscriber count is now declining.
When AT&T purchased Time Warner, the DOJ pushed for AT&T to sell DIRECTV. AT&T fought that demand and won a court case for people to be able to keep both DIRECTV and Time Warner. Now it seems that AT&T wants to keep DIRECTV but is looking for options to turn around growing subscriber losses.
Many have speculated that AT&T plans to use DIRECTV to push new subscribers to AT&T TV and HBO Max. Selling it now would limit AT&T’s ability to push its new, more profitable streaming services.
This is breaking news more to come soon.
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