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What Does DIRECTV NOW’s Downturn Mean for the Future of Cord Cutting? We Take a Look…

Channel Surfing ManYesterday DIRECTV NOW announced that it had lost 267,000 subscribers in the fourth quarter of 2018. This instantly started a flood of finger pointing that cord cutting is coming to an end. Yet at the same time, DIRECTV and U-Verse TV lost 750,000 subscribers in 2018, cord cutting is still quickly growing.

So why did DIRECTV NOW lose over 200,000 subscribers at the same time cord cutting grew? Let’s look at what likely happened. First, we have to look at why DIRECTV NOW grew so fast.

How did DIRECTV NOW grow so fast?

AT&T spent big when DIRECTV NOW first launched offering steep discounts and great promotional deals to get people to sign up. Recently it was announced that about a year ago 500,000 DIRECTV NOW subscribers paid just $10 a month. AT&T also offered great deals if you prepay for a few months you could get a free Apple TV or Roku. Now, these plans have ended and forced their subscribers on to full priced DIRECTV NOW plans.

These offers clearly lost AT&T money up front, but AT&T did it to quickly build up their subscriber base. Now that these discounts are ending, we are seeing DIRECTV NOW’s subscribers jumping ship.

Why are people dropping DIRECTV NOW?

The number of people dropping DIRECTV NOW seems high even with all of the promotional offerings ending. While it seems even with cord cutting quality of service is still very important as this tweet shows:

It seems that the number of technical issues and lack of customer support has been one of the main reasons people have jumped ship from DIRECTV NOW. Cheap pricing and device offers got people in the door, but lack of customer service and constant outages and glitches pushed people away from DIRECTV NOW.

Where are former DIRECTV NOW subscribers going?

There are likely a few who went back to cable TV. The majority of them are going to other live TV streaming services. Recently it was reported that Hulu has topped 1 million subscribers and YouTube TV reportedly also recently hit 1 million subscribers. Every major traditional pay-TV service that has reported earnings so far this year has announced a drop in TV subscribers.

Cord cutting is still very young and growing pains will happen. Some services will grow while others shrink. Today is DIRECTV NOW’s turn to shrink as cord cutting continues to grow.

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