Subscriber growth at DirecTV Now apparently stalled in March, capping a tough period for AT&T’s video streaming service after it lost users through February.
Sources told Bloomberg DirecTV Now, which launched at end-November 2016, had signed up 328,000 subscribers by end-January, but is now struggling to retain those users and attract new customers. Some 3,000 users quit the service in February, while growth in March was flat, the news outlet reported.
At a recent investor conference, AT&T CEO Randall Stephenson said DirecTV Now initially “caught fire” after the launch, adding about 200,000 subscribers in December. However, the growth was “much faster than we were wanting to go… And so, we’ve kind of pulled back.”
AT&T, which acquired DirecTV for $49 billion in July 2015, tried to attract customers by offering the service for an initial price of $35 a month offering over 100 channels for its mobile subscribers. In addition, DirecTV Now streaming doesn’t count against mobile users’ data allowances.
However, the monthly price for 100 channels today stands at $60, with a $35 option offering around 60. Other potential reasons for the slowdown in subscriber growth is a lack of key channels including CBS and local broadcasts in many cities. DirecTV Now also faces competition from rivals including YouTube and Hulu.
While cord-cutting is on the rise, with 732,000 leaving traditional pay TV subsciptions in Q1 2017, not all of them sign up for online services. In the same quarter, services including Sling TV and DirecTV attracted 477,000 sign-ups, according to MoffettNathanson.
In January it was reported DirecTV Now customers were complaining about not being able to get refunds, with some even filing complaints with the US Federal Communications Commission (FCC).
The demand for refunds was high as DirecTV Now struggled with performance issues and technical glitches.
Customers took to user forums and social media to voice concerns about issues such as freezing and buffering, app crashes and being automatically logged out.