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AT&T Says DirecTV Now’s Streaming Service Has Topped 1 Million Subscribers

One year after launching, AT&T’s DirecTV Now over-the-top TV streaming service has surpassed 1 million subscribers, according to the telco. However, those gains haven’t offset steep pay-TV losses on the satellite and telco side of the house.

AT&T has lured DirecTV Now customers with special promotional pricing and giveaways of devices like Apple TV and Roku players. It remains to be seen if customers stick with the service once the discounts roll off, although AT&T has continued to introduce aggressive promotions for DirecTV Now.

The telco is promising to launch new features for DirecTV Now in the next few months that are currently in beta testing. Those include a cloud-based DVR to record and watch shows “virtually anywhere,” according to AT&T, as well as 4K Ultra HD video, capacity for more than 35,000 on demand titles, individual profiles and “an even better user experience.”

By comparison, Dish Network’s Sling TV — one of the first internet pay-TV services to launch in the U.S. — had 1.7 million subscribers as of the third quarter, according to estimates by Wall Street firm Guggenheim Securities. Sony’s PlayStation Vue had 455,000, YouTube TV was at 325,000, Hulu’s live TV service had 150,000 and FuboTV had around 100,000, per Guggenheim.

As of the end of September, AT&T reported 787,000 subscribers for DirecTV Now. The telco posted its worst quarter to date in Q3 for losses of traditional pay-TV subs, dropping 385,000 DirecTV satellite and U-verse TV customers. AT&T blamed the hemorrhaging on increased competition from pay-TV rivals and over-the-top services, as well as implementing stricter credit standards and “hurricane disruptions.”

Half of DirecTV Now’s customers have come from traditional pay-TV rivals, with 10% from DirecTV or U-verse and the rest representing “cord-nevers,” who have not previously had pay television, AT&T CFO John Stephens told analysts on the Q3 earnings call. He also said the company expects to post a net subscriber gain in its traditional pay-TV biz for Q4 — after shedding 996,000 net subscribers for the 12-month period ended Sept. 30.

To drive subs to DirecTV Now, AT&T has continued rolling out new offers and promotions. Currently, customers who prepay for four months of DirecTV Now are eligible to receive a free Apple TV 4K set-top, while those who prepay for one month can get a free Roku Streaming Stick. Also, timed for the one-year anniversary of DirecTV Now’s debut, new customers can get a $25 credit for their first month of service for any package using the “BDAY2017” promo code.

AT&T also has touted DirecTV Now’s expansion of local broadcast channels, which has topped 200 after the telco added CBS and the CW stations in several markets in September under an agreement with CBS. DirecTV Now offers local channels in nearly 90 markets, delivering at least one local broadcast station in areas representing 80% of U.S. TV households.

Separately, AT&T is engaged in a legal fight with the U.S. Department of Justice over its planned $85 billion acquisition of Time Warner, which it had expected to close by the end of 2017.

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