AT&T’s Shrinking Satellite and Cable Business Makes Time Warner Merger More Urgent

AT&T is willing to pay over $100 billion for Time Warner — and fight the Justice Department in court over the merger — so it can help lead the next wave in video entertainment. That future appears to be approaching fast.Last year, AT&T lost almost 1.2 million customers in its traditional pay-TV business, which is delivered through satellite and cable. Over the same time, AT&T attracted almost 900,000 to DirecTV Now, its recent online alternative.AT&T deserves credit for making the pivot to a new over-the-top TV service and pulling in some big numbers. But there’s a price to pay that goes beyond trading one customer for another.The average bill for AT&T’s traditional TV subscriber is nearly $127 a month. DirecTV Now starts at $35 a month.The same trend is underway at Dish Network, a rival satellite provider that lost almost 1 million traditional customers last year while adding over 700,000 to its online product, Sling TV.“This is mostly just varying degrees of bad,” wrote analyst Craig Moffett of MoffettNathanson. “‘Analog dollars for digital pennies’ still applies.”  Continue reading...