Hollywood Reporter: AT&T's Streaming Headache: Why Is DirecTV Now Losing Subscribers?

Discussion in 'DIRECTV General Discussion' started by bobcnn, Feb 6, 2019.

  1. Feb 10, 2019 #41 of 135
    James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    If you already have the latest equipment or don't want anything better than what you have then your equipment needs are met. The customers I was referring to are the ones who don't have the equipment they want.

    And while I'm sure that discounts without further commitments would be desirable to customers why would AT&T|DIRECTV do that? I could see a reward program that gave $5 off after five years of subscription, $10 off after 10 years or some similar scheme - but the larger ($50+) discounts should have a commitment. I'd rather see a "loyal customer discount" for all who qualify instead of giving larger discounts only to customers who ask.
     
  2. Feb 10, 2019 #42 of 135
    slice1900

    slice1900 Well-Known Member

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    Amazon didn't become profitable in their core low margin retail business. They became profitable in cloud computing, which is a fast growing and HIGH margin business. Netflix doesn't have another business to fall back on, and there's no reason to assume they will ever become profitable - they keep ramping up the amount they borrow every year to pay for that content so their cash flow becomes more negative. As long as you can get people to loan you money that works fine, until they won't.
     
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  3. Feb 10, 2019 #43 of 135
    lparsons21

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    Those kinds of discounts would be more in line with the way AT&T does with their cell service though loyalty discounts are not usually just automatically applied at specified times, usually takes a call to them to get them from what I've been told.
    But those that have gotten used to calling in for bigger discounts wouldn't care for that method and I'd bet that most of those that don't call for them and just pay the bill wouldn't change either. The problem for the cable/sat companies is that the cost of their service just keeps going up way too much providing too many channels people don't care about. And while AT&T/DirecTV can publicly talk about how they want the more profitable customers the reality is that the new customer deals right now are quite similar to those in the past. IOW the "premium" customer is just marketing speak.
     
  4. Feb 10, 2019 #44 of 135
    Rich

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    Never gave that any thought. I don't think I've ever heard of someone dumping NF either. Or AP. Or Hulu. But once you use them for awhile it has to be apparent how good they are, why would anyone dump them? Good post!

    Rich
     
  5. Feb 10, 2019 #45 of 135
    James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    Unfortunately Netflix refuses to disclose churn rates and gross additions - relying on net additions and total subscribers as metrics.
    People do leave Netflix ... but it is up to outside experts to guess how many people leave. Estimates range from 5% to 10% per quarter.
    (AT&T|DIRECTV also no longer reports gross additions and churn for their TV services. DISH last reported a churn of 2.1% for their satellite service.)

    Despite Netflix's opinion that “the churn metric is a less reliable measure of business performance, specifically consumer acceptance of the service.” I would say that churn is a good measure of customer stickyness. It is good (for Netflix) that Netflix is replacing the customers who leave with a greater number of new customers. Each paid account helps them pay down their massive debts. But the higher the monthly costs climb the more susceptible they are to the price conscious consumer when the monthly price crosses their individual pain level. Their net growth will level off (if only because they run out of households to serve). And I expect that more people will manage their subscriptions as others have suggested - binge Netflix a couple of months per year and don't pay for the months one doesn't use it.
     
  6. Feb 10, 2019 #46 of 135
    slice1900

    slice1900 Well-Known Member

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    They aren't doing the deals they did back when AT&T first took over, like two year price locks and giving away a $180 Apple TV for subscribing to Directv Now for a few months.
     
  7. Feb 10, 2019 #47 of 135
    dreadlk

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    I seriously doubt those estimates. Five percent even seems high to me but even if I go with that, what does it matter when your customer growth looks like this :)

    Screenshot_2019-02-11 Number of Netflix subscribers 2018 Statista.png
     
  8. Feb 10, 2019 #48 of 135
    dreadlk

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    Yeah I just cannot imagine dumping Netflix. I have at least 4 or 5 series that I am invested in on Netflix and there is no way I am going to miss seeing them. I made the mistake of getting Hulu on Trial basis to let the wife see "The Handmaids Tale" ohh what a mistake, she loves it, so now I am probably going to get stuck with another bill LOL.

    BTW I remember reading an article about the 2 year wait for Game of Thrones final season and some anonymous person at HBO revealed that the management was crapping their pants at the thought of it ending. So they deliberately delayed the last season by one year so that they could start production and make a Prequel series that will be released soon after the last season airs.

    Smart move because about the only reason I ever watch HBO is for Game of Thrones. If I could easily dump it out of my package when the series was over I would, but now the prequel has me interested once again.
     
  9. Feb 10, 2019 #49 of 135
    James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    First: Those numbers are inaccurate. Second: I was talking about keeping customers, not replacing customers. The most telling information is the information Netflix is refusing to share. The "churn" is a bad number ... so they refuse to share. (And if one believes "nobody" ever leaves Netflix they are only lying to themselves.)

    You seem to be ignoring Netflix's growing debt problem. They are consistently going deeper into debt to be able to maintain and grow their customer base. The bubble will pop.

    Netflix is (as most companies do) pushing the positives and not reporting the negative. Even their massive debt is being reported as a positive because they are not as far in debt as they predicted. Under promise and over deliver works with many shareholders. But the bubble will pop.
     
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  10. dreadlk

    dreadlk Hall Of Fame

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    Man you have got to be the only person in the world that I have ever heard say that they think Netflix is going to go bust!
    Unless something drastic happens with the Internet and streaming I just don't see that happening anytime in the foreseeable future.
     
  11. James Long

    James Long Ready for Uplink! Staff Member Super Moderator DBSTalk Club

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    I'm not even the only person in this thread who doesn't see problems facing Netflix. :)
     
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  12. mjwagner

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    LOL...yeah I think we will see something happen to D before we see something happen with NetFlix.
     
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  13. slice1900

    slice1900 Well-Known Member

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    But what keeps you subscribing to Netflix 12 months out of the year? Do you feel like you need to view the new episodes of those series as they come out? That's back to traditional TV viewing, same as people who watch cable/satellite and wait for them to dribble out new episodes. What would prevent you from subscribing for a month, binging on your series, dropping it for a few months, then subscribing for another month and binging again to catch up?

    It is probably just inertia that prevents this for most - it is a pain to cancel and re-subscribe, easier to leave it autobilling each month since the savings would be pretty small. When it is the only service, that's pretty easy to do. But as other services are added to get specific series like the Handmaids Tale, or Star Trek, or that new Star Wars series Disney has, or HBO for GoT and so on suddenly the hassle of turning providers on/off will seem worth it after adding up the yearly savings.

    As for churn, Directv reported a churn of around 18% for years, and similar for Dish, even during the time when they were growing subscribers. Growth doesn't mean there is no one leaving, it only means more people are joining than are leaving. When those numbers turn around, as they recently have for both Directv & Dish, then that means subscriber losses. There are still well over two million new subscribers each year for Directv satellite, its just that they used to have over three million joining which is why they lost a million total in the past four quarters.

    Not sure why you think Netflix is immune to people leaving, I know several people who have dropped it permanently due to loss of content (they subscribed so they didn't have to take the family to the movies, but now the first run movies aren't on Netflix like they used to be) or do the sign up / binge / drop thing.
     
    Last edited: Feb 11, 2019 at 9:15 AM
  14. Rich

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    I struggled thru The Handmaid's Tale. My wife spends a lot of time on social media and thinks anything the Third Herd is raving about must be wonderful. But, we do find lots of content on Hulu. The PQ leaves something to be desired. Navigating thru Hulu is a trip.

    Rich
     
  15. CraigerM

    CraigerM Well-Known Member

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    I am thinking about giving Netflix a try to see what happened after the cliffhanger in Lucifer.
     
  16. compnurd

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    We have been watching the Crown.. Pretty Good
     
  17. inkahauts

    inkahauts Well-Known Member

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    There is a very very large issue that isn’t shown with these numbers...

    First people probably come and go month to month more on Netflix than most cable services. I wouldn’t be surprised if their churn is over 10%. That’s a massive problem down the road.

    It doesn’t appear to be a massive problem today because it looks like they are growing. But look closer, they are adding markets and availability of the service so of course there is growth. The question is what’s the growth rate where they are already established like here in the us?

    It looks like their total add is around 1.5 million recently in the us. That’s on over 50 million subscribers. And add in the decline in dvd service which has lost 9 million in the last five years as people converting to streaming. It adds up. If they are losing say 3 million and adding 4.5 million each quarter that’s extremely dangerous as their programming is diminishing very fast over the next two years and it’ll cost them even more money to keep the volume of content up. If the volume of content drops their subscribes will start dropping a lot. And then they will be spending more money for the same customers. They likely will start seeing a slow down in a couple years in additions other than new markets and that’s a huge issue when you are blowing through cash to creat content like they are.

    Cable will be around long after Netflix is gone and something else has over taken it because Netflix is no different than a studio where as cable is a pathway. You always need the pathway. But who’s using it can easily change.

    There is a reason no one has bought Netflix or even really discussed it. Because it’s sustainability is questionable at best for 10 years.
     
  18. slice1900

    slice1900 Well-Known Member

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    I think it is more because it would cost too much for all but a handful of companies to afford. There's a reason you keep reading rumors about Apple buying Netflix, because they are one of the few who could (but mostly because Wall Street M&A types drool at the billions in fees such a huge deal would generate)

    The idea of paying $150 billion to acquire a business that's cash flow negative is ridiculous though - if they wanted to commit $150 billion to become the streaming leader Apple could pay tens of billions to get exclusive content which they'd offer free to anyone who owns an iPhone, iPad for Apple TV for a decade and come out way ahead!
     
  19. bjdotson

    bjdotson Legend

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    I signed up for Hulu just before Christmas. They had a black Friday sale; a year of Hulu for 99 cents a month with no commitment. I have used it a couple of times (finally watched firefly) and my wife has watched a couple of programs. Think it is so-so Have had Netflix for a few years (my wife is hooked on it) Had amazon prime due to my son's student account while he was eligible, never really used prime video because it was such a nightmare to find shows.
     
  20. Getteau

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    The lousy interface is the main reason I rarely open the Amazon app, let alone watch anything on Amazon. With Netflix, if I see a movie, I know I can watch it. With Amazon, if I see a movie, 99% of the time that move isn't included with prime and I would need to buy/rent it. I know their business model is to try and make people rent/buy, but the whole experience would be 100% better if I could flip a switch and only see Prime content. If I search for something and it's not there, then I can flip the switch to see non-Prime content. However, give me a clean interface without all the stuff that isn't available. If they were to do that, I'd probably open the app more often. Especially when the content between Netflix and Amazon Prime is pretty much identical.
     
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