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  • Did AT&T Lose Pay TV Subscribers Due to Cord Cutting?

    October 25th, 2017

    It’s not surprising that VIZIO has opted to release what they call the “Home Theater Display” instead of a regular TV set. Since most people don’t receive stations via a TV antenna, why include a tuner? Most people rely on cable or satellite. But with pay TV prices rising every single year, more and more people are choosing to go without.

    So why would the carriers up their prices? Well, the entertainment companies want bigger and bigger pieces of the pie, and there have been notable and unfortunate situations where channels were blocked until a contract agreement was settled.

    A common complaint: There are 300 channels and not much to watch. I’ve had this happen to me over the years. These days, I have a low-end cable package with most of the channels I want, and I was willing to give up a few tiers to save money. Some of these shows end up on Netflix anyway, so it’s only a small loss to wait for the seasons to end. I barely have enough time to watch what I want anyway.

    Where I live now, I’m stuck with Cox, the cable company. Over-the-air reception is a non-starter, and the layout of this place makes it impossible to set up a satellite dish without running afoul of the property manager’s tough terms and conditions.

    Some people can exist just with Netflix and a few other services, CBS hopes you’ll subscribe to All Access because they added Star Trek: Discovery and, in fact, they’ve renewed it for season two. One of my son’s friends had a digital antenna, and he is close enough to the stations in Phoenix to get decent reception. He has what he needs without spending a dime beyond the estimated $25-30 cost for the antenna.

    So you expect that the cable and satellite companies are suffering to some extent. According to AT&T’s Q3 2017 earnings, the number of pay TV subscribers dropped by 385,000. It’s not a lot with a subscriber base of over 20 million, but most of it came from DirecTV. How many simply went with Dish Network or the cable company? It’s hard to know unless a customer tells AT&T why they are leaving.

    There’s also an all-streaming service, DirecTV NOW, which offers a subset of the more popular channels from the satellite provider. AT&T has been offering discounts for signups, and, in fact, you can get a pretty good deal with the satellite service if you happen to live in a home where a dish can be installed.

    Now it’s easy to blame most of this on the cord cutting phenomenon. Other TV carriers aren’t doing much better. But AT&T has another problem, although it claims to provide the best customer support in the industry. Unfortunately, I have enough personal experience not to believe a word of it.

    True, DirecTV used to offer pretty decent support. So did AT&T, at least until the two companies combined in 2015 at a cost of $48.5 billion. Typical of large corporate mergers, customer service is often the first to suffer. Almost every time I call them for one reason or another — and I’m just using the wireless service — I get an overseas rep who is barely conversant in English. Don’t get me started about the lame digital voice assistant that answers the phone, and fails to understand even the most simple requests.

    I’ve gone through multiple support loops, talking to one person after another, with disconnects along the way, and I’ve occasionally been forced to reach out to AT&T’s executive offices to find someone who is able to help. It hasn’t been easy. I’ve been tempted to go elsewhere, very tempted.

    In its favor, AT&T is giving me a special discount because I’m a member of AARP. I’m not altogether sure how one qualifies without complaining, but I have been told that you should go to the nearest authorized dealer for guidance. With that discount, which is 20% off the core service package, the advantage of switching to, say, T-Mobile, is no longer quite as attractive. That T-Mobile and Sprint may soon combine is another impediment. Such corporate mergers often bring out the worst in a company.

    But the stories about the loss of pay TV subscribers are probably not going to blame any of it on poor customer service, and they should. Yes, a small number of people are going without for different reasons. A few surveys about why would help clarify the issue.

    Besides, cord cutting may not be quite what it’s cracked up to be, unless you are careful about the number of services you select. The ideal setup would be a TV with a tuner — and you should check the specs — if you live close enough to the stations in your city to get decent reception. But cable TV was originally intended to serve people in large cities with tall buildings that hurt reception, or who live in outlying areas far away from the transmission towers. All the dedicated channels came later.

    With a decent TV antenna, Netflix, and maybe somewhere to rent or buy movies, such as iTunes, and you can have a pretty complete package at an affordable price. If over-the-air reception is a non-starter for you, you might be tempted to add more services, but it’s very easy for things to get out of hand. Too many subscriptions, not to mention the confusion of dealing loads of separate services, may eat up the savings.

    In the meantime, I’m not at all surprised that traditional cable and satellite companies continue to confront a gradual erosion of their subscriber bases. That’s why DirectTV and Dish Network offer dedicated streaming services in order to reclaim some of the lost business, or serve customers who can’t get satellite. It would also help if they considered a la carte offerings, where you picked, say, five from Column A, and six from Column B, and paid only for the channels you want to watch.

    Actually serving the needs of the customer who wants to pay less, and is sick of having 300 channels and nothing to watch, might actually help boost the cable/satellite subscriber base, or at least keep it from dropping any further.



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