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AT&T Sees Big Losses with Pay TV, But Gains With DirecTV Now

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Watching the falling fortunes of pay TV providers has become a spectator sport in the online video industry, and yesterday AT&T provided plenty to watch. The company announced it shed 385,000 pay TV subscribers in the third quarter of 2017, although it gained 296,000 (lower paying) DirecTV Now customers. That means an overall loss of 89,000 subscribers, and a drop from 25.92 million video subscribers last year to 25.08 million today. DirecTV Now has 800,000 subscribers.

The company sees its future in streaming, not satellite, and Variety broke the news that AT&T is preparing to offer an Android-based set-top box that delivers only streamed content. Diving into an FCC filing, Variety sees the device—model number C71KW-400—can stream 4K video, comes with a voice-activated remote, and carries no DirecTV Now branding. Rather than being a device for AT&T's skinny bundle, this Android box seems to have been created for the company's upcoming next-generation platform, which will stream all content and should debut early in 2018. It could appeal to people who can't get satellite service, such as some apartment dwellers.

“It should be clear that DirecTV, like all of its cable peers, is suffering from the ravages of cord-cutting,” Craig Moffett, founding partner with MoffettNathanson, told Reuters by email. “It is reasonable to expect a weak quarter for the whole pay TV industry.”

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