29 April 2019

Financial Reporting Changes for AT&T, Comcast 1Q19

One of the little joys -- at least one of my little joys -- of reading the earning releases of the pay TV companies is watching when the metrics change (and how precious little reporting there is of it in the trade press).
No longer U-Verse and DirecTV subscribers, they are now "Entertainment Group premium TV" subscribers
Starting with this quarter, AT&T decided not to report separately the number of DirecTV and U-Verse video subscribers, despite the fact that the platforms are entirely different in terms of technology, programming, relationship to a broadband service, ARPU, and just about everything else. It did report that it lost 544,000 "premium TV" subscribers, but did not feel a need to break those out between the platforms, both of which have long operating histories. It did feel a need to provide that detail for its DirecTV Now business (lost 83,000 subscribers), although its ARPU is lower, its operating history is much shorter period, and its results are much more erratic. What does this lack of information mean mean? Lack of detail usually means that the story is not good. For the curious, AT&T's earnings call shed no light on this topic. Also, premium TV is usually the term of art for another offering of the multichannel landscape, the category led by another AT&T unit, HBO.

Comcast also eliminated one of its usually-reported cable video metrics this quarter. Alone among cable operators, Comcast reported "Advanced Services Customers" -- customers which had either an HD set-top box or a DVR or both. At least, Comcast had reported this number, which represented 70.4% of video subscribers at year end 2018. For 1Q19, this number is gone. Unlike the AT&T story, the Comcast change more likely highlights that the concept that HD is an "advanced service" is, to be kind, a little outdated and with the likes of YouTube TV bundling a somewhat-constrained DVR in its base consumer offering, a Comcast DVR is looking a lot less "advanced" than it once was.

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