Signing up and canceling were easy, with no
need for a cable guy to come to your house.
But customer growth has slowed and even
dropped for many of these services as prices
rose and they added more channels, coming
closer to their traditional TV counterparts. AT&T’s
version, formerly known as DirecTV Now, today
AT&T TV Now, has dropped customers for four
straight quarters, losing more than 700,000
subscribers as it rolled off deep discounts.
Research firm MoffettNathanson estimates the
total market at about 8.4 million. There are about
86 million traditional TV households.
“The market is due for a shakeout,”
MoffettNathanson’s Craig Moffett said of
the online-cable substitutes, which initially
charged customers less than they paid for
their programming. When they raised prices,
customers left. “It was a Catch-22 from the
beginning. They were unrealistically priced.”
Sony did not release how many customers Vue
had, but it was seen as a small player. It will shut
down in January.
The industry’s latest hope for a successor to
cable or satellite TV and a counter to Netflix has
now shifted to streaming services, including
new entries from Disney, Comcast and AT&T.
Apple’s version launches today.
Increasing competition for people’s dollars
from all those services will put more pressure
on the online-cable services, said Pivotal
Research’s Jeff Wlodarczak.
“The only way to innovate in pay TV is to try
to follow Netflix,” Wlodarczak said. “You can’t
innovate in pay TV. It’s too firmly ensconced.”