DirecTV Now dropped 267,000 subscribers in the fourth quarter, ending 2018 with 1.6 million, down from 1.86 million as of Sept. 30. The company also lost 403,000 traditional DirecTV satellite TV subscribers, but added 12,000 at IPTV service U-Verse. “During the fourth quarter of 2018, including the impact of losses of 267,000 from DirecTV Now, total video subscribers decreased 658,000,” the company said. “DirecTV Now net adds included approximately 65,000 on free or substantially free trials.”
Meanwhile, at WarnerMedia, led by CEO John Stankey, the fourth-quarter earnings contribution reached $2.7 billion as operating income jumped 33 percent to $2.6 billion amid gains across all units. Revenue rose 5.9 percent to $9.2 billion, led by $4.5 billion from Warner Bros. (up 10.4 percent), $3.2 billion at Turner (down slightly) and $1.7 billion from HBO (down slightly).
Warner Bros. in the quarter recorded 29.3 percent growth in theatrical product revenue and 3.9 percent growth in television product revenue, with operating income up 57 percent, driven by the higher revenue that was “partially offset by higher expenses.”
During a morning analyst call, AT&T execs, led by Stephenson, were pressed on how quickly they will pay down their debt load. “Our top priority in 2019 is driving down the debt from our Time Warner acquisition,” Stephenson told investors. Wednesday’s earnings report was AT&T’s second that included a full three-month period of Time Warner, which the company had acquired last year for $85.4 billion.
AT&T execs pointed to free cash flow of $26 billion expected in 2019 as they insisted debt reduction, which is to include non-core asset sales, was “on plan.” Stephenson pointed to strong revenue and profit margin trends at Warner Media.
Strong Warner Bros. box office from Aquaman and A Star Is Born helped lift the studio’s operating income. HBO saw revenue fall slightly due to a carriage dispute with Dish Networks, and Turner, while seeing subscription revenues grow, also had ratings declines offset by higher pricing.