AT&T Inc.

As the largest provider of pay-TV video services with about 23.9 million customers, AT&T uses it size and scale to better negotiate with programmers for content. Still, the satellite video business is very mature and is being threatened by over-the-top (OTT) video services such as Hulu and Netflix. AT&T is sourcing its DIRECTV platform to offer its own virtual multichannel video program distributor (vMVPD) service called DTV Now. But the company has been challenged to find the right balance between growth and profitability. AT&T began offering the service with aggressive promotions and low prices, adding customers at a rapid pace but at the expense of profitability. It subsequently repackaged its bundles and raised prices to stabilize EBITDA. However, this may

...We expect that revenue trends in AT&T's business wireline and entertainment segments will remain weak over the next couple of years. These segments account for about 40% of AT&T's revenue. Despite growth from broadband as the company deploys fiber to the home across its footprint, we expect revenue in the entertainment segment will continue to decline over the next couple of years because of secular industry pressures, customer migrations to less expensive platforms, and aggressive competition in the pay-TV business. At the same time, lower revenue from legacy products more than offsets growth from strategic services in the business wireline segment. As the largest provider of pay-TV video services with about 23.9 million customers, AT&T uses it size and scale to better negotiate with programmers for content. Still, the satellite video business is very mature and is being threatened by over-the-top (OTT) video services such as Hulu and Netflix. AT&T is sourcing its DIRECTV platform to offer...

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