AT&T bought DirecTV for $49 billion. It’s still paying a price for the deal

Image result for AT&T bought DirecTV‘When AT&T bought the direct broadcast service provider DirecTV four years ago , we can only guess they didn’t expect people were going to get rid of their cable and streaming would take off. Or maybe they knew, but thought the benefits of buying DirecTV outweighed the risks. AT&T bought DirecTV in 2015 for $49 billion + DirecTV’s. debt which came to a combined total of $67.1 billion. Since then, DirecTV has been on a downwards spiral, and its not exactly doing nearly as well as AT&T would like them to be doing.

AT&T originally acquired DirecTV because they wanted to expand their offerings and differentiate themselves in on the market and stand out more. However AT&T bought the company right around the time when the pay TV market began to change dramatically. Shareholders are revolting, with most feeling like AT&T’s acquisition of  DirecTV has had “damaging results” to the company. Amazon Prime, Netflix, Hulu, etc. have made cord-cutting (getting rid of cable and utilizing streaming services exclusively) a feasible option for many cable customers. People can easily access their favorite TV shows online, eliminating the need for live and appointment TV. On the other hand, streaming services such as Sling, YouTube TV, and Philo deliver live TV with tons of other features such as cloud DVR– all at a way lower price than cable providers such as DirecTV. The cable service also doesn’t provide internet like their competitors VerizonFios and Comcast Xfinity. These companies have retained customers in a way DirecTV can’t.

When AT&T bought DirecTV, they had approximately 20.3 million customers and AT&T’s own U-verse cable had about 5.7 million customers. As of the second quarter of this year they are down 17% in customers in the last 4 years. Experts believe that this number in customers will only continue to decrease.

Now it seems DirecTV is relying on Sunday Ticket, which lets subscribers watch out-of-market NFL games every Sunday. This has become the centerpiece of the satellite cable company.

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