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DirecTV Now’s Cloud DVR is rolling out to everyone, but that’s bad news for some people

Earlier this year, AT&T’s streaming service DirecTV Now got all grown-up with the addition of a cloud DVR. Well, actually, it was more like hitting puberty than full adulthood — the Cloud DVR service DirecTV Now introduced in May was just a beta, not a fully-fledged feature.

But now, AT&T is ready to roll out Cloud DVR to all of its subscribers and formalize the feature. That’s good news for DirecTV Now’s nearly-2 million subscribers, but for everyone who was already using the Cloud DVR beta, it’s a sad day.

Starting August 29th, True Cloud DVR will be available to all customers on a DirecTV Now plan. The service comes with 20 hours of free recording (and seemingly a 30-day recording limit), which lets you access any recorded program from any device. It’s a big technological step forward from the days of scheduling recordings days in advance but only being able to stream them on one device.

For the customers who have been using the beta version of True Cloud DVR, however, this is a big step backwards. The beta version included 100 hours of free DVR recording, which took the feature from “oh yeah I’ll just record the evening news and a sports game” all the way up to a way to have an on-demand library of TV and movies.

Going forward, it seems like DirecTV Now will have a free 20 hours of cloud DVR available to customers, with expansion options like 50 or 120 hours of additional DVR storage available for an added cost, according to Multichannel.

DirecTV Now Ending Public Beta for True Cloud DVR, Will Launch Paid Higher Storage Tiers Soon

DirecTV is warning customers that its True Cloud DVR service will officially come out of beta next week, and any customers who were receiving 100 hours of recording space during the public beta will now be reset to the base 20 hours offered as a free a…

DirecTV Now Rolling Out Support for Many Local ABC, NBC, and CBS Stations Owned by Nexstar

Live TV streaming service DirecTV Now this week began expanding support for local stations on its platform, with numerous posts on r/DirecTVNow reporting that local network affiliates for ABC, NBC, and CBS have appeared in cities across the United Stat…

DirecTV Now is set to become the biggest live-streaming TV service this year

While cord-cutting is doing an admirable job of decimating the profits of the major pay TV operators, AT&T is having some quiet success with its plan to fight back. DirecTV Now, AT&T’s signature $40-a-month streaming service that has been around for nearly two years, is still adding subscribers like crazy. According to some estimates, DirecTV Now will overhaul Sling TV to be the country’s biggest streaming service by the end of 2018.

The rate at which AT&T is adding subscribers — 342,000 in the last quarter alone — has its total sitting at 1.8 million, compared to Dish’s 2.44 million. With AT&T adding more than three subscribers for every one subscriber that Dish adds, DirecTV Now is on track to overtake Dish by the end of 2018, Multichannel notes. 

On the surface, this is encouraging news for AT&T. At a time when the rest of the industry is hemorrhaging subscribers, any kind of net subscriber addition is something that investors like to see. But it’s worth bearing in mind that replacing satellite TV subscriptions with streaming subscriptions one-for-one is still terrible news. Despite ending Q2 2018 with slightly more subscribers than it had a year earlier, total operating revenue from the Entertainment Group was down by a little over a billion dollars, from $12.7 billion to $11.7 billion. Average revenue per video user was down by around six dollars, from $121.16 to $114.92.

Those numbers are the writing on the wall for traditional pay TV operators. Even though AT&T’s number of streaming subscribers is tiny compared to its total number of video subscribers (1.8 million compared to nearly 24 million), the very small switch away from satellite and cable towards streaming is already having an impact on AT&T’s finances. DirecTV Now costs just $40 per month, compared to the $100 or more that a satellite or U-verse package costs. AT&T’s margins are reportedly tiny (or nonexistent) on streaming customers; it can add as many DirecTV Now subscribers as it wants, but if it doesn’t make a profit on them, cord-cutting will still prove to be disastrous for AT&T’s finances.

What’s worse is that DirecTV Now’s rapid subscriber growth is driven at least in part by aggressive promotions that drive those poor revenue numbers. AT&T is still offering a $10-per-month promo for the first three months of DirecTV Now, which can inflate AT&T’s subscriber growth without adding anything to the bottom line.

AT&T is winning back cord-cutters with DirecTV Now, but that doesn’t mean cable is saved

As we’ve documented at great lengths in the past, the cord-cutting phenomenon is accelerating rapidly, and showing no sign of slowing down any time soon. Record numbers of subscribers are cutting the cord every year, which has the cable industry scrambling to find a solution.

AT&T, which owns satellite TV provider DirecTV as well as its own pay TV service U-verse, has been the keenest of the legacy pay TV companies to embrace streaming. After launching skinny streaming service DirecTV Now in late 2016, it’s managed to work up to 1.8 million subscribers, according to numbers AT&T released in its quarterly earnings report yesterday.

In the second quarter of 2018, DirecTV Now added 342,000 subscribers. In the same time period, AT&T lost 286,000 satellite TV customers, so once the company factors in its DirecTV Now ads, it saw a net gain in TV subscribers of 80,000.

On the surface, that’s an encouraging number for AT&T. At a time when the rest of the industry is hemorrhaging subscribers, any kind of net subscriber addition is something that investors like to see. But it’s worth bearing in mind that replacing satellite TV subscriptions with streaming subscriptions one-for-one is still terrible news. Despite ending Q2 2018 with slightly more subscribers than it had a year earlier, total operating revenue from the Entertainment Group was down by a little over a billion dollars, from $12.7 billion to $11.7 billion. Average revenue per video user was down by around six dollars, from $121.16 to $114.92.

Those numbers are the writing on the wall for traditional pay TV operators. Even though AT&T’s number of streaming subscribers is tiny compared to its total number of video subscribers (1.8 million compared to nearly 24 million), the very small switch away from satellite and cable towards streaming is already having an impact on AT&T’s finances. DirecTV Now costs just $40 per month, compared to the $100 or more that a satellite or U-verse package costs. AT&T’s margins are reportedly tiny (or nonexistent) on streaming customers; it can add as many DirecTV Now subscribers as it wants, but if it doesn’t make a profit on them, cord-cutting will still prove to be disastrous for AT&T’s finances.