DirecTV Lays Off Hundreds, Blaming Pay-TV's "Secular Decline"
DirecTV is laying off hundreds of managers as the cord-cutting trend continues hammering the firm with a rolling, mass exodus of customers. The cuts reportedly represent about 10% of management, which comprises about half of the company's staff.
Though DirecTV doesn't publicize its subscriber numbers, analysts estimate it has some 13 million -- and lost a whopping half-million of them in its most recent quarter alone.
The cord-cutting movement gained steam in the third quarter, according to boutique research firm MoffettNathanson. There's a powerful new accelerant driving the quickening decline of DirecTV's fortunes:
"Competition has ramped up in rural areas as broadband and fixed wireless companies build out networks in areas where satellite TV providers were once some of the only TV providers." --CNBC
As DirecTV's subscriber base erodes, the firm also faces a financial headwind in the form of rising fees to carry both cable and broadcast channels.
In a sign of the times, DirecTV, which launched the NFL's Sunday Ticket package in 1994, elected not to continue, following years of losses on the product. Meanwhile, YouTube TV -- a chief beneficiary of the cord-cutting trend -- will start carrying Sunday Ticket, paying $2 billion a year for the privilege.
Dawg it just hit me.— Drew Garrison (@DrewGarrison) January 12, 2023
The NFL regular season is over. DirecTV will no longer have Sunday Ticket.
I can call the worst company ever and cancel my service tomorrow and never have to deal with them ever again. pic.twitter.com/ygHOV31hC8
“The entire pay-TV industry is impacted by the secular decline and the increasing rates to secure and distribute programming,” said a DirecTV spokesperson in a statement quoted by CNBC. “We’re adjusting our operations costs to align with these changes and will continue to invest in new entertainment products and service enhancements.”
Dish Network chairman Charlie Ergen is urging federal regulators to green-light a merger of Dish and DirecTV. In an example of antitrust officials' cloudy foresight about shifting market forces, the Department of Justice sued to block such a deal in 2002.
Previously owned by AT&T, DirecTV was spun off in August 2021 and is privately held and controlled by AT&T and private equity firm TPG.