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A day after DirecTV parent AT&T said it would lose subscribers because people are ditching their satellite and cable television services — a phenomenon known as cord-cutting — shares of companies heavily invested in the TV industry tumbled.
Shares of AT&T, the culprit in Thursday's sell-off, dropped 6 percent, dragging shares of its presumed merger partner, Time Warner, down 2 percent in the process.
AT&T said in a regulatory filing that in the recently ended quarter it would report gaining 300,000 subscribers to its over-the-top digital service while losing 390,000 traditional TV subscribers, for a net loss of 90,000 subs.
While it cited several causes — including hurricanes and changing its credit standards for new customers — it was this line in the filing that Wall Street keyed on: "The video net losses were driven by heightened competition in traditional pay TV markets and OTT services ..."
Bet somebody at AT&T got fired today...
(Score: 0) by Anonymous Coward on Saturday October 14 2017, @04:18PM (4 children)
those are business practices
(Score: 3, Insightful) by Nerdfest on Saturday October 14 2017, @04:47PM (3 children)
Doing it with no mind for the long term health or viability of the company is more like a modern MBA practice. It's not good business.
(Score: 0) by Anonymous Coward on Saturday October 14 2017, @06:54PM (2 children)
I have a degree in economics. It is more 2xx/3xx level classes. 101 is more along the lines of here is how you define a supply curve, here is how you define a demand curve. With a bit of 'what is maximal profit'.
(Score: 2) by RS3 on Saturday October 14 2017, @07:55PM (1 child)
Back in my day, Econ 101- microeconomics, covered all of supply / demand, including exactly what you mentioned (maximum profit point).
But that does NOT take into account what your market will do in response in the long term. It just looks at the instantaneous math; as if nothing else in the universe would change when you raise prices.
As "Nerdfest" and others have pointed out, the problem is with short-term profit grab. They _used_ to teach long-term planning and investment.
(Score: 0) by Anonymous Coward on Saturday October 14 2017, @07:58PM
They _used_ to teach long-term planning and investment
That is called finance and macroeconomics.