Research company MoffettNathanson's latest iteration of its quarterly "All Things Streaming" report is, as usual, full of interesting insights.
But something on page 18 really caught our attention: partnering with Harris X and using Nielsen data, MoffettNathanson found that DirecTV Stream had a 175% year-over-year increase in minutes streamed.
That was, by far, the biggest increase in all of U.S. streaming. The second closest app was Peacock, but that's entirely understandable when you consider that the paid and total active user bases for the NBCUniversal streaming service nearly doubled in 2022.
Similarly, Tubi and The Roku Channel, FASTs that also experienced rapid user and engagement expansion in 2022, also both increased their minutes viewed significantly last year.
DirecTV was spun off to private equity 18 months ago, and there's no longer quarterly insight into its subscriber growth. But Fitch Ratings recently estimated that the service, still rooted in satellite pay TV distribution, lost 500,000 customers in the third quarter alone.
So at a time of overall subscriber recession, how did the virtual MVPD side of DirecTV's business nearly triple its usage?
We asked DirecTV sources this question. We're still waiting to hear back, but we have a theory. As the DirecTV customer base churns inevitably smaller, down to just over 13 million users, the new customers -- and those looking to upgrade or change their service -- are being steered away from linear DirecTV satellite to Stream.
Updated: Several DirecTV users sent us messages corroborating this speculation. Reads one missive sent to Next TV Thursday: "I have had a DirecTV dish for 20 years. And in the past month, I have had messages pop up saying something along the line of, 'There is a problem receiving your dish signal. Would you like to switch to streaming?' My dish has a clear view of the sky and there has been no weather disturbances when I receive these messages."
Neither U.S. satellite TV company, Dish Network included, is building and/or launching any more satellites. And the pay TV component of DirecTV's services rollup, the legacy AT&T U-verse, stopped adding new customers several years ago.
On its landing page, DirecTV now merchandises Stream alongside satellite -- you can easily toggle between both promotional menus.
Notably, the satellite TV option is slightly cheaper for the first promotional year (by a factor of around $5 per tier vs. Stream). The satellite tiers also offer more channels, but satellite requires a two-year commitment, and the price of the second year of the satellite tiers is significantly higher than the comparable DirecTV Stream packages.
DirecTV Stream tiers rise from their promotional price starting in the second year of service, but -- and this is real important -- users only have to commit month to month and can pretty much easily cancel at any time.
Also, beyond not having to hang an ugly satellite dish on their rooftop preying to the southern sky, DirecTV Stream users also get three months free of HBO Max, Showtime, Starz, Cinemax and Epix.
Also notable: DirecTV Stream offers a proprietary set-top, but the service broke free from required CPE some time ago. And it recently expanded the support for its app to include the Google TV OS.
Like any good lazy trade publisher (oxy-what?), we often refer to DirecTV as a "satellite TV company." We might consider changing that descriptor.
Meanwhile, one other shiny trinket from the MoffettNathanson report caught our flighty eye -- the percentage of U.S. streaming homes without pay TV surpassed those with pay TV back in the third quarter. And now, sans pay TV homes are leaving the pay TV ones in the dust.
