The COVID-19 crisis is intensifying the divide in consumer demand between streaming platforms and traditional pay-TV operations as illustrated by recent diverging reports on the first half performances of over-the-top content provider Netflix, and the second quarter financial of pay-TV conglomerate AT&T.

This week, AT&T issued a Q2 financial update stating that COVID-19 had impacted all aspects of its business, in particular its pay-TV services DirecTV, U-verse, and AT&T Now, which continued to hemorrhage viewers in the period. At the same time, AT&T said its fiber-based IP broadband average revenue per unit (ARPU) and entertainment group businesses had better results.

Meanwhile, streaming giant Netflix recently reported that its subscription video-on-demand (SVOD) streaming service has watched its business surge as stay-at-home orders around he United States have accelerated the uptake of its on-demand content.

AT&T, which at the end of May launched an SVOD app service of its own in HBO Max, reported gains in IP broadband ARPU and solid performance in entertainment group business. For the three-month period ended June 30, 2020, the company said the global pandemic had contributed to $41 billion in consolidated revenues, down $4 billion from a year earlier. Among the businesses hardest hit was WarnerMedia, which saw operating revenue decline 22.9% to $6.8 billion from the same period in 2019. This was attributed in large part to declines in content and a advertising revenue resulting from the coronavirus fallout.

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Along with the impact of the pandemic, the company’s Entertainment Group results saw lower video, advertising and commercial revenues. AT&T registered a total of 17.7 million premium TV subscribers, but reported 886,000 net losses for the quarter for its DirecTV and U-verse operations, 91,000 attributed to Keep America Connected programs, and a 46% net loss (68,000) AT&T TV Now subscribers to a 720,000 total for the skinny bundle service at the end of June 2020.

AT&T has watched premium subscriber numbers drop 18% (3.9 million) in the last 12 months.

Highlights from the period included gains in premium live OTT service AT&T TV and “strong engagement” from the newly launched HBO Max SVOD service app. Going forward, AT&T said that among its top priorities for 2020 will be a focus on these software-based entertainment businesses.

Meanwhile, recent streaming media market data collected by Reelgood from more than 2 million active U.S. users, showed the five most popular SVOD platforms ranked by the most “initiated streams” between April 1 and June 1, 2020 were: Netflix with 31.5% of user-generated streams; Amazon Prime Video with 24.7%; Hulu with 18.6%; Disney+ with 6.1% and HBO Max with 5.2%.

To get an estimate of HBO Max, which only launched on May 28th, the research from said it combined its early share activity with that of the related HBO Now service. By itself, HBO Max accounted for 3.2%.

In ranking the SVOD platforms for streaming share, Reelgood said Netflix ranked No. 1 with 29.3%; Prime Video was second with 24.8%; Hulu was 17.4%; HBO Max was 17.9%; and Disney+ was 6%.

Reelgood said Neflix accounted for 11 of the top 20 most popularly streamed original programs in the period. Among them were, Rick and Morty with 9.7% of all streams, followed by Ozark (7.7%), Money Heist (Casa de Papel) (6.9%), and Dark (6.5%).

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By Greg Tarr

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