Customers are fleeing in droves from AT&T's DirecTV Now streaming service

AT&T lost 267,000 DirecTV Now customers in its fourth quarter, the telecom giant announced Wednesday, a firm indication of the challenging economics of streaming that comes just a few months ahead of the company's planned launch of a new batch of branded streaming services later this year.

The company introduced DirecTV Now in November 2016 as a way to capture price-conscious cord-cutters and perhaps persuade them to trade up to its DirecTV satellite service. It hasn’t quite worked out that way. DirecTV has also been bleeding subscribers, losing 403,000 customers in the fourth quarter and 359,000 in the third.

Craig Moffett, a telecom analyst at independent consultancy MoffettNathanson, voiced surprise in an investor report on Wednesday, saying “AT&T had guided to subscriber losses in Q4. But nobody expected this.” Moffett noted that Wall Street consensus was for a loss of just 19,000 subscribers. DirecTV Now currently has 1.6 million subscribers, down from 1.86 million, the company said.

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