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AT&T faked the numbers for its DirecTV Now streaming service ahead of the company’s Time Warner merger, according to a lawsuit filed by investors, Bloomberg reported. The suit alleges the media giant pressured employees to boost DirecTV Now’s numbers by secretly adding the product to existing customers’ accounts. It also claims the company touted DirecTV Now’s user growth, when in reality, subscribers were leaving as their promotional periods ended and the service’s price hikes were limiting new sign-ups.
The suit says a variety of tactics were used to promote the idea that DirecTV Now was growing organically. For example, it claims that employees were taught how and encouraged to convert activation fees that customers typically had to pay to upgrade their phones into DirecTV Now subscriptions. This involved the customer being told the fee was being “waived,” when instead the customer was charged anyway and the payment was applied to up to 3 DirecTV Now accounts using fake emails.
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One former employee even said that around 40%-50% of customers he dealt with in early 2017 were complaining about being charged for DirecTV Now, which they had never signed up for. This was supported by other employees, the suit cites, and was a directive that came top from upper management to the sales channel.
In addition, the suit speaks to overly aggressive sales quotas, high churn from deeply discounted promotions, technical issues, and unsustainable pricing. It noted how AT&T finally disclosed that by the end of 2018, none of the 500,000 heavily discounted DirecTV Now subscribers remained on the service, and subscriptions had dropped by 267,000 as a result. In April 2019, it reported another 83,000 subscribers had left the service, and in July, 168,000 had abandoned it.
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But ahead of the Time Warner merger, AT&T touted the service’s success, the suit said. It didn’t...
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