Technology

AT-T gave a first look into how the pay TV business is faring amid the coronavirus pandemic…and itnot great. The company reported today as a part of its Q1 2020 earnings that its traditional pay TV services, including DIRECTV and its newer streaming option AT-T TV, saw a combined net loss of 897,000 subscribers in the quarter. Meanwhile, its over-the-top streaming service, AT-T TV Now, also lost 138,000 subscribers, following a number of price hikes.

The companynewer pay TV service, AT-T TV, only just became available nationwide in March. But despite its &streaming& nature — it ships with an Android TV-powered box to deliver TV over the internet — consumers may have already caught on to the fact that itstill just the worst of pay TV wrapped up in a new delivery mechanism.

The streaming service is expensive compared with todayover-the-top and video-on-demand options. Italso laden with fees for things like activation, early termination and additional set-top boxes. And its bundle with AT-T Internet offers each service for $39.99/month for the first 12 months, but ties subscribers into two-year contracts where prices climb in the second year.

AT-TQ1 TV subscriber numbers indicate how quickly the pay TV market is imploding. And perhaps it will decline even more rapidly now that people no longer want to risk coronavirus exposure by having service techs install equipment in their homes. While AT-T TVDIY installation may help in that area, itunclear if the new service will ever broadly appeal to consumers in the streaming era.

AT-T ended the quarter with 18.6 million pay TV subscribers, down from 19.5 million in Q4 when it lost 945,000 subscribers.

This all puts much more pressure on WarnerMedia to deliver with its May 27th launch of HBO Max. The new direct-to-consumer streaming service promises all of HBO, plus original content, and a library of movies, classic TV and film, fan favorites and more. But at only $14.99 per month, it won&t be able to replace the lost revenue from high-priced pay TV subscriptions — only offset it.

AT-T also today admitted how the coronavirus outbreak has forced it to rethink its theatrical model.

Just yesterday, WarnerMedia announced the new kids movie &Scoob!& would skip theaters and head straight into homes, where it will be offered at either a $19.99 rental or $24.99 digital purchase. It will later have its &exclusive streaming premiere& on HBO Max.

&We&re rethinking our theatrical model and looking for ways to accelerate efforts that are consistent with the rapid changes in consumer behavior from the pandemic,& said WarnerMedia CEO and AT-T COO John Stankey, as reported by The Wrap.

&When theaters are closed, ithard to generate revenue,& he said.&And I don&t expect thatgoing to be a snapback. I think thatgoing to be something we&re going to have to watch the formation of consumer confidence, not just about going to movies, just in general about being back out in public and understanding whatoccurring there,& Stankey noted.

Overall, AT-T missed on both revenue and earnings in Q1, largely citing impacts from the coronavirus outbreak, which reduced earnings by 5 cents per share ($433 million). Total revenue in the quarter was $42.8 billion, short of Wall Street estimates of $44.2 billion. Adjusted EPS was 84 cents per share, versus an expected 85 cents.

A $600 million decline in revenue was attributed to lost ad sales, specifically those that were expected from now-postponed live sports events like March Madness, as well as lower wireless equipment sales.

AT-TWarnerMedia division — which includes HBO and Turner broadcast networks in addition to Warner Bros. theatrical releases — was heavily impacted by the pandemic, as well, reporting $7.4 billion in revenue, down from $8.4 billion a year earlier.

&The COVID pandemic had a 5 cents per share impact on our first quarter. Without it, the quarter was about what we expected — strong wireless numbers that covered the HBO Max investment, and produced stable EBITDA and EBITDA margins,& said Randall Stephenson, AT-T chairman and CEO, in a statement. &We have a strong cash position, a strong balance sheet, and our core businesses are solid and continue to generate good free cash flow — even in todayenvironment. In light of the pandemiceconomic impact, we&ve already adjusted our capital allocation plans and suspended all share retirements,& he added.

The company said it will continue investing in 5G and broadband, two of its only bright spots in the quarter, in addition to investments in HBO Max.

AT-T withdrew its financial guidance due to the &lack of visibility related to COVID-19 pandemic and recovery,& it said.

Columbia UniversityMailman School of Public Health has released updated projections of when we can expect U.S. case numbers of COVID-19 infections to peak and decline, based on different levels of social distancing measures. The updated projects, which take into account the most recent information, show that with around a 30% decrease in social contact we could be nearing a national peak of new cases for now by the end of April — but that if you decrease social contact by just 20%, the picture changes drastically, with a late peak that extends into mid-May and grows the number of new daily cases to as many as 30,000.

The Columbia projections are used to advise the White House Coronavirus Task Force, the Centers for Disease Control and Prevention (CDC), New York City and many other governments across the U.S. These updated projections also note that while we may hit a peak in the coming days, that also means that hospital and ICU capacity will be at their max in the same period. Again, Columbia researchers note, too, that this info doesn&t take into account local variances in when peaks arrive, and that some areas could have different peaks at different times even with a consistent 30% social contact reduction.

The model developed by the Columbia research team includes transmission and fatality numbers, movement by populations across city and state lines and information like the capacity of emergency field hospitals, all info that was not available when the original modeling was done. You can take a look at the interactive graphs and daily estimates resulting from the model, via Columbiawebsite.

This is one of a number of recent updated projections from public health experts, epidemiologists and medical researchers that predict the impact of a relaxation of social distancing measures now could have disastrous consequences in terms of prolonging and worsening the spread of COVID-19, and also on taxing healthcare resources (not to mention front-line workers).

MIT also projected a similar impact from the relaxation of measures currently in place, predicting an &exponential explosion& would result. Meanwhile, some states are already implementing such restriction relaxations, despite consensus from informed experts and researchers indicating ittoo early to begin such rollbacks.

The Los Angeles Cleantch Incubator is rebooting its incubator program and moving from rolling applications to a cohort model beginning with 16 new startups.

Los Angeles& not-for-profit incubator exchanges sweat equity in the form of services and office space, and the promise of $20,000 in funding for local pilot projects, for a 1.5% to 3% stake in a company.

&This is a renewed incubation program switching to the cohort model. The great part of a rolling program was that you could meet the startups where they were. The challenge with that was giving founders steady programming,& said chief executive Matt Peterson.

Nearly one-third of the founders involved in the incubatorlatest program are women, over half of the founders are people of color and more than 5% are veterans, making the new cohort the most diverse in the incubatorhistory.

Peterson is also flagging what he believes is a first for an incubator where startups can earn back their equity if they show hard numbers that indicate privileging diversity and access in hiring and in the availability of technologies and services to low-income communities.

Some of the companies in the incubatorcurrent cohort may also provide a small degree of support — and jobs — to Los Angeles residents hit hard by the social distancing measures the city and state have enacted to deal with the COVID-19 outbreak.

Companies like SparkCharge, ePave, and CERO Bikes are all companies that could employ local residents and launch shovel-ready projects with potential funding from local stimulus plans.

&As LAmost established incubator, we have a strong track record of empowering and supporting entrepreneurs truly representative of our energetic, diverse and innovative city,& says Matt Petersen, chief executive officer of the Los Angeles Cleantech Incubator. &It is critical to help startups deliver solutions for clean air and greenhouse gas mitigation. By continuing our investment in startup incubation, we will help stimulate the economy now, invest in industries that will bring future clean jobs to our communities and spur innovation to develop climate mitigation solutions.&

The new incubator program will last two years and is structured in a way that allows for startups to buy back equity from the incubator upon completion of certain milestones.

Companies in the new class include:

• Alumina Energyis a U.S.-based energy storage technology company designing and building energy storage systems for the utility, industrial and commercial scale power generation and process heat markets.

• CERO Bikes is a family-owned and operated business that designs and produces compact electric cargo bikes.

• ChargerHelp!is an on-demand charging station repair service.

• ePavehas developed a new composite material that can reduce the greenhouse gas effects of surfaces.

• InPipe Energy has developed a technology that generates low-cost electricity from the flow of water through gravity-fed water pipelines.

• Jump Watts sells fixed and mobile charging stations for all types of electric vehicles.

• Maxwell Vehicles offers power train conversions, maintenance and management for light industrial vehicles to make the switch to electric or hybrid electric vehicles.

• NeoCharge makes smart splitters that allow for faster home electric vehicle charging without the need for panel upgrades or other home modifications.

• Noria provides education and services for industrial companies to improve efficiency by enhancing their lubrication processes.

• Prime Lightworks makes electric propulsion systems for small satellites.

• SEEDsells a farm-in-a-box for folks who want to grow their own produce.

• SparkCharge is a manufacturer of modular electric vehicle charging units. The company partners with roadside assistance companies to service electric vehicle owners when they run out of range.

• Substance Power and Mobility is founded by a team of former aerospace and automotive entrepreneurs and executives and is working on developing energy storage hardware.

• Sustainable Building Council uses modified shipping containers with grid-independent water and power to make affordable housing.

• TBM Designsmakes self-shading window systems using thermo-bimetal to reduce energy costs by cutting the need for air conditioning.

• Xealhas an electric car charging system that makes chargers money-making assets for apartments and offices.

The tech industry (and the world at large) is not experiencing temporary anxiety — the uncertainty we&re all coping with is the new normal.

Sudden shifts in behavior have made some startups targeting slow-moving, old-school industries more relevant than they could have imagined, such as those in telehealth, distance learning and remote work. Most, however are seeing massive decreases in revenue, forcing them to cut costs and even lay off teams to slash burn rates. Other startups simply won&t be here in three to six months.

Cowboy Ventures founder and managing partner Aileen Lee, who coined the term &unicorn,& says tech companies going through scenario planning need to begin thinking long-term.

&We&ve spent the last month scenario planning with our portfolio companies, and in most cases, we&ll have conversations about what these scenarios can include,& said Lee. &And when we look at the planning around those scenarios, they often don&t feel conservative enough. Most entrepreneurs are optimists, and we are, too! But it seems safer to have more conservative plans [and start expecting] that this is going to impact us for longer and be worse than we expected.&

Lee and Cowboy Ventures partner Ted Wang joined TechCrunch on Tuesday for our first episode of Extra Crunch Live, a virtual speaker series for Extra Crunch members. In a live Q-A that included questions from myself and the Extra Crunch audience, Wang and Lee covered a wide range of topics, including PPP loans, advice for business leaders around layoffs, the right time to seek funding and the right firms from which to seek that funding, how to pitch during a downturn and which sectors in particular Cowboy is interested in financing right now.

You can check out the best insights from the call, or catch up on the full conversation via the YouTube embed below.

We have several outstanding guests, including Charles Hudson, Mitch and Freada Kapor, Mark Cuban, Roelof Botha, Hunter Walk and Kirsten Green, joining us on Extra Crunch Live over the next few weeks. Sign up for Extra Crunch to get access to all of them.

SpaceX CEO and founder Elon Musk said on Twitter on Wednesday that the cause of the failure of a single Merlin engine during the most recent Starlink launch (which didn&t prevent the launch from ultimately succeeding at its mission) was the result of an undetected, &small amount& of a cleaning fluid that ignited during the flight.

The SpaceX Falcon 9 vehicle uses nine Merlin engines on its first-stage, and can still operate successfully in case one stops working. One did stop working during the ascent phase of the Starlink mission that took place on March 18. The engine failure didn&t affect the subsequent deployment of 60 Starlink satellites, which went as planned, but it did prompt an investigation into the cause by SpaceX, which was joined by NASA ahead of the commercial crew flight that will carry NASA astronauts for the first time using a Falcon 9 on May 27.

Musk said the cause of the Merlin failure was a &[s]mall amount of isopropyl alcohol (cleaning fluid) [that] was trapped in a sensor dead leg - ignited in flight.& Isopropyl alcohol is a common cleaning and disinfectant agent used in sterile environments, and is also available over the counter as rubbing alcohol for consumer use. Based on Muskexplanation, it sounds like some was accidentally trapped in the sensor housing for a pressure valve in the Merlinfluid systems, and then it caught fire when the engine was ignited. That likely wasn&t enough to damage the engine, but told the sensor that heat levels were exceeding acceptable limits and caused a shutdown.

Based on the fact that NASA and SpaceX have since announced an official date for their Commercial Crew Demo-2 mission, it seems very likely that the agency was satisfied with this investigation and the cause that SpaceX identified. The issue seems relatively easy to mitigate in the future through post-cleaning checks, and even in the off-chance of a similar re-occurrence, the redundancy built into SpaceXFalcon 9 engine system seems very likely to be able to ensure continued successful operation of the spacecraft.