AT&T's DirecTV Slings Out Three Options For Cord Cutters

AT&T’s DirecTV announced plans to pursue untethered Millennials — and penny-pinching others — with three new options for streaming video content from any provider on any Internet-enabled device starting in the fourth quarter. But details on one key element — pricing — were not revealed other than to say it would be “competitive.”

It’s also not “clear what programming AT&T would be in position to offer,” report Thomas Gryta and Shalini Ramachandran for the Wall Street Journal. “The company is still in negotiations with some media companies,” they write, including Disney’s ESPN.

“We intend to offer customers a quality pay-TV experience, including top channels, sports and more, with increased value and flexibility of pure online streaming and no need for home installation,” John Stankey, CEO of AT&T Entertainment Group, says in the statement announcing the initiative.



At&T “has already acquired mobile streaming rights, by leveraging DirecTV's relationships and agreements with content providers, for various premium cable channels such as Showtime,” Reuters’ Malathi Nayak reports. “It will deploy 40 megahertz of contiguous airwaves to relay content over its network.”

The options, which will be available in the fourth quarter, are:

  • DirecTV Now will have much of what is available from DirecTV today, including on-demand and live programming from many networks, plus premium add-on options. Consumers sign-up for the service, download an app and begin watching.
  • DirecTV Mobile for watching premium video and made-for-digital content directly on a smartphone, regardless of the wireless provider. 
  • DirecTV Preview, a free, ad-supported service with content from AT&T’s Audience Network and other networks and content sources, as well as Millennial-focused video from Otter Media.

“The telecom and cable industries are rushing headlong to embrace Internet streaming as it's become clear simply providing Internet access (mobile or otherwise) isn't enough to sustain the business,” Brian Fung observes in the Washington Post. “That push has only accelerated as products like Dish Network's Sling TV — which also offers a mix of live TV and on-demand content — have shown surprisingly strong growth.”

“Pricing for Web video services tends to be lower than pricing for cable television and ranges from $14.99 a month for HBO Now to $11.99 for the priciest version of Netflix,” reports Roger Cheng for CNET. “Sling TV gives you a bundle of live channels, including TNT and AMC, for $20 a month. AT&T positions this as more of a full replacement for cable TV, and it could accordingly be priced higher.”

“Media executives have said AT&T is going through growing pains trying to absorb DirecTV, which it acquired last year,” the WSJ’s Gryta and Ramachandran write. “AT&T hasn’t been able to cleanly convert consumers from its U-verse TV service to the DirecTV satellite service, which it is increasingly emphasizing.”

The once highly heralded U-verse, which launched in 2005, has not caught on with consumers. 

“Unlike [Verizon’s] FiOS, which connected homes with super-fast fiber-optic lines, U-verse took a lower-cost approach by taking fiber cables to a neighborhood and then connecting them to existing copper lines that reach into homes,” Bloomberg News’s Scott Moritz reported in a story about its phase-out last month.

But “as the largest pay-TV group in the world, the move by AT&T has the potential to be one of the biggest attempts to take a traditional TV service ‘over the top’ — industry parlance for delivering content over the internet,” writes David Crow for Financial Times.

“It’s conceptually interesting, and if they do it properly, it would be a very big deal,” BTIG analyst Rich Greenfield tells Crow. “But it depends on whether they simply put the standard DirectTV online, which doesn’t interest me much, or whether they’re going to offer a cheaper, slimmed-down version alongside some Web content.”

“Like many pay-TV providers, DirecTV’s associated app already allows subscribers to watch a wide variety of channels on their phones, computers, and tablets. The main difference here is that customers won’t have to worry about getting a satellite slapped on their roof,” points out Chris Morran for Consumerist

“It also means no set-top box, the device that results in billions of dollars in revenue annually for the pay-TV industry.”

And, to many younger viewers, is as relevant as vintage rabbit ears

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