AT&T Inc. spent about fifty billion dollars to take over DirecTV in 2015, and they are now preparing to release an internet video service that could improve their TV business together with rest of the pay TV industry. The service is called DirecTV Now, expected to be launched by the end of the year, and it will offer streaming of numerous live channels to TV and mobile devices. DirecTV Now does not need a cable box, satellite dish, or any annual contracts. This OTT service from AT&T is intended to offer a full cable like lineup, unlike Hulu or Netflix.
Interestingly, AT&T executives are not concerned that an internet based video service, which is priced much lower than traditional TV options, could eat into their current TV business that has 25.3 million subscribers paying an average monthly bill of 117 dollars. “That means you have found something that the market really, really wants,” AT&T CEO, Randall Stephenson, said at an investor conference.
DirecTV Now service will be entering a promising, but much crowded market, with users paying as little as twenty dollars a month to stream about thirty channels from Sling TV service of Dish Network to about seventy five dollars per month for packages with more than hundred channels from PlayStation Vue service of Sony. However, reports say that AT&T is planning to go after the twenty million households in US that do not pay for home TV.
AT&T’s target includes cord cutters and youngsters, but it does not mean that they are planning to release a skinny bundle for DirecTV Now. Instead, the new streaming service boasts of over 100 channels that include Discovery Channel, Nickelodeon, and ESPN.
“We think skinny bundles have very small application in the market over time,” said John Stankey, head of AT&T’s entertainment business. “People in a household are going to want to watch different things. There’s a reason to look at a much broader offering of content.”
Randall Stephenson said that DirecTV Now will have a “very, very aggressive price,” but no details have yet been released about its pricing. Nevertheless, it is reported that the number of streams that a user can view simultaneously in DirecTV Now would be limited to two.