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02 Nov

CBS And FOX Channels Might Not Be Available On DirecTV Now

DirecTV Family Package

DirecTV Now

It is reported that AT&T will be launching their latest online streaming platform, DirecTV Now, without having prime channels from 21st Century Fox and CBS Corp. in their bundle. This streaming service will be available to the subscribers by the end of November and will offer more than a hundred channels at a comparatively lower price of $35 per month.

Analyst Craig Moffett says that AT&T has successfully signed agreements with major networks except CBS Corp. and reported that, “there is some contention over whether or not a Fox agreement has been reached – some reports citing AT&T suggest that it has; Fox itself said that it had not formally reached an agreement.”

It is evident that AT&T will have to launch DirecTV Now without two major broadband networks if they failed to reach an agreement with CBS Corp. soon. Earlier this week, a website named Satellite Guys claimed that they had intercepted an internal AT&T memo, which indicated that DirecTV Now would be launched on November 4. However, this report was denied by an AT&T representative later.

DirecTV Packages

CBS And FOX Channels

The AT&T representative said, “this what we’ve announced to date: Disney, HBO, Discovery Networks, NBCU, Turner, Scripps Networks, Starz, AMCN, AETN and Viacom will be among the more than 100 channels launching on DirecTV Now.”

Reports indicate that the agreements with the latter two content companies will certainly affect the margins AT&T receives on DirecTV Now. Moffett indicated that the wholesale price for AT&T’s DirecTV Now programming would be approximately $26 per subscriber. “Including CBS and Fox, which we believe will ultimately be included in the bundle once the deals are reached, programming costs will be near $34,” he said. However, the margin for DirecTV’s traditional satellite TV service will come around $60 a subscriber, when factors like leased HD DVRs are considered.

“AT&T’s aim is, of course, to minimize cannibalization of existing subscribers (and minimize piracy and password sharing), so the new service will be limited to a single stream, reducing its attractiveness as a substitute for linear packages that serve whole households,” Moffett added. “Still, there will inevitably be some cannibalization. Indeed, AT&T itself acknowledged that any truly disruptive video product will bring with it significant cannibalization risk. Obviously, the more aggressive the price, the higher the cannibalization.”

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