In a recent announcement, Tony Goncalves, AT&T Entertainment Group senior vice president for strategy and business development, revealed that the over-the-top service, DirecTV Now, would not be offering any skinny bundle packages to their subscribers at its launch. This announcement from AT&T came just a few weeks before the release of their latest online streaming service. However, reports from several sources confirm that other pay TV providers will continue to offer skinny bundle packages.
DirecTV Now streaming service is expected to offer more than a 100 popular channels of On Demand and live programming to their subscribers. Goncalves said that skinny bundles might not work for a large online streaming platform like DirecTV Now, even though they are working for small niche offerings.
“In a scaled business, addressing the economic requirement that reach the most customers would require the need to cast a rather wide net. You would need multiple skinny bundles to appeal to enough audience to get a scaled product,” Goncalves said in an interview. “Our opinion is much of what is called skinny bundles evolve into something bigger. I’m not sure OTT is the driver of that.”
He also responded to a few pay TV executives, who commented that AT&T does not believes that there is a business model for OTT, saying that each company has a different strategy, and they have their own plans for DirecTV Now. Goncalves said that AT&T is a “mobile plus video company,” and that video accounts for approximately 60% of mobile traffic.
He said, “Video is being consumed more and more over mobile, and if we’re going to provide that connectivity, we believe we need to participate in the content” going over through that network.
AT&T has already signed deals with several major networks including Disney and NBC Universal for their online streaming platform. Goncalves also hinted that the next agenda of AT&T would be to secure local TV programming for DirecTV Now.
“Consumers aren’t telling us they want less content, they want more flexibility and seamless way of engaging with that content,” Goncalves said. He further added that AT&T has a great working relationship with their programming partners. “I don’t believe there is another OTT approach that gives the programming community the opportunity we’re putting in front of them.”