AT&T which became the world’s largest pay TV company by acquiring DirecTV last year has announced its plans to provide internet-based streaming TV services from the fourth quarter of 2016. With these new services, the company is joining the over-the-top or OTT video race. Although the company has not announced any pricing or disclosed information about the content, analysts feel that the new products are designed to target new customers who already stream their TV shows and movies from platforms like NetFlix and Hulu.
The three new internet TV services are DirecTV Now, DirecTV Mobile and DirecTV Preview. Most of the current content from today’s DirecTV will go into the Now package which will serve as the majority content provider among the three tiers. Customers will be able to access content using a wireless or wired internet connection. The Mobile service targets smartphone users who watch special made-for-digital content and videos directly on their mobile devices. This product range will be priced lower and will be provided to all users regardless of their carriers. Consumers who watch their content for free can opt for the third service, the Preview. This ad-supported option will have limited content featuring some programming available on DirecTV today including originals from the Audience network and video programming from the Otter Media.
AT&T will reveal the pricing only during the launch of these services. But by looking at what has been tabled so far, it is clear that these services will target customers who are price sensitive and those who don’t want the conventional pay TV services. The company has confirmed that the other similar services from its stable like the traditional satellite service from DirecTV and its own U-verse TV will not be affected and they would continue to offer their own programs. With this launch, AT&T believes that DirecTV will have a complete range of products including live programming and on-demand options from popular networks along with premium add-on options.
AT&T is hoping that these new subscription models with flexible content, transparent pricing and multiple viewing options will attract a new segment of customers who are completely new to the pay TV ecosystem or have left the system after using it for some time. It also trusts that when its own pay TV customers want to opt out, these new services can serve as alternatives, thus keeping them under the wider AT&T umbrella. The telco also depends heavily on the 130 million mobile subscribers it has, to boost the new Mobile service offerings.
AT&T’s offerings resemble Dish network’s Sling TV that provides streaming packages and content which does not require a satellite or a cable subscription. While the company has confirmed that it has finalized and secured initial content, it remains to be seen if it will be able to rope in all the four major networks and ESPN with HBO. If it succeeds in this, it will become the first OTT streaming media content provider to compete with the conventional cable providers. We have to wait for some more time to know whether this is just a packaging exercise from the telco or truly an extension of the pay TV segment.