The whole point of the USD 86 billion AT&T-Time Warner deal announced over the weekend is to plan for the future of television. Before that’s complete, AT&T’s DirecTV unit will launch a big new service: streaming over-the-top TV service.
At the WSJD Live conference on Tuesday, AT&T CEO Randall Stephenson announced that in November his company will launch “DirecTV Now,” a streaming TV offering with more than 100 channels at an attractive price point: USD 35 per month. The plan will include channels from Time Warner (like TNT, TBS) and NBC Universal, which Stephenson said were two of the first media companies on board, as well as Fox, which was one of the last holdouts.
“We’ve been trying to do this for three years,” Stephenson said, while on stage next to Time Warner CEO Jeff Bewkes.
Cheaper Internet-based TV subscriptions have the potential to further shake up the pay-TV market, which has long been dominated by cable and satellite providers. It could be attractive to the tens of millions of people who have declined to sign up for expensive cable TV bundles–or it could accelerate cord-cutting.
Other companies have tried to offer over-the-top services. Sony’s PlayStation Vue offers 100 channels for USD 55 a month. Dish Network’s Sling TV offers 40 channels for USD 25. Apple and others are rumored to be pursuing similar deals.
“How do you get to a USD 35 price point?” Stephenson said. “The way you get there is you don’t have a satellite dish on your roof, don’t have technicians coming to your house, don’t have an expensive set top box. Just go to the Internet.”
Presumably, the merger with Time Warner would allow AT&T not only to expand profit margins by offering its own content channels–but also gain more benefit from cross-selling customers into additional services like HBO Now. Stephenson noted that customers of DirecTV Now would not be charged for the data they use streaming the service over AT&T’s wireless network. – Business Insider