AT&T is poised to launch an app called DirecTV Now before this year ends. It will provide stand-alone online streaming service to complement the company's DirecTV satellite service and U-verse cable TV offering.
The new app represents a strategy to attract subscribers who do not have or do not require the traditional cable TV contract. AT&T is expecting that it will not cannibalize its market even when the app does attract subscribers in the pay-TV ecosystem.
DirecTV Now will be competing head-on with the likes of Dish Network's Sling TV, Hulu and HBO Now. AT&T maintains that it will be leveraging its competitive advantage by very aggressive pricing packages. The service, according to Randall Stephenson, AT&T CEO, will reportedly include more than 100 premium channels.
DirecTV Now will also implement a so-called zero-rated data system wherein the video streaming content does not utilize its user's data allotment. It is similar to what consumers have seen in T-Mobile's Music Freedom and Binge On services. This, however, will only work on subscribers that use the AT&T's data services. It is not clear how this will be implemented for users who have different carriers.
Despite the features and attractions, there are those who doubt DirecTV Now's viability. The PlayStation Vue, for example, has not been very successful so far. It is Sony's take on similar streaming concept. This can be attributed to the manner by which the public interested in internet video streaming content are primarily lured by free-form services such as Netflix and Amazon's Prime Video.
There is no official word yet on pricing, but given the company's aggressive-price-point statement, it could potentially be lower than Sling TV's $20 to $25 monthly fee and the PlayStation Vue's $45 service. It is also important to note that conventional cable TV subscription hovers above $100.
The DirecTV Now service also has an alternative and cheaper package called DirecTV Mobile, which offers both premium video and exclusive digital contents. There is also a free service called DirecTV Preview, which includes videos that contain ads.
The introduction of the DirecTV app is widely seen as part of AT&T's drive to extract value from its DirecTV acquisition, which was completed last year. AT&T aims to tap subscribers who are expected to or have opted out of the pay-TV ecosystem. The company, for example, has identified 20 million households in this segment by 2017.
"This will be a big driver of video for us," Stephenson said.
