The New York Times
November 28, 2016
AT&T unveiled a streaming television service on Monday aimed at the millions of Americans who have broadband internet but no bundled TV package, offering an extensive list of channels for less than most cable plans.
The service, DirecTV Now, includes many of the channels, including ESPN, TBS, AMC and the Disney Channel, that so-called cord-cutters frequently miss after they ditch cable. Live television can be streamed to mobile devices, tablets, computers and living-room televisions.
With the cheapest package offering 60 channels for $35 per month, the video service joins competitors like Sling TV and PlayStation Vue in drastically undercutting traditional cable and satellite packages, which often cost more than $100 per month.
John Stankey, the chief executive of the AT&T Entertainment Group, said it would appeal to people previously uninterested in or unable to get DirecTV satellite packages.
“It opens up a whole new segment of the market that we’ve typically been ineffective at addressing,” he said.
While the service will be available to all beginning on Wednesday, AT&T Wireless customers will have an extra advantage: Watching DirecTV Now on their mobile devices won’t count toward monthly data limits. Since streaming video rapidly eats through data, customers on carriers like Verizon and Sprint would be at a disadvantage.
“The last thing you want to do when you’re binging or enjoying entertainment is trying to calculate how many gigs I’m using or where I am in my data plan,” said Brad Bentley, the chief marketing officer at AT&T, referring to gigabytes of data.
That perk could stir complaints about competitiveness and the effect on consumers as media and telecommunications companies consolidate. Several politicians, including President-elect Donald J. Trump, expressed concern after AT&T agreed in October to buy Time Warner, which owns HBO and CNN, for about $85.4 billion.
Still, the service represents a potentially enticing offer to cord-cutters and so-called cord-nevers, those who have never had cable or satellite service. There is no annual contract, and users can cancel anytime. There are no hefty cable boxes to install, and home visits by technicians are not necessary. Signing up does not require a credit check.
Some analysts were optimistic about the company’s ability to attract customers without cannibalizing DirecTV’s satellite business. Macquarie Research said in a recent report that the service could sign up one million customers “in short order,” while analysts at Instinet called it “compelling and attractively priced,” predicting it would gain “considerably more traction than Sling TV or PlayStation Vue.”
But there are several drawbacks that could prevent widespread adoption.
The service does not include CBS, which has many of televisions’s top-rated programs, including “The Big Bang Theory” and “N.C.I.S.”
Sports fans might also have reservations. The more expensive channel packages include regional sports networks, but premium channels, like N.F.L. Sunday Ticket, are not included. The lack of CBS means customers would also miss out on N.F.L. games and the N.C.A.A. basketball tournament.
While using DirecTV Now, no more than two devices can stream at the same time, which could be a problem for families with multiple TVs and devices. Also, 4k resolution is not supported, and some markets will not have access to their local ABC, Fox and NBC affiliates.
Also, the service will not initially have DVR capabilities, including the ability to pause live TV. Mr. Stankey said the feature would be added in 2017.
Prices range from $35 for a package with 60 channels to $70 for a package with more than 120 channels, though an initial promotion will offer a 100-channel package for $35. HBO and Cinemax cost an additional $5 apiece.
Those prices are about in line with its closest competitors in the expanding market of streaming video, as more companies seek to pick off cable customers. Sling TV packages start at $20 for 31 channels, while PlayStation Vue starts at $30 for 48 channels.
With enough streaming services, cord-cutters could cobble together a suite of channels and on-demand video that would rival traditional cable bundles in both selection and price.
HBO Now is $14.99 per month. CBS has its own streaming service, commercial-free for $9.99 and with commercials for $5.99.
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