Starting tomorrow, those who subscribe to AT&T’s Unlimited Plus wireless plan along with one of its video services — DirecTV, DirecTV Now, or U-verse — will receive HBO at no extra cost. That will last as long as they keep the service.
The new offering is part of a “roadmap we’ve been kicking around [with HBO] that predates any merger announcement,” AT&T Entertainment Group Chief Marketing Officer David Christopher says. In late August, ahead of AT&T’s $85 billion agreement in October to buy Time Warner, the companies signed a multi-year, strategic agreement to extend HBO content “across all AT&T products.”
The AT&T-Time Warner deal is being reviewed by Justice Department antitrust officials.
The premium network fits into AT&T’s plans because customers of the high end mobile services spend a majority of their time watching video, Christopher says. In addition, there’s “a churn benefit when customers have multiple services.”
The Unlimited Plus mobile service, introduced in February, costs $90 a month for a single line, $145 for two lines, and $20 for each additional line.
Unlimited Plus customers who don’t currently subscribe to HBO on DirecTV, DirecTV Now or U-verse will see it added to their line-ups. Current HBO customers who also sign up for the wireless plan will see the expense for the channel eliminated.
Those who don’t have one of AT&T’s video services will still be able to watch HBO for free by signing up for DirecTV Now and electing not to take any additional channels.
HBO viewing won’t count against the data cap. (Although Unlimited Plus subscribers don’t pay higher fees when they binge, AT&T says it “may slow data speeds” when users exceed 22GB a month.)
The FCC under President Obama thought that the strategy, known as zero-rating, might give video services aligned with carriers such as AT&T an unfair advantage over rivals. But the Trump administration has embraced it as pro-consumer.
Streamed video will be offered at 1.5Mbps, equal to standard definition TV, although users can proactively up that to high definition.
The no-charge plan covers three live channels on DirecTV Now (HBO, HBO East, and HBO Family), 10 live channels on DirecTV (east and west coast feeds of HBO, HBO 2, and HBO Family plus HBO Comedy, HBO Latino, HBO Signature, and HBO Zone, plus HBO On Demand and access to HBO GO), and 14 on U-verse (add different feeds of HBO Com and HBO Zone).
This is the third time AT&T has used HBO to sweeten its service offerings.
The telco turned heads when it launched DirecTV Now in November by also offering streaming customers HBO or Cinemax for $5 apiece per month. (AT&T also offers a Starz/Encore pack for $8 a month.)
Some analysts believe the price makes HBO a loss leader to attract customers. The $5 price is well below the typical fee that cable operators charge, and below the $15 a month that the company charges for its direct-to-consumer HBO Now streaming service.
Then, in March, AT&T said that people subscribing to DirecTV Now’s $60 a month “Go Big” or $70 “Gotta Have It” packages would receive HBO for free for a year.
AT&T previously announced that Unlimited Plus customers receive a $25 monthly credit they can use on any of its video outlets. For example, they can receive the DirecTV Select package for $25 a month, or DirecTV Now ‘s $35 “Live a Little” package for $10.
The Select package includes major news and entertainment channels but not sports services such as ESPN and FS1. The “Live a Little” line-up does include the leading basic sports channels.