Is it time to stop calling DirecTV a satellite service? AT&T, which bought it last year, can make that case today as it unveils three DirecTV-related streamed video services it plans to offer nationwide around October.
No details yet about programming or pricing. That makes it impossible to predict whether they’ll be compelling options for potential cable or satellite cord cutters, or millennials who don’t subscribe to traditional pay TV.
“We still have some work to do on programming, but we’re far enough along on the continuum with commitments that we are very comfortable that this will get done,” AT&T Entertainment Group CEO John Stankey tells me. “We’re not doing anything that content owners wouldn’t like.”
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But AT&T sees an opportunity to become a power in online video by offering options that cost less than the conventional DirecTV home service — and that would be especially appealing to the 20 million or so households that don’t subscribe to pay TV.
“Our goal here is to find the happy medium and middle of the road between that scaled premium experience that we already are successful with and what the industry talks about with the skinny bundle” similar to Dish Network’s $20 a month Sling TV, Stankey says.
The skinny bundle “doesn’t have a lot of traction,” he adds, because different people in a household like different channels.
AT&T plans to offer lots of channels “in a way that takes the friction out of the process and passes the savings along to the customer.” For example, users will be able to sign up online, and won’t need a set top box.
One option, DirecTV Now, will offer wired and wireless Internet users “a range of content packages, including much of what is available from DirecTV today,” AT&T says.
There will be opportunities to add channels to the basic offering. But Stankey says “we’re not doing Sling” which offers extra-cost add-ons for genres including sports, news, and family. “Much of that will be part of the base packages.”
DirecTV Mobile will serve all wireless customers — not just AT&T subscribers — who want to watch “premium video and made-for-digital content directly on a smartphone.” Stankey says that this offering “requires more surgery,” to secure rights for users to watch shows on demand.
And DirecTV Preview will be a free, ad-supported offering for wired and wireless devices with original and acquired programming on AT&T’s Audience Network as well as “many networks and other content sources, and millennial-focused video from Otter Media” — the company’s joint venture with Peter Chernin’s The Chernin Group.
Stankey says he’s not afraid that the online offerings will cannibalize DirecTV, or U-Verse. The full services mostly appeal to “homes with three and four TV sets hanging on the wall and four or five people running around. this product wouldn’t be well suited to that environment.”
One reason: There’ll be a limit on the number of devices that can simultaneously access the video streams, although this, too, is a detail that has yet to be worked out.
The AT&T exec also doesn’t worry that the new video offerings will make it easy for wireless subscribers to stick with competitors led by Verizon, T-Mobile, and Sprint.
“We’re not stupid people,” Stankey says. “There will be economic incentives” for those who bundle the programming with AT&T, “and there will be feature capabilities that make these products work better together.” For example, AT&T doesn’t want its mobile subscribers to “worry about what you’re doing with your data bucket. We want you to use it everywhere” with automatic authentication.
As for the Otter Media partnership with Chernin, it plans a beta offering of some content to AT&T subscribers in Q2. “We’re really excited about that product,” Stankey says. “It has great social characteristics and we’ll be helping them very aggressively distribute that product when it hits the market.”
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