AT&T acknowledged in April that its comparatively low-priced DirecTV Now streaming service had begun to cannibalize subscriptions to its full priced DirecTV satellite offering. But the company doesn’t appear too worried based on a new DirecTV Now deal it’s unveiling today.
The telco will give new streaming customers a Roku Premiere box — which retails for about $70 — when they prepay for two months of DirecTV Now. The cable-like live service, which offers budget-conscious viewers 60 channels for $35 a month, just became available to Roku users at the end of May.
The Roku Premiere box is 4K capable, a potential draw for those who want to stream sharp-imaged content to their the state-of-the-art sets. DirecTV Now doesn’t offer 4K yet, but it’s on the roadmap.
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Today’s announcement comes as AT&T gins up promotions for the streaming service. This month the telco began its first national ads for DirecTV Now, featuring actor Mark Wahlberg.
CFO John Stephens told analysts in April that the company had “deliberately pulled back on marketing to give the platform time to mature and improve” — and to “expect us to be more aggressive with DirecTV Now in the second half of the year, with additional features and content.”
AT&T is embracing DirecTV Now’s appeal to potential cord cutters, a shift from its view last year that the service was for young people and others who did not subscribe to a traditional cable or satellite video service.
People “looking to cut the cable cord may not always know the best place to start,” AT&T Entertainment Group Chief Marketing Officer Brad Bentley says about today’s Roku announcement. “We’re making it easy by eliminating up-front cost and providing a cost effective solution to stream the content they crave from their living room couches.”
The cord-cutting pitch is a little surprising: CEO Randall Stephenson acknowledged in April that in Q1 “churn was up significantly” for DirecTV — especially among those who don’t buy it as part of a bundle. That included “some cannibalization” from DirecTV Now.
He vowed to “make some adjustments” to DirecTV’s marketing.
Roku GM for Content and Services Steve Shannon calls the offering with DirecTV Now “an extremely compelling combination for customers.”
AT&T is awaiting antitrust approval for its $85 billion deal to buy Time Warner.
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