First, there was the DirecTV satellite TV service, then AT&T introduced its streaming-only DirecTV Now packages. Now, AT&T is looking to launch yet another version of DirecTV that will sit above its current streaming service and could eventually replace its satellite offering.
What’s interesting about this new service is that it will provide all of the channels and perks of the full-fledged DirecTV satellite service, but will be much more affordable for customers. “Rather than $110 to $200, it’s going to be in that $80 to $90 area because the cost structure comes way down,” said AT&T CEO Randall Stephenson at the J.P. Morgan Global Technology, Media and Communications Broker Conference.
Stephenson explains that AT&T can offer much lower pricing to customers due to cutting out higher costs associated with satellite service on its end. “Think about our traditional DirecTV product at a much lower cost point, meaning you don’t have satellites on roofs,” Stephenson added. “To provision this, the only truck roll required is going to be a UPS truck to deliver a very thin piece of hardware that you plug into your TV and your broadband outlet.”
According to Stephenson, subscriber acquisition costs will be one-fourth that of what it is witnessing right now with DirecTV satellite service.
In addition, it was also reiterated that the AT&T Watch streaming TV service will launch pending approval of the merger with Time Warner. This will be a low-cost service priced at around $15 per month (free for AT&T wireless subscribers). AT&T will be able to hit this price point because it is a “very skinny bundle” says Stephenson, and it won’t include sports programming or local channels.
If all goes according to plan, AT&T will have its bases covered with streaming packages, starting with the AT&T Watch at the low-end, DirecTV Now covering the $35 to $75 bracket, and the new DirecTV streaming service sitting above that.