In addition to stating the case for AT&T’s proposed mega-merger with Time Warner, AT&T president and CEO Randall Stephenson also noted that DirecTV Now, the coming OTT-TV service, is on track to launch in Q4, with some room to spare.
“The more we iterate and work on DirectTV [Now] and launch it in November, the more excited we get about what we'll be putting in the marketplace,” he said. “There are a lot of things we really aspire to do with this platform as you think about incorporating social into the platform and as you begin to think about how you share content on this platform: clipping content that you're watching and sharing it with your friends via messaging or via social media.”
AT&T has yet to reveal pricing or a specific launch date for DirecTV Now, but Stephenson envisions it as a “mobile-centric” product, adding “there should be advantages of using DirecTV Now on AT&T's network; and there will be.”
That appears to be another clear indication that AT&T intends to zero-rate DirecTV Now traffic on the carrier’s mobile network, meaning that it won’t count against the user’s monthly mobile data plan.
However, time will tell if there will be any conditions put on the deal that might prevent any that. “As a practical matter, you can almost forget about all strategies that depend on differentiating distribution with preferential access to owned content,” MoffettNathanson analyst Craig Moffett said in a research note issued in the wake of the announced deal, noting that the FCC’s net neutrality rules ban preferential treatment of owned content. “With the inevitable consent decree conditions, you can also forge about zero-rating Time Warner (or DirecTV, and the planned DirecTV Now) content on AT&T’s wireless or wired network.”
When asked about that possibility, Stephenson said he “can’t prejudge any of this. I just really don’t know. We're just going to have to get into the process and put the data out for the regulators, and then begin that effort.”
Despite those lingering questions in the months ahead, AT&T appears to have salted away most of the digital distribution deals it needs for DirecTV Now.
“Those are largely done,” Stephenson said, noting that they required “a lot of heavy lifting” and that AT&T’s acquisition of DirecTV last year accelerated those discussions.
Stephenson also put a finer point on the audience that AT&T will be targeting with DirecTV Now.
“There is a huge customer base out there that we are convinced, while they don't subscribe to a bundle of premium content today, at the right price point [delivered] over-the-top, they will,” he said. “If you can bring a compelling price point and a compelling content package and some innovation with it, we are absolutely convinced that this is going to be very, very attractive for a large group of customers who really aren't even in the market today.”