AT&T to Take DirecTV Over-The-Top

Sets Q4 2016 Debut of Three Streaming Services
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RELATED:AT&T: OTT Video Plan Obviates Need for Set-Top Rules

Taking clearer aim at a small but growing group of cord-cutters and consumers who have never taken a traditional pay TV service, AT&T said it’s developing a set of DirecTV-branded streaming services that will be delivered over-the-top and launch in the fourth quarter of 2016.

UPDATE, July 21, 2016:AT&T: DirecTV Now Will Be a Game Changer

AT&T said those contract-free services, which will include two paid offerings and one ad-supported free OTT service, will be offered nationally using a bring-your-own-broadband model, meaning that customers will be able to get it from any wired or wireless broadband service provider.

Here are the services AT&T is teeing up for a Q4 debut:

--DirecTV Now

Will offer a “range of content packages, including much of what is available from DirecTV today -- on-demand and live programming from many networks, plus premium add-on options.” This service will be offered on wired or wireless connections and on a variety of Internet-connected devices.   

DirecTV has not announced a channel lineup for DirecTV now, but “[w]e expect to be able to offer local channel coverage in the future,” an AT&T official said.

--DirecTV Mobile

This “mobile-first” offering will feature premium video and “made-for-digital content” on smartphone, regardless of the wireless provider. Like DirecTV Now, DirecTV Mobile customers will be able to start watching following a “simple” process of signing in and downloading the app.

AT&T hasn’t unveiled a sponsored data product that could exempt some mobile traffic from data-consumption policies and caps, but top execs at the company have expressed interest in the idea. AT&T rival Verizon has introduced sponsored data service, called FreeBee Data, while T-Mobile has Binge On, a service that delivers video in 480p format and exempts some OTT services from its mobile data policies.

--DirecTV Preview

In a service that might remind some of Verizon’s go90 service, DirecTV will be a free, ad-supported offering delivered via wired or wireless connection, while also featuring “some of the quality programming available on DirecTV today.” The offering will also feature fare from AT&T’s AUDIENCE Network as well as Otter Media, the OTT-focused AT&T-The Chernin Group joint venture.

AT&T said it will announce pricing on DirecTV Mobile and DirecTV Now when those services are launched, but noted that it's setting up each service to support "simultaneous sessions." Notably, some of the programming offered by Dish Network's Sling TV is limited to a single stream per subscriber.  

AT&T, which closed its acquisition of DirecTV last July, said it will offer the new OTT services on a variety of devices, including smartphones, tablets, smart TVs, streaming players, and Web browsers. It has not announced which connected-TV platforms it will support out of the chute.

AT&T’s new DirecTV-branded OTT offerings will enter the mix amid growing competition from other streaming services, including Sling TV, Dish Network’s OTT-TV service for cord-cutters, and Sony’s PlayStation Vue. Comcast, meanwhile, is targeting cord-cutters with Stream TV, an in-home $15 per month skinny TV service for smartphones, tablets and Web browsers that is delivered on the MSO’s managed IP network, and not delivered over-the-top. Comcast has launched Stream in Chicago and the Greater Boston region.

For its part, AT&T said it plans to target its set of OTT services to about 20 million U.S. homes that aren’t served today by a traditional pay TV product.

AT&T is also expanding its OTT slate as its U-verse TV service struggled as the company emphasized satellite TV sales. In Q4 2015, AT&T added 214,000 U.S. satellite TV subscribers (via DirecTV), but shed 240,000 U-verse TV customers. 

AT&T ended 2015 with 137 million mobility subs, 45 million video subs, and an LTE network covering 355 million people and businesses. It estimates that 60% of its network traffic is comprised of video. AT&T currently offers more than 100 channels out of the home via its authenticated apps, and said it’s seen a 50% jump in unique streaming video users since buying DirecTV. 

“These new video subscription models reflect the flexible content choices, viewing options and simple, transparent pricing that consumers want,” John Stankey, CEO-AT&T Entertainment Group, said in a statement. “AT&T intends to be the first company to deliver that flexibility, along with an effortless customer experience. These offers will provide a broad range of customers with greater freedom and choice to watch, binge and even buy premium content, regardless of how and where they enjoy their entertainment.”

Stankey also hinted that the offerings will offer a “quality pay-TV experience, including top channels, sports and more, with increased value and flexibility of pure online streaming and no need for home installation.”

DirecTV, meanwhile, dabbled a bit with OTT before becoming part of AT&T. In 2014, it launched Yaveo, a Spanish-language service that cost $7.99 per month, but AT&T decided to shut it down in mid-December 2015.

AT&T posted this video of Stankey providing further comment on those new OTT offerings: