U-Verse, DirecTV, and DirecTV Now and Watch TV have a new rival to deal with. And the competition is coming from inside the building. That’s right. With half a dozen services that are in many ways indistinguishable from each other and subscriber numbers going in the wrong direction AT&T announced plans for a new streaming service called AT&T TV.
While it may seem odd for a company to put out a product that seems to target the same market it’s already involved with, it seems like what AT&T is really trying to do is move on from satellite based delivery options in favor of internet delivered options. You could think of DirecTV Now as kind of the first leg of this plan. It can’t be ignored that the other major streaming service that launched ahead of DTV Now was Sling TV, a streaming service owned by Dish another big satellite based delivery option. In an earnings call Randall Stephenson said “the traditional DirecTV product will still be around for a long time but the new ‘thin client’ streaming service will create new addressable markets while halving customer acquisition costs.”
This is really what AT&T is after. It is a giant company after the merger with Warner Time Warner, and it has
been working to cut costs through both consolidation and elimination of services it deemed not necessary. The company can reduce costs of setting up new customers by encouraging them to purchase Android TV powered devices that will likely be built around its own service much the same way that the new AirTV Mini is built around Sling TV.
While Stephenson said the current DirecTV product will last a long time it is obvious what AT&T is doing. It is
putting itself in a position to take advantage of the eventual national rollout of 5G networks. Once they are in place the ability to deliver content will jump substantially and the company will be ready to roll. And by using either its own boxes or even third-party options like Roku, Fire TV and Apple TV to distribute the service it will no longer be responsible for the upkeep and replacement of most of the equipment in the way it is with receivers, dishes and TV boxes. Want the service get a streaming box and sign up, no appointment, no visit to the office etc.
At some point seeing an actual DirecTV Dish on a house will be as rare as seeing the big kids pool sized dishes in a back yard. 5G will not be the last innovation in Internet delivery but it will most likely be the first of many innovation involving delivery of TV from Wireless Internet networks instead of fiber and other physical means that have to be built out and put in place. So what seems like a company in decline at the moment may well be the market leader in the future. The question is how many of the execs behind the plan will still be with the company in the end.
