Here’s Why AT&T’s DirecTV Now Service Isn’t as Good as It Could BeAs expected, AT&T launched its new streaming service, DirecTV Now, which offers a cable-style package of more than 100 channels for the low price of $35 a month. There are some significant weak spots in the new offering, and the reasons for those weaknesses are illuminating.As Fortune's Aaron Pressman has pointed out, users won't be able to stream NFL football on their smartphones or watch the football league's Sunday Ticket. The new service doesn't include CBS (cbs), and it doesn't offer a digital-recording function.In addition to all of those caveats, local affiliates of national networks in many cases won't be included, and users can only have two active streams going at one time.Not only that, but the price for those 100 channels isn't going to be $35 a month for very long either. That is an initial discount to the actual price, which will be $60 a month for 100 channels and $70 a month for 120 channels, with HBO (twx) costing extra.
At those prices, the new offering is very similar to the average cost of traditional cable for most users. According to the FCC, the average subscriber pays about $70 a month for their service.Get Data Sheet, Fortune's technology newsletter.So DirecTV Now isn't really going to be much competition for cable service price-wise, even if you include the fact that streaming it won't count against a user's bandwidth usage thanks to AT&T's "zero rating" policy, which is arguably a clear breach of net neutrality rules.In other words, DirecTV doesn't really look like much of a "cable killer" at all. And there's a good reason for that. Namely, that AT&T doesn't actually want to kill cable because it still makes a significant amount of money from its existing cable-style DirecTV service.What the company is trying to do is walk a tightrope between two equally unattractive options. It knows "cord cutting" is becoming a larger and larger phenomenon, especially for younger customers, so it needs to offer some kind of streaming cable-style service.
But if it makes that service too attractive, it risks cannibalizing its own business.In a research report on the new service, UBS analyst Doug Mitchelson said that DirecTV Now's various pricing levels "line up reasonably closely to DirectTV's traditional satellite packages... suggesting minimal disruption in terms of media company monetization."In the long run, of course, streaming services like DirecTV Now, Sling TV, and Hulu's forthcoming service are absolutely going to cannibalize existing cable and satellite services. What AT&T and other providers are trying to do is manage that process as efficiently as possible.Hulu and YouTube are tapping into cable. Watch: The biggest problem for carriers like AT&T (t) and Comcast (cmcsa) is that the TV universe has become so fragmented and disjointed that it's difficult to come up with a new "bundle" that can produce the same—or even similar—amounts of revenue to their traditional cable and satellite businesses.Everyone wants to have their own streaming service, so networks like CBS are rolling out products like CBS All Access.
Many of them want special treatment for their content, which is why negotiations with new services like the one Google (googl) plans to roll out soon have been so contentious, and could also explain why CBS isn't part of DirecTV Now.In broad terms, the challenge is not unlike the process that newspapers and the rest of the print media have been going through for some time now—trying to manage the decline of their existing business, which continues to generate significant amounts of revenue but is shrinking, while at the same time growing new businesses amid a host of new, more nimble competitors.Whether AT&T can generate enough new business with DirecTV Now to make the effort worthwhile financially, without cannibalizing its existing business too much, is the billion-dollar question.Posted in Reese Witherspoon Is Getting Her Own DirecTV Channel! Reese Witherspoon is headed to TV! The 40-year-old actress and designer shared the exciting news at AT&T's launch event for DirecTV Now on Monday (November…
Classic Big Screen Fairy Tales Classic Big Screen Fairy Tales Laugh Until You Scream: Horror ComediesAT&T launched its new streaming service DirecTV Now last month, but it appears to still be working out some of the kinks in the system. DirecTV Now subscribers have been complaining on social media in recent days about problems with the service using #QP1502, a nod to an error message some viewers have run into. #qp1502 filing a complaint with the federal gov't about this, other users should as well https://t.co/0ebeJHX6sw #directvnow — Dennis Hendrickson (@denhendrickson) December 19, 2016 @DIRECTVNowHelp get error #QP1502 every night using #AppleTV and no response from #customerservice — RJAnderson (@rjanderson123) December 10, 2016 We reached out to AT&T, and the company issued the following statement: “With any new technology there are going to be fixes that need to be made. While we understand we still have work to do, overall feedback on DirecTV Now has been very positive.
In this instance, only a limited amount of customers are affected and we are working quickly to address.” DirecTV Now has been responding to frustrated customers on social media, saying the company is aware of the issues and is working on it.This is a known issue that is being investigated further. We do appreciate your patience! — DIRECTV NOW Help (@DIRECTVNowHelp) December 12, 2016 DirecTV Now is aimed at cord cutters and people who either can’t afford cable television or don’t want to be locked into restrictive contracts. The service combines live television from networks like Fox, NBC, ESPN and many others, with a full complement of programs available on demand. DirecTV Now has several packages to choose from, starting with a $35 per month package that includes more than 60 channels. Users have three other packages to choose from, with the most robust offering coming in at $70 per month for more than 120 channels. Users have the option to add premium networks like HBO and Cinemax for $5 per month.
Convenience is at the forefront of the service, and the internal motto for DirecTV Now is “rules free TV.” DirecTV Now doesn’t require a cable box or satellite, and it works across a variety of devices. It is free of long-term contracts, and users can shuffle between various packages when they want. “Consumers want more TV freedom,” Brad Bentley, chief marketing officer for AT&T, said at the launch event. “They want all that great content and they want it everywhere, and they don’t want limitations around that content, and they want great value.” With DirecTV Now, AT&T is going after disillusioned cable customers — AT&T also has the most pay TV subscribers — while simultaneously staking its claim for dominance in the crowded streaming arena. AT&T appears ready to invest in original programming to compete with streaming heavyweights like Netflix and Amazon. At the launch event last month, AT&T announced a Taylor Swift documentary series as well as a partnership with actress Reese Witherspoon called Hello Sunshine that focuses on content created by women and for women.