Starting Wednesday, cord-nevers, cord shavers and cord cutters will have a relatively inexpensive, easy new option to access live TV.
AT&T finally unveiled pricing, channel lineups and more details about DirecTV Now, its over-the-top, streaming bundle service, which launches on Wednesday. The service, which doesn't require a set-top box, satellite dish, annual contract or credit checks, will debut with an introductory price of just $35 per month for more than 100 channels.
"This is the foundation of how we're going to do things in the future," John Stankey, CEO of AT&T Entertainment Group, told reporters who gathered at New York's Venue 57 for the product launch. He added, "For the first time in our history, we have control of the full stack," explaining that it will use data insights from subscribers to create more targeted advertising capabilities for brands, which will keep its pricing low.
With the launch, AT&T is targeting the 20 million-plus U.S. households that don't have cable or satellite service. "We get to address a new audience," said Stankey. "This opens up a whole new segment of the market." (Brad Bentley, evp and CMO at AT&T Entertainment Group, noted that market includes the "5-6 million people" who attempted to sign up for DirecTV but were unable to pass a credit check.)
And, the company hopes, it persuades even more subscribers to its "mobile-first" product to switch over to its wireless service. AT&T wireless subscribers will be able to use DirecTV Now without the streaming counting against their data plan.
While the service contains almost all of the country's biggest networks, there are a few major omissions. "The only thing missing is CBS and Showtime, which we are working on, actively," said Bentley. (The CW, which is also part of CBS Corp, is MIA as well.)
While "we're hopeful and optimistic" that AT&T and CBS will come to terms, Stankey noted, "the demographic may be a fit" for a CBS-less lineup—i.e., millennials don't watch CBS. However, they do watch The CW, which isn't available either.
And while subscribers in "owned and operated" markets like New York, Los Angeles and Philadelphia will be able to stream broadcast content live on NBC, ABC and Fox, those in smaller, affiliate markets will have to wait until the next day, when they can access network prime-time programming on demand. (The company said it is working with affiliates and hopes to expand its live offerings in the future.)
The service also doesn't include DirecTV's prized NFL Sunday Ticket package—Stankey said the company is in talks with the NFL—DVR capabilities (those are coming next year) or the ability to pause live TV. (However, many channels have "72 hour lookback" capabilities.)
While Stankey said that subscribers in owned and operated markets will be able to watch NFL games live on Fox and NBC, the feed will not be available to mobile subscribers in those markets, as Verizon retains exclusive NFL mobile streaming rights.
On Wednesday, DirecTV Now will be available via Amazon Fire (TV and TV stick) Android (mobile devices and tablets), iOS (iPhone, iPad, Apple TV), Chromecast (Android only; iOS will arrive in 2017) and Internet Explorer, Chrome and Safari web browsers. Next year, it will be available on Roku, Amazon Fire tablets and Samsung Smart TVs.
The company is offering four tiers of programming at launch: Live a Little (60-plus channels, for $35 per month), Just Right (80-plus channels for $50 per month), Go Big (100-plus channels for $60 per month) and Gotta Have It (120-plus channels for $70 per month).
As part of the launch, AT&T will sell its Go Big bundle with 100-plus channels for $35. When the price inevitably goes up, subscribers "will be grandfathered as long as they are a customer," said Brad Bentley, evp and CMO at AT&T Entertainment Group.
While DirecTV Now won't reveal the full channel lineups until Wednesday, it did share the following info: The Live a Little tier includes ABC, Fox, NBC, Fox News, ESPN, CNN, USA, AMC, FX, A&E, E!, Discovery, Disney Channel, TNT, TBS, Univision, and Comedy Central, among others.
Just Right adds Yes, Big Ten Network, ESPNU, OWN, Travel Channel and IFC. Go Big has SundanceTV, BBC World News and Oxygen, while Gotta Have It adds Chiller, Cloo and the Starz Encore channels. (More complete channel lineups appear below.)
Subscribers to one of the base packages can add HBO or Cinemax for $5 extra per month, which is significantly cheaper than HBO Now or most cable subscriptions. But DirecTV Now won't offer the full breadth of HBO and Cinemax channels available through cable TV.
The subscription allows up to two streams simultaneously, but there is no access to 4K video. For that, AT&T says, subscribers should consider its "premium" services like regular DirecTV or its U-verse TV and internet service.
The company stressed that the product will evolve and add other capabilities like more second-language networks in the coming months. "This is just the start," said Enrique Rodriguez, evp and CTO at AT&T Entertainment Group. "We're going to continue enhancing this product and this platform."
That's especially true when it comes to advertising. AT&T will be using its AT&T Ad Works division to build what it calls a next-generation advertising platform using all the data insights it will receive from its customers. "We have to find smarter and better ways to deliver advertising" that limits ad load and is better targeted, said Bentley. "This is how we're going to keep pricing down."
"Our ability to personalize and target the advertising to every device is significantly higher than it has been in the past," said Rodriguez.
In addition to the Go Big price cut, AT&T is giving customers several other incentives to try the new service. Customers who prepay three months of any DirecTV Now package can receive a free Apple TV. Those who prepay one month of any package can receive an Amazon Fire TV Stick with Alexa Voice Remote included. LeEco will offer between three and 12 months of DirecTV Now service with the purchase of select smartphones and TVs.
If the free gear isn't enough, AT&T is partnering with two big stars—Taylor Swift and Reese Witherspoon—for new channels, which will be available exclusively on DirecTV Now and AT&T's other platforms. Taylor Swift Now, featuring content that is curated by the singer, including concert and behind-the-scenes footage, will debut by year's end. And Witherspoon's production company, Hello Sunshine, will launch a VOD channel next year focusing on positive and inspiring content for women.
DirecTV Now's interface seems more like Netflix or Hulu than a traditional cable network's guide, allowing viewers to browse recently watched programs and curated offerings. "It doesn't take you into a linear guide. It takes you into the things that matter most," said Bentley. However, a guide is available for those who prefer one. The result is "a much more personalized television experience than what you get today in linear TV," according to Bentley.
While AT&T isn't saying publicly how many DirecTV Now subscribers it's targeting, Stankey said the company has three goals: customer growth, especially among what he called the "underpenetrated" segments; "happy customers;" and enticing subscribers to also sample AT&T broadband and wireless products. "We don't want them to have a product from AT&T, we want them to have two products from AT&T," he said.