AT&T Inc.'s online streaming TV service, DirecTV Now, will become the company's primary video platform in three to five years, according to people familiar with the plans.
Eric Ryan, an AT&T spokesman, declined to comment.
The largest U.S. pay-TV provider has been working for more than a year to build a video-delivery system that can carry multiple live feeds to broadband-connected homes, said the people. Such a platform would eliminate the need for a cable hookup or satellite dish in five years or less, the people said.
DirecTV Now, set to be introduced by the end of this year, will try to appeal to the 20 million households that have no cable or satellite service -- with 100-plus channels and a choice of streaming to one or two devices simultaneously.
"This is exclusively an over-the-top product," Chief Executive Officer Randall Stephenson said Wednesday at the Goldman Sachs Communacopia conference in New York. "This is no set-top box; this is no truck roll; this is a customer pulling down an app, getting a very robust platform."
AT&T has been looking for ways to respond to online-only TV competitors such as Netflix Inc. and Amazon.com Inc., which have been luring its customers away with lower-priced alternatives. AT&T acquired satellite-TV operator DirecTV for $48.5 billion last year, and so far in 2016 it's lost more than 100,000 TV customers.
Initially, DirecTV Now will be aimed at budget-minded consumers, and will stream free for AT&T wireless subscribers. The price of the service has yet to be finalized. If AT&T can get customers to sign up online on their own, it will reduce customer service costs and allow the company to offer the service at a price competitive with Sony Corp., said the people, who asked not to be identified discussing non-public information. Sony's PlayStation Vue starts at $39.99 for 60 channels and runs as high as $54.99 for more than 100 channels.
DirecTV Now will also compete directly with other web-streaming services such as Dish Network Corp.'s Sling TV, which starts at $20 for the 28-channel base price and runs as high as $40 for a 48-channel multiscreen package.
The company said earlier this week that it had reached programming agreements with 90 percent of its content partners. That process has included conventional TV and online-streaming rights deals like one reached Thursday with Scripps Networks Interactive, which includes the Travel Channel, Food Network and the Cooking Channel, according to a statement.
While DirecTV Now could siphon subscribers away from the satellite-TV service, the two-stream limit may not appeal to bigger-spending viewers with multiple TVs, tablets and phones. Depending on DirecTV Now's success, AT&T could expand the service to include as many as 10 streams offering the kind of full-package that could replace conventional pay-TV.
Business on 09/23/2016