Cord Cutters, DirecTV Now is Coming For You

Ross Rubin

Nov 30, 2016

Signs of the launch of DirecTV Now appeared over a year ago when the satellite provider’s longtime rival Dish Network launched SlingTV, one of the first bundles of live broadband TV programming to compete with cable offerings. The other shoe dropped when AT&T purchased DirecTV, using it to vastly exchange the reach of its video services beyond the fiber-based U-Verse video offering.


While U-Verse is a regional offering, SlingTV has been outperforming it in downloads since the broadband service launched. Entering the market so late behind its rival, AT&T has sought to differentiate the service in several ways:

  • Rather than the so-called “skinny bundles” that have defined offerings such as SlingTV, DirecTV Now’s least expensive tier has 100 channels and scales all the way up to $70 per month. AT&T has said the problem with “skinny bundles” is that what a good skinny bundle is for one person is not good for another. This is kind of the point. Skinny bundles are really a poor proxy for the likely untenable dream of cable a la carte. One notable omission for both services is that they lack CBS offerings and Showtime, so cable systems (and even over-the-air antennas in the case of CBS) still retail a lineup advantage for now.

  • While the lowest tier has many popular pay TV channels, some (like MTV Classic) will require higher monthly fees. Nonetheless, this CNET article looks at how DirecTV Now stacks up against SlingTV and Sony’s PlayStation Vue shows that AT&T has used its time wisely negotiating a strong lineup in its lowest two tiers.
  • The company is offering a promotion of the second highest tier -- over 100 channels -- for $35 per month. The rate is indefinite although it’s subject to change via inevitable service price increases. It’s also offering an AppleTV to new customers who prepay for three months.
AT&T intends to keep some video programming available for free as a tease. This is a bit unusual compared to networks such as Hulu and Netflix, the latter of which doesn’t even allow perusal of its catalog via its website. Some of that content will likely come from mobile-native media company Fullscreen Media. DirecTV has struck a deal with Fullscreen Media, which includes many YouTube stars, to court its intended audience of cord-nevers. Indeed, given AT&T’s pursuit of TimeWarner, which owns CNN (and HBO where Neistat has also produced work), there could be multiple millennial media plays throughout DirecTV Now if regulators don’t intervene.

Having the U.S.’s larger satellite TV provider join the broadband TV app offerings will provide a more accurate lens through which to gauge consumer demand for a more robust app-based TV offering. Given the fullness of the offering, media companies will also find it instructional to see to what extent DirecTV grows the pay TV subscription market, cannibalizes its video base or steals customers from cable providers.