AT&T TV, the streaming version of the telecom’s premium full-bundled pay TV service and its long term replacement for DirecTV satellite TV, launched nationally on March 2.
AT&T TV is being positioned as the balm for the wireless giant’s recent pay TV subscriber struggles. AT&T lost another 1.2 million customers across its DirecTV, U-verse and AT&T Now platforms in the fourth quarter alone. It has lost round 5 million satellite and IPTV video customers since 2016.
“As we move through this year and we start shifting to AT&T TV, our gross add performance starts to get much stronger,” AT&T COO John Stankey told investment analysts during the company’s Q4 earnings call.
Also Read: AT&T TV Launches Nationwide, Telco Begins Phase-out of DirecTV Satellite
Cornerstone Broadband Product
AT&T is indeed bullish on the prospects for AT&T TV, which requires a proprietary Android TV-based set-top box and is delivered over the open internet, but is self-installed and requires no onsite technician support or pricey satellite launches.
AT&T sees AT&T TV as the cornerstone of its fiber-to-the-home broadband product, which now has 4 million customers. AT&T is hoping to have around 3 million more of them by 2022, and being able to bundle in a premium pay TV service is part of that business equation.
“Naturally, when you're able to put AT&T TV, a software-based product with fiber, it's a much more natural combination than a satellite dish and fiber. And so, as we start to roll out AT&T TV now in markets and we move in, we're going to see much stronger performance on the fiber side,” Stankey said.
Also Read: AT&T TV Will Make Cratering Pay TV Performance ‘Much Stronger,’ Operator Says
AT&T TV is currently being sold in a handful of markets. In November, AT&T TV was deployed in New York City, Seattle, Minneapolis and Miami. That added to a list of nine “pilot” markets that were initiated in August; Orange and Riverside, California; Topeka, Kan.; Wichita, Kan.; El Paso, Texas; Odessa, Texas; Corpus Christi, Texas; St. Louis; Springfield, Mo.; and West Palm Beach, Fla.
It’s widely assumed that AT&T TV will shove aside AT&T Now, the rebranded version of DirecTV Now virtual MVPD service that was launched with great fanfare in 2016 and grew quickly to nearly 2 million users—some of them paying money!—before AT&T pulled back its aggressive promotional fueling efforts for the service.
Pricing
AT&T TV is starting out with a one-year promotional price of $50 a month, delivering over 70 channels, including ESPN, as well as 500 hours of HD DVR service—an offering that totally undercuts AT&T Now. (AT&T TV’s price shoots up to a very pricey $93 a month after that first year.)
Also Read: AT&T TV to Roll Out in February, Drive Fiber Penetration, Telecom Says
AT&T TV has three very traditional looking tiers, stepping through and to $55- and $65-a-month price tiers (these are first-year prices). All of them allow Google Assistant voice control through an Android TV interface. The full flora and fauna of OTT apps, including Netflix of course, is available through Google Play. Each of the three AT&T TV tiers is offering three months free of HBO, Cinemax, Showtime, Starz and Epix at signup.
The mid-level “Premium” tier of AT&T TV—which bumps up to $110 month after the $55 first-year price—adds more than 20 additional channels, including Sundance, the Tennis Channel and MLB Network.
The top-end Xtra tier of AT&T TV, which tops out at $124 a month after a first-year price of $65, adds an additional 20-plus networks over the midlevel Premium tier, including the Golf Channel and National Geographic Wild.
Notably, in the fine print of the AT&T TV marketing page, a super top-end “Ultimate” tier is also described, priced at $80 for the first year and a whopping $135 a month subsequently.
Each of the three AT&T TV tiers requires the traditional 24-month contract, meaning users will have to pay handsomely to cancel service early. And not included in the AT&T TV price for the mid-level Choice tier and above is the $8.49-a-month “regional sports fee” subscribers will have to pay.
Also, the first AT&T TV set-top is free, but adding devices for other rooms is going to tack on a monthly fee.
Again, AT&T TV is packaged more as a traditional pay TV service, with all the requisite gouges, rather than a forward-looking OTT platform.
After paying nearly $50 billion five years ago to get into the satellite TV business, AT&T is looking to AT&T TV to usher it out of it. We’ll see how it goes.
“When I look at what's happening from an operational performance perspective and what the team is doing on gross add improvements, what we're seeing in churn improvements, the rollout of AT&T TV that really hits its stride in the second quarter in terms of its availability across the customer base,” Stankey added. "We’ll start to see those subscriber trends incrementally improve as those capabilities start to roll into the base. And we'll get to what I just indicated by the time we exit the year.”
