AT&T will revise its four-tier DirecTV Now pricing and packaging strategy, repacking the virtual MVPD into just two options priced at $50 and $70 a month.
The “Plus” package will feature more than 40 channels, and HBO will come standard. The premium cable network, now also owned by AT&T, will also come standard with the 50-plus channel “Max” package.
The current DirecTV Now pricing configuration, established at launch back in November 2016, includes four tiers, bookended by the $40-a-month “Live a Little” package, which has more than 65 channels, and the $75-a-month “Gotta Have It” tier, which offers more than 125 networks.
Related: AT&T’s New DirecTV Now Plan: ‘Thin Out’ Bundle, Reset Price Point to ‘$50-$60’
DirecTV Now subscribers who want to keep those bundles can do so, but they’ll see a $10-a-month price increase.
In December, MCN was the first to report on comments made by AT&T CEO Randall Stephenson, who told investors the company needed to revise its go-to-market strategy in order to improve DirecTV Now’s flagging profit margins.
“We were asking this DirecTV Now product to do too much work,” Stephenson said. “So we’re thinning out the content and getting the price point right; getting it to where it’s profitable.”
Over the weekend, Cord Cutter News reported that AT&T is set to start informing customers of the strategy specifics this week, with the changes taking effect in April.
The news has since been widely confirmed.
With AT&T’s vMVPD now offering fewer channels for more money, the service will undoubtedly face further churn pressure, coming off a fourth quarter during which it lost 267,000 users.
That loss was widely attributed to AT&T suddenly removing steep promotional discounts, which resulted in around 500,000 customers paying $10 or less a month for the service at one point in 2018.
AT&T is readying the launch of 200-plus channel streaming offering that it’s billing as a true replacement to linear satellite television. Beyond skewing its mid-tier product, DirecTV Now, to a more profitable configuration, AT&T is also looking to better differentiate DirecTV Now from the new premium service.
