With its spinoff from AT&T officially completed, DirecTV said it is establishing DirecTV Stream as the single brand for multichannel video streaming services previously offered by AT&T.
AT&T agreed to spin off DirecTV in a deal valued at $15 billion. The deal includes AT&T’s DirecTV, AT&T TV and U-Verse TV video businesses (but not HBO Max).
AT&T paid $67 billion to buy DirecTV in 2014. AT&T is also in the process of spinning off WarnerMedia and selling it to Discovery. The two deals end AT&T’s costly and unsuccessful attempt to become a media company.
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With the satellite business in decline, AT&T tried to establish streaming services and transition consumers from the high-cost satellite delivered service to the less expensive and more flexible streaming technology. But AT&T had a number of brands including AT&T TV, that left consumers confused.
Brands AT&T has used before AT&T TV include AT&T TV Now and DirecTV Now.
AT&T lost 473,000 premium video customers in the second quarter, finishing with 15.4 million subscribers, down 13% from a year ago.
The newly independent DirecTV moved quickly to eliminate confusion.
“This is a watershed moment for DirecTV as we return to a singular focus on providing a stellar video experience,” said DirecTV CEO Bill Morrow. “Building on our recent momentum, we are well-positioned to bring unparalleled choice and value to all of our customers under one iconic brand whether they beam it or stream it.”
The company’s strategy is to provide viewers with the ability to choose the delivery mechanism that works for them, whether streaming or satellite, using one’s own device or one provided by DirecTV.
The new company assured consumers that satellite, streaming or IP video subscribers automatically keep their video service and any bundled wireless or interest services, including HBO Max.
But the company said that throughout the next several months, DirecTV will be rolling out its new brand and logo.
DirecTV Stream customers will continue to be able to watch TV with no contract or “hidden fees,” the company said. DirecTV Stream can be accessed by a variety of streaming devices, or by one available from DirecTV. That device is now known as the AT&T Device, but it will support the move to DirecTV Stream later this month.
“Those with our streaming device can build a complete, integrated and customized entertainment experience with the ability to watch and pause live TV on up to 20 devices in their home. It also allows consumers to get all their favorite entertainment in one place with easy access to apps like HBO Max, Netflix and Prime Video,” the company said.
DirecTV Stream will be competing in a tough market for virtual multichannel video programming distributors (vMVPDs), as increased costs lead to price hikes. DirecTV will be competing against the leaders, including Google’s YouTube TV, Disney’s Hulu Plus Live TV and Dish’s Sling TV.
In March, Kagan estimated that vMVPDs has about 12.5 million subscribers.
Parks Associates estimates that as people continue to cut the cord with traditional cable and satellite distributors, vMVPDs will grow, accounting for 23 million or the 53 million pay subscriptions that will still exist in 2024.
One competitor, Sling TV is raising its price to $35 a month from $30 a month this month for existing customers.
