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Add AT&T to the list of companies that want to sell you TV over the internet: AT&T CEO Randall Stephenson says his online-only DirecTV Now package will cost $35 a month and offer more than 100 channels when it launches next month.
DirecTV Now will join Dish’s Sling and Sony’s Vue, which have been on the market for a while and may have around 800,000 subscribers so far.
Next year, Hulu, the service owned by Disney, 21st Century Fox and Comcast, will launch its own live TV service. Google, among others, is working on one as well.
One selling point AT&T will have, for now, is that AT&T mobile subscribers who sign up for DirectTV Now will be able to watch on their devices without having the data usage count against their caps. The bulk of long-form video viewing happens on Wi-Fi networks, not mobile, but that’s still a differentiating feature.
The other big one appears to be price: AT&T looks like it’s coming in significantly below Sling and Vue — and, for that matter, DirecTV itself. The satellite service, which AT&T bought two years ago, is offering a basic starter pack for $50 a month, but that’s only a teaser rate that jumps up significantly after a year.
But there’s almost always a catch with this stuff.
The major one, for now, is that while AT&T has signed up many TV programmers, including Disney, Comcast/NBCU, Fox and Time Warner, it doesn’t yet have a deal with CBS.
Normally, this wouldn’t be that significant — these carriage negotiations often stretch on for a while, and then settle up just before a launch deadline.
But CBS’ absence to date is worth noting, since in the past CBS has been quite willing to sell its programming to online distributors, as long as they meet its price. And CBS has already signed on for Google/YouTube’s service ahead of everyone else.
It’s also worth noting that CBS is already selling its own programming directly to consumers for $6 a month, and has said it has a million subscribers for that service.
If you’re CBS boss Les Moonves, that track record may give you confidence to hold out for a substantial fee from Stephenson. Even if it means Stephenson has to raise his prices.
Both AT&T and CBS reps declined to comment.
Other notes:
- As we noted above, Stephenson’s online version of DirecTV is undercutting the pricing on traditional DirecTV. Traditionally you don’t do that with an asset you bought for $49 billion a couple years ago. But Stephenson knows that DirecTV is a declining asset, and he figures he would rather cannibalize — and keep — his own customers than let them leach away to competitors.
- AT&T’s plan to offer data-free usage to its own customers — so-called “zero rating” — is the kind of thing that drives net neutrality advocates bananas. Up until now, that hasn’t really mattered, since regulators have allowed it. But since AT&T wants regulators’ blessing to buy Time Warner, it sure seems like the kind of thing Washington might kibosh as a condition of the deal. AT&T can go ahead and market that feature for now, but if the deal gets done, it might disappear in a year or so.
- Note that AT&T has already signed up Time Warner for DirecTV Now. This makes sense, because Time Warner wants to make sure channels like CNN and TNT are included in the same bundles as its competitors. But it does give additional ammo to critics of the AT&T-Time Warner deal: If AT&T is already able to get Time Warner into digital video products, what additional benefit does it get when it buys the whole company?
This article originally appeared on Recode.net.
