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AT&T Says It Wants to Sell You Web TV, Too

Big if it happens. But no programming or pricing to announce.

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Peter Kafka covers media and technology, and their intersection, at Vox. Many of his stories can be found in his Kafka on Media newsletter, and he also hosts the Recode Media podcast.

We’ve been waiting for big, deep-pocketed players to join Dish’s Sling TV and sell pay TV over the Web. Now AT&T says that’s what it intends to do.

AT&T isn’t offering up much detail — just that it wants to put together a couple different Web TV offerings, which will be sold across the country, in the fall of 2016.

It won’t say which networks and programmers it is working with, or how much it wants to charge. The crucial thing it is saying is that, like Sling, the offering won’t be limited to people who already subscribe to AT&T’s broadband or mobile service, or AT&T’s DirecTV pay service: The company will sell the service over the Web, via an app, without an annual contract.

AT&T says it will have three different tiers of service. It is describing the most full-featured one, confusingly named “DirecTV Now,” as something that sounds similar to traditional TV, or the “skinny bundle” that Dish sells via its Sling TV. There’s also a mid-tier service that’s supposed to offer a “mobile-first user experience” — which seems to mean “not as much video as you would get with traditional pay TV” — and then a free version, with a grab-bag of video.

You can’t assess any of this stuff, though, until AT&T tells you what will be available and how much it will cost. And from what I can tell, AT&T doesn’t know, because AT&T is just starting negotiations with many big TV programmers. That means it’s in the same boat, more or less, as Apple, Google, Amazon and many other big companies that have investigated selling pay TV over the Web but don’t yet have a product.

Update: Tony Goncalves, AT&T’s SVP of strategy for its entertainment group, says the company does have deals with some programmers. “We do have some deals in place. We’re not being specific about which ones,” he told Re/code. “There’s no question we have work to do there.”

Here’s a comment from ESPN, whose top exec John Skipper has said the company was exploring programming deals with “other distributors” for products like Sling: “We are having productive conversations, but we have nothing to announce at this time.”

Another unknown is how AT&T intends to subsidize or otherwise defray the broadband costs of its customers who do use the would-be video services.

AT&T currently has an “Unlimited” plan that gives DirecTV and AT&T U-verse (its existing pay TV service) subscribers free data for all of their devices. It would be reasonable to assume it has similar plans for its new video services, and Goncalves said AT&T would want to “differentiate” its broadband service from competitors. “It would be safe to say that we’re going to look at every option, and sponsored data is one of those options,” he said.

AT&T rival Verizon is allowing those who use their Go90 mobile video service to do so without drawing on their wireless data buckets, but critics say such pricing violates net neutrality rules. The FCC has yet to weigh in on the matter.

T-Mobile, meanwhile, has decided not to offer its own video service. Instead, it is marketing a “Binge On” feature that lets customers watch video from Netflix, ESPN and others without hitting their data bucket. The catch is that those who use Binge On see all their video streaming in lower quality. Net neutrality critics have also cried foul over Binge On.

Goncalves declined to say whether AT&T has had conversations with regulators about its planned service.

The biggest question: Is it possible to create a Web TV service that’s cheap enough to attract people who don’t have pay TV — and which doesn’t cannibalize existing pay TV services — and make money? Dish and Sling think so, but so far they’re the only ones (last year Sony launched its half-hearted Vue service, but no one is taking it seriously, and industry executives think it has fewer subscribers than a decent-sized college).

“It’s not a — it’s, frankly, not a very complex technology challenge,” DirecTV CEO Michael White said in 2014. “I think the question will be, as the rights evolve, how big is the opportunity and how attractive is it?” White retired last year after AT&T acquired his company.

Here’s the AT&T release.


Bring Your Own Internet Connection,
Then Choose Where and How to Watch DIRECTV Video Service

DALLAS, March 1, 2016 – Later this year AT&T1 plans to launch the ability for you to access and stream DIRECTV video services over a wired or wireless Internet connection from any provider and from virtually any device – smartphone, tablet, Smart TV, streaming media hardware or PC.

Our 3 new affordable video offers will be designed for customers looking for premium content with choice and flexibility in what they want to watch and how they want to watch it. We plan for each service to come with a set number of simultaneous sessions. Also, these services will not require annual contracts, satellite dishes or set-top boxes.

Customers can expect to see these 3 new streaming options beginning in 4Q 2016:

The company plans to offer a range of content packages, including much of what is available from DIRECTV today — on-demand and live programming from many networks, plus premium add-on options. Customers will be able to access the service over a wired or wireless Internet connection and on Internet-enabled devices. Consumers can simply sign-up for the service, download the app and begin watching.

This affordable offer will deliver a mobile-first user experience for people wanting to watch premium video and made-for-digital content directly on a smartphone, regardless of the wireless provider. Consumers can start watching video immediately after the same simple sign-up and app-download process.


This free offer for anyone with a wired or wireless Internet connection will feature some of the quality programming available on DIRECTV today. The tailored ad-supported service will showcase content from AT&T’s AUDIENCE Network, many networks and other content sources, and millennial-focused video from Otter Media, a joint venture of AT&T and The Chernin Group.

“These new video subscription models reflect the flexible content choices, viewing options and simple, transparent pricing that consumers want. AT&T intends to be the first company to deliver that flexibility, along with an effortless customer experience,” said John Stankey, CEO – AT&T Entertainment Group. “These offers will provide a broad range of customers with greater freedom and choice to watch, binge and even buy premium content, regardless of how and where they enjoy their entertainment.

“We are looking at these offerings differently than others in the market. We often hear from customers who want more content from streaming services, or who can’t get or can’t afford a traditional pay-TV service,” Stankey said. “We intend to offer customers a quality pay-TV experience, including top channels, sports and more, with increased value and flexibility of pure online streaming and no need for home installation.”

AT&T is a leader in video streamed over the Internet. We serve more than 60 million streams and downloads to our TV customers each month. Today more than 60 percent of our network traffic is video.

AT&T will continue to provide DIRECTV’s premium satellite TV entertainment service, which includes its industry-leading lineup of live and on-demand programming choices and optional add-ons such as HBO, Showtime and its exclusive NFL Sunday Ticket Package. Customers will be able to access their programming on virtually all mobile devices, as they have been able to do for many years. AT&T also will continue to offer its U-verse TV and Internet service.

Additional reporting by Ina Fried.

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