AT&T to launch DirecTV Now streaming video service before 2017

The company will take on the likes of Sling TV, Hulu and HBO Now with "very, very aggressive price points."

Sara Tew/CNET
Mobile
AT&T CEO Randall Stephenson at Mobile World Congress 2013

AT&T CEO Randall Stephenson is teasing a new online video service.

Stephen Shankland/CNET

Not a fan of your cable provider? AT&T is prepping an alternative for you.

The Dallas-based telecommunications giant plans to launch an online streaming video service, DirecTV Now, in the fourth quarter, CEO Randall Stephenson said Wednesday at an investor conference. He teased that the service will include more than 100 premium channels and feature "very, very aggressive price points."

AT&T is just the latest company to offer a service targeted at cord cutters, or consumers who have shunned a traditional subscription TV service. AT&T joins the likes of Sling TV and Sony's PlayStation Vue. DirecTV Now will sit alongside AT&T's DirecTV, the satellite TV provider, and will let consumers access video through any internet-connected device, including phones, tablets and TV boxes like Roku.

Cord cutters have seen an explosion of options when it comes to streaming video, including Netflix, Hulu and HBO Go. But cobbling these services together to replace traditional TV altogether can be costly and complicated, which is why many consumers still stick with the easier package deal of a cable or satellite subscription.

AT&T believes it can offer something more attractive. The company plans to initially go after the 20 million households with no pay TV subscription, Stephenson said.

"In 2017, this will be a big driver of video for us," he said.

While Stephenson would not provide specific prices, he hinted that the company will be able to give consumers a break because of the low cost of delivering the service. AT&T won't have to send trucks to install cables or set-top boxes; customers just need to download an apps. All of the ordering, customer service and billing is done digitally, reducing the need for typical tech support.

DirecTV Now will provide one or two streams to a household, with Stephenson touting the ability to charge more to offer more simultaneous streams.

He also discussed the ability to bundle DirecTV Now with AT&T's broadband internet and mobile services. AT&T wireless customers who stream DirecTV Now won't take a hit on their data plan, providing extra incentive to bundle. He noted that 5 million AT&T wireless customers jumped on its new unlimited plan, which requires them to subscribe to DirecTV.

Pricing for Web video services tends to be lower than pricing for cable television and ranges from $14.99 a month for HBO Now to $11.99 for priciest version of Netflix. Sling TV gives you a bundle of live channels, including TNT and AMC, for $20 a month.

AT&T mentioned a potential streaming video service late last year and announced online video options in March. So what's taking so long? The company is still working on content deals, having already struck agreements with the likes of Disney and HBO. Stephenson said he is about 90 percent done with the work to complete deals, with just a few holdouts left.

When asked if DirecTV Now could threaten its DirecTV satellite business, Stephenson acknowledged some risk. But "that's a good sign," he said.

"If you don't see them threatening your legacy products, 99 percent of the time they don't go anywhere," he said. "It means you found something the market really wants."


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