Q. I’ve had AT&T TV Now since when it was DIRECTV Now several years ago. Why is AT&T merging it with AT&T TV? Seems like it would make sense to keep them separate. — Johnny, East Lansing, Michigan.
Johnny, AT&T this morning revealed that AT&T TV Now (yes, once DIRECTV Now) would no longer be available to new customers, and would merge with AT&T TV, its sister streaming service. The company said service for current AT&T TV Now subscribers would continue, but it shouldn’t be long before subscribers to both will be offered AT&T TV’s packages rather than AT&T TV Now’s plans (AT&T also said today that it would no longer require new AT&T TV customers to sign a two-year contract.)
I see four reasons why AT&T has decided to take this step; a few reasons are relatively obvious, but a few others are hidden in the tea leaves.
1. Eliminate confusion.
AT&T late last year eliminated HBO Go and HBO Now after launching HBO Max because selling multiple streaming services with similar names was utterly confusing to consumers. Likewise, people couldn’t tell the difference between AT&T TV and AT&T TV Now; the merger of the two will enable AT&T to streamline its marketing effort.
2. AT&T TV Now was failing.
AT&T TV Now, which has lost roughly 1.2 million subscribers in two years, was the technological equivalent of dead man walking. Despite offering more regional sports channels than its rivals, cord-cutters were opting for less expensive alternatives such as Sling TV, Hulu Live and YouTube TV. (AT&T TV Now’s RSN-included plan was $80 a month while YTT and HL are $65 a month; Sling starts at $30 a month.) There was no indication that AT&T TV Now would turn around its decline.
3. AT&T TV includes a proprietary set-top.
You can watch AT&T TV’s lineup using an app from Roku or another streaming device. But the company has been aggressively pushing a company-supplied set-top to deliver the service’s channels over the Net. The more homes that get the set-top, the more data that AT&T gets on the people who live there. (You can’t underestimate AT&T’s thirst to collect sellable information on its customers.) Plus, when AT&T TV today removed its two-year contract requirement, it implemented a $5-a-month fee for the set-top; now it’s a revenue generator, too.
AT&T TV Now does not come with a set-top, which makes it less valuable to AT&T.
4. AT&T is close to selling DIRECTV and U-verse.
Buried in AT&T’s fine print at its web site today is a new line that says, “AT&T TV not available to DIRECTV and U-verse TV customers.”
That is quite a difference from AT&T’s earlier position which was to convert DIRECTV and U-verse subscribers to AT&T TV because it’s a cheaper platform to operate. The only reason to change that position, in my humble opinion, is that you no longer feel comfortable transferring subscribers from DIRECTV and U-verse to AT&T TV. And you would no longer feel comfortable doing that because the new owner (s?) of DIRECTV and U-verse want to keep their subscribers where they are.
Yes, AT&T is trying to sell the two TV services, according to multiple news reports. If a deal is done, or close, AT&T would have to start separating itself from the duo and focus on AT&T TV, which is unlikely to be part of the sale.
Johnny, hope that makes sense. Happy viewing, and stay safe!
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— Phillip Swann