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AT&T's New $35 Streaming Service Likely to Come With Caveats

AT&T this week released a little more detail on the company's upcoming "DirecTV Now" streaming TV service. According to AT&T CEO Randall Stephenson, the service should launch next month with 100 channels for $35 per month, a surprising price point for a company not known for price competition. Already hard at work trying to sell the company's $85 billion Time Warner acquisition to the press, public, and regulators, AT&T has spent much of the week trying to suggest that only this merger makes this $35 service possible.

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AT&T CEO Randall Stephenson was quick to try and claim that critics of the merger were "uninformed."

"I'm not surprised [by the criticism]. They're uninformed comments," Stephenson said in a Q&A question this week at the WSJDLive Conference. "Anybody who characterizes this as a means to raise prices is ignoring the basic premise of what we're trying to do here, again a $35 product we bring into the market."

There's a few problems with AT&T's implication. One, AT&T announced its DirecTV Now service eight months ago, and the service will launch long before this deal gets regulatory approval (if it does). The fact that AT&T's able to launch the service at the $35 price point without owning Time Warner yet suggests the deal wasn't necessary to hit that price point.

There's also the fact that if you know AT&T at all (I've been writing about them now for sixteen years straight), you can be fairly certain that $35 price point comes with a few caveats, and likely won't be anywhere near $35 once you actually get your bill.

Pricing a nationwide streaming service at $35 would quickly drive tens of millions of AT&T U-Verse TV and DirecTV customers (who pay $100 or more every month) to the cheaper alternative, costing AT&T billions in lost revenue. AT&T simply isn't the kind of company to throw that amount of money in the toilet on an uncertain pivot attempt.

As such, you can be sure that DirecTV Now comes with the now-industry-standard bevy of hidden fees, used to covertly jack up the advertised price post sale. You can also be certain that to get that price point you'll need to sign up for AT&T wireless or other services. And there will likely be other caveats and restrictions included to ensure AT&T doesn't suddenly face a mass exodus of users fleeing its existing, quite lucrative legacy TV services.

What those caveats will be aren't yet revealed, but speaking at a conference back in May, AT&T executives made it abundantly clear the new streaming service would be designed in such a way as to "funnel" (read: upsell) customers to more expensive, traditional TV options.

Outside of using the $35 price point to try and sell the public on a hugely unpopular merger, AT&T isn't actually answering any questions about the company's new service this week. AT&T did launch a new website for the offering, which simply urges the Millennials AT&T is targeting to submit their e-mail address, promising the hip folks at AT&T will "hit you up later with the deets."

AT&T's new DirecTV Now service should launch in a matter of weeks, so it shouldn't take long to see if AT&T's promise of a straight $35 streaming TV option without annoying caveats is the real deal, or just more hot air from a cable TV industry historically allergic to truly competing on price.

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pawpaw
join:2004-05-05
Asheville, NC

1 edit

39 recommendations

pawpaw

Member

Confirmed

I can confirm from a reliable source that the $35 is correct.

(Plus $5 FCC surcharge, $7 cable maintenance fee, $3 support charge, $12 content provider motivation fee, $1 CEO jet fuel provision, $8 state taxes, $4 federal taxes, $9 decoder box rental, $15 decoder box remote rental, $20 decoder box remote battery rental, $11 PAC contribution)

Edit: I forgot - this service is zero-rated, all other data has a 1GB cap.