Is AT&T TV replacing DirecTV?
Another offer that can be considered as a high-added-value TV product is AT&T Internet TV, which AT&T has been actively marketing for the past couple of years. Some have speculated that AT&T is planning to eventually phasing out DirecTV satellite TV and opting for AT&T TV instead.
It also of course purchased DirecTV for $67 billion back in 2015. At the time, such a decision appeared to be logical and reasonable. With the tendency of people to cut back on satellite TV because of online TV, this was because AT&T could package DirectTV with their wireless phone and Internet services which would help retain the subscribers.
However, since then, significant changes in the pay-TV industry have emerged, creating challenges, or threats, to traditional players such as DirecTV. The appreciation of on-demand platforms such as Netflix, Hulu, as well as Amazon has offered consumers more flexible options compared to the costly satellite and cable bundles.
And so in September 2019, AT&T introduced AT&T TV nationally as their latest television service. AT&T TV is very similar to cable TV but instead of equipment receiving signals from satellites, it transmits through the internet. However, to access it one has to subscribe to a contract plus install a set-top box provided by the company, which offers channel packages just like the traditional pay TV service.
Even though it is slightly pricier compared to other streaming alternatives, AT&T TV has more comprehensive channel packages and live sporting events. So, it occupies some space between regular paid television services, such as cable or satellite, and online streaming services.
For now, AT&T is advertising AT&T TV alongside DirecTV as a potential option for those who are seeking a less outdated variation on television service. So they do not seem quite willing to call it quits on their satellite TV service just as yet.
However, there are several reasons to believe that AT&T TV may eventually replace DirecTV down the road
1. The technological superiority of AT&T TV over satellite is also an important argument.
The internet-based nature of AT&T TV gives it some key benefits over satellite
- I am advised that no dish is necessary for installation but do I need to purchase it separately?
- Unlike satellites, not affected by unpredictable weather such as storms.
- Appropriate availability and use across home and other contexts using mobile technology.
- Streams content and P2P apps such as Netflix into the Digital Media Platform
2. This move can be attributed to AT&T’s efforts and initiatives to increase its market share of AT&T TV.
AT&T has been promoting AT&T TV very aggressively with special offers towards customers from competitor firms. These are people who visit the current platform and they are trying to persuade them to move to the new platform. This even applies to individuals who are already DirecTV users since they are the primary targets for AT&T TV promotions.
3. DirecTV subscriber losses mounting
Interestingly, after the acquisition of DirecTV, AT&T started steadily losing satellite TV subscribers every quarter amid cord-cutting. On the other hand, they remarked that they have been experiencing consistent growth in AT&T TV Now streaming service subscribers.
This does not augur well for the Satellite TV service in the future. With such a major market trend against it, subscriber loss for DirecTV continues to be an inevitability.
4. The key channel bundles that AT&T is to roll out to consumers include
AT&T has brought DirecTV’s channel packages and pricing structure to AT&T TV, including AT&T has brought DirecTV’s channel packages and pricing structure to AT&T TV, including:
- Choice package
- XTRA package
- Ultimate package
- Premier Package
This is how they provide carbon copies of DirecTV channel packages to AT&T TV, thereby positioning their internet TV service to seamlessly acquire and transition DirecTV customers.
The Verdict
Even though AT&T claims that DirecTV and AT&T TV will continue to exist side by side indefinitely, it will only be with AT&T TV as the primary TV offering in the future.
It is not rational for AT&T to keep on investing in an outdated satellite system that is outdated and technologically inferior to the internet streaming of TV.
However, some channels and packages are still with DirecTV while others have been transferred to AT&T TV suggesting that the satellite service may be in jeopardy. To avoid confusion, within the next 5 years, AT&T TV has to fully integrate and retire the DirecTV brand.
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