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26 August 2021

Please, God, let DirecTV Stream be AT&T’s last hoorah

In the latest – and hopefully last – development in one of the US media industry’s most tragic consumer marketing car crashes, AT&T TV has become DirecTV Stream. It is the first shake-up of DirecTV video services since starting a new chapter as a standalone company – but does DirecTV Stream have any hope of longevity?

If the new venture has any sense whatsoever, the DirecTV Stream branding should stick around for a very long time indeed, in a long-term strategic commitment that has come years too late. Traversing the cord cutting minefield is hard enough anyway for a company like DirecTV, with product teams working overtime to embrace IP video technologies across the board to guide DirecTV into a streaming era, only for executives further up the chain to repeatedly fumble the ball and confuse customers with bizarre branding decisions.

Faultline predicted in October 2020 that AT&T TV Now (formerly called DirecTV Now) would be extinct within a year, and such was the disaster of the seven-syllable service that it didn’t even last that long, as AT&T started sunsetting it in January 2021. We have essentially come full circle, from DirecTV Now, to AT&T TV Now, to AT&T TV, to DirecTV Stream.

The hope now (what’s left of it) is that a spin-off will clear the air, giving DirecTV a much-needed break from its pushy parent company AT&T, although the operator is retaining a 70% stake in the new business, with the remaining 30% held by private equity firm TPG Capital, injecting a fresh boost of capital.

Hoping to inflict minimal disruption on existing DirecTV subscribers, whether via satellite or streaming, the company says no action is required and that all customers will automatically keep their video service, as well as any bundled wireless, internet, or HBO Max services.

To ensure this smooth transition, nothing looks much different for DirecTV Stream other than the branding. Live sports remain a focal point, with DirecTV claiming to be the “undisputed leader in sports programming” with its NFL Sunday Ticket being the only place to watch every out of-market game live every Sunday afternoon anywhere in the US, also available in 4K HDR for satellite TV subscribers.

For DirecTV Stream, customers can either access content on their own streaming devices, including smartphones, Roku, Amazon Fire TV Stick, Apple TV and Chromecast, or purchase one of DirecTV’s own streaming set top devices (formerly called the AT&T TV device). This is an Android-based device with strong emphasis on Google Assistant voice integration and access to third-party video streaming services too.

However, AT&T TV was never perceived in the public sphere as a bargain option, and things look set to be the same in that regard under the new DirecTV Stream brand. Content packages start at $70 a month, going right up to $140 a month for the Premier package with sports, while premium channels like Cinemax and Showtime cost an extra $11 a month. You then have the option to pay an extra $10 a month for unlimited hours of cloud DVR usage, or stick with 20 hours of cloud TV included for no additional fee. That brings us to a monthly subscription in excess of $150 for TV alone if we’re going all-in, while throwing in the DirecTV Stream device sets you back $120 upfront, or $5 a month.

High-speed internet is recommended too, so that’s at least $45 a month. Not exactly the cut-price IP-based skinny bundle alternative to a cumbersome satellite TV subscription is it – but DirecTV knows its target market and keeping ARPU high is a priority.

However, the interesting thing about DirecTV Stream is how it encapsulates exactly what Dish Network should be doing, delivering full pay TV packages over the internet. This could be interesting if the seemingly inevitable merger between the two US satellite TV heavyweights plays out in the coming years.

DirecTV Stream is now the single brand for video streaming services previously launched by AT&T, with the exception of course of HBO Max, WarnerMedia’s golden child. We feel the move will initially provide the new standalone DirecTV business with some direction, although any performance analysis will depend on how much detail AT&T is willing to provide on the new venture in its future financial results.